The reason I share trading videos, longer form posts and charts

I wanted to take a moment to explain something about the videos I’ve begun to post, my long form posts and all the charts I’ve posted on this blog.

The objective is two-fold: This blog is a form of note-taking for me, based upon my observations and the systems I use, to develop trade ideas, entries, and risk management related estimated costs per idea. The second objective is to share ideas to provoke thought with anyone generous enough to spend their time reading my blog.

In the Lefevere book, Reminiscences of A Stock Operator, a/k/a the traders’ “bible” and investment classic, one notion that comes to mind is about how people love trading tips. People love ideas as if that is the entirety of the process of trading. In point of fact, ideas are just a beginning. The real work becomes finding out if a particular idea is suitable for an individual’s trading “style”, personality, bankroll and (both stated and unstated) objectives from trading.

Years ago, I began to adopt signal generating systems using rules evolved from the classic “turtletraders” rules which Michael Covel, noted commentator of the Richard Dennis trainees, shared, and which are still available online. But that was just a starting point, as I began to adapt the rules, based upon personal observations and many hours of spreadsheet tinkering. Later on, I studied the workings of William O’Neil proteges, adapting their studies of their trades to my evolving system. Lastly, I was very fortunate to become friends with a more experienced trader who in an act of generosity, took it upon himself to teach me a similar price-aware trading approach, which is a part of how I filter through the noise and find trading ideas but also helped me to refine my risk management rules even further. It’s all mostly automated, and the final component is my discretionary selection of what are risk-equalized ideas (in terms of the risk of loss per trade idea).

What I share on this blog represents a fraction of what my systems, rules and disposition deliver to my eyes. I wanted to find ideas which were familiar or accessible. At the same time I want to share a message that you can focus on price and develop rules to give each “idea” a potential cost of risk, with the goal that you can make more from the wins than from the losses. Yes, there will always be losses.

I believe that a trading idea can be presented quickly. The key number I begin to focus on after the “finding” of an idea is the cost of being wrong. For stock trading, the cost would be derived from the difference between the entry price and the stop loss exit in case a stock stops its up-trend or down-trend. While I do surrender to the temptation to ponder the potential return (potential profit as a multiple of the anticipated cost of a loss), that gets close to “top” and “bottom” calling and other bad habits belonging to the “prediction” variety. I try to avoid as best as I can the idea of cutting short a winning trade still in progress.

The time frames in my approach have been primarily weekly data. When I use daily data, my eye gravitates towards periods which might as well be weekly in nature. Other stats are all derived from price, with a nod towards volume. Chart patterns, beyond the cup and handle which I was exposed to via O’Neill and Investors Business Daily, are generally beyond me. I don’t trust my judgement when it comes to looking at patterns but I can rely upon price (and volume).

Finally, I admit that I still feel the allure of IBD/O’Neill-style earnings narratives and compelling macro-themes, based upon an earlier working life with some great professionals and from the inspiring narrative of some Market Wizard “gurus” but the “story” comes last. Without price, I can’t go ahead with a trade idea, beyond watching. As an outlet for the “macro” side of my mental makeup, I will write long form posts or “retweet” like a madman stuff that I find interesting and it doesn’t have to be actual trades, so much as ideas from social networks like twitter and/or tumblr. Nothing like a good “time suck” of the Interwebs to relieve me of the need to seek “meaning” in price movements. :)

There’s more to say, but this is a starting point for more. Thanks for reading.

“Dull” Dow stocks, $KO & $MSFT in 60 seconds

Coke and Microsoft have been kicking butt for those with a price-attentive approach. Not all the action has been in growth stocks. In fact, with a trading system based on a weekly price approach, you could have traded these lovely stocks for some time. Recent highs may give traders with a shorter time frame and an inclination to find “tops” & “bottoms” some temptation to trade against a broader up-trend.

trade ideas as of July 11, 2014: A mixed bag $EXK to $XL

EVERY week, I observe if there are trades of interest, from a price following point of view, via weekly charts.

My systems use different rules but they end up converging at the crossroads of price.

Below are this week’s “new” ideas (new to me) which popped up. I like to present simple weekly charts with a couple of averages and volume as my guide, just to keep the lists down to a manageable size or else the posts would be voluminous.

Some observations overall, this past week I noticed insurance related plays and see lots of highs with below recent average volumes. Part of it is summer, part of it is the “stock buyback” macro, the diversion of trading dollars to futures and options market mechanics reality but in the end I think it’s okay if we adhere to price AND risk management.

Inspired by other like minded traders I am considering how to shake up the format of this blog, which has essentially served as a trading notebook, which I’ve shared via tumblr, twitter and stocktwits. I will continue to do more writing, with a long format, on subjects of fascination. I’ve noticed I like to write about historical backdrops to ideas, and I hoe to continue that in conjunction with trading technique and actionable ideas. I will continue to post short form posts like this, where I let the charts do the talking. Lastly, I will explore a fun youtube based presentation of specific ideas with humor and brevity.

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Trade ideas as of July 3, 2014: $AKS to $XLB

The markets, as those with short attention spans remember them during “long ago” halcyon days of 2013, are back. The gates of ebullience have been blown open over this month. Short it at your risk. Swing traders may take a back seat to the price followers and top callers. It ends eventually (duh) but for now (as usual) trade PRICE.

I run weekly trading screens along with a boring mechanical 10 to 200 day moving average system, filtering for trading volumes and traded market value. These are the ones with a plenty of price and volume to commend them, but no guarantees (duh again), but certainly trading food for thought.

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Solarpunk was born (and went to sleep) in 19th C. France $SCTY $SPWR $SUNE $FSLR $CSIQ $TAN

Could a Solarpunk age have been born in 19th century France?

The world’s first photovoltaic cells were created by 19 year old Edmond Becquerel in 1839. Tinkering in his father’s lab, young Becquerel put silver chloride in an acidic solution, which was illuminated while connected to platinum electrodes, creating voltage and a current. The photovoltaic effect has also been known as the “Becquerel effect” courtesy of this jeune homme. (Footnote: Becquerel’s subsequent research on light would help to substantiate work by another 19th century pioneer in electromagnetism, Michael Faraday.)

About a generation after Becquerel’s discovery, Augustin Mouchot, a French math teacher, helped to create in the 1860s what may have been the first government funded solar power venture. Courtesy of funds from Napoleon III (who may have been worthier than any King Louis for the sobriquet of “Sun King”) Mouchot developed solar powered steam engines, leading to the world’s first solar power farm in what was French Algeria. Alas the prospects of the birth of a carbon free age were put on hold, courtesy of a French government report about recent efficiencies in coal mining and a free trade pact, the Cobden-Chevaliar treaty, with the United Kingdom.

Interrupted by macro-events, such as the Franco-Prussian war of 1870 and free trade with the UK, the first Solar Age was prematurely born and went into coma, slowly awakening upon an announcement by Bell Labs in 1954 that it had developed solar cells with 6% efficiency. The New York Times trumpeted the promise of the “limitless energy of the sun” but it was still early days.

Coal would be supplanted by petroleum, as solar bided its time, apparently relegated to the roofs of homebuilding mavericks, progressive communes, research labs and science fairs.

Here we are 150-plus years after Becquerel, and cutting edge solar cells are at about 45% efficiency and climbing, albeit within the coddled R&D environment or for high end deep pocket situations for NASA’s needs in outer space, but those Frenchmen may yet have the last laugh by the 200th anniversary of Becquerel’s discovery with a solar power renaissance.

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Alexandre Edmond Becquerel, inventor of the world’s first solar cell.

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Augustin Mouchot, math teacher and solar steam innovator, father of the world’s first solar power farm.

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But maybe the energy world’s frail step-sibling, may get to join the big kids’ table, pushing aside hydrocarbons.

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(NOTE: Sunpower holds as of this writing a commercial solar module record of 21.5% efficiency.)

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(NOTE: A now slightly outdated chart, 2010, from the U.S. Energy Dept.’s National Renewable Energy Laboratory)

http://en.wikipedia.org/wiki/Augustin_Mouchot

http://www.larousse.fr/encyclopedie/personnage/Mouchot/134226

http://en.wikipedia.org/wiki/Timeline_of_solar_cells

http://en.wikipedia.org/wiki/A._E._Becquerel

http://cleantechnica.com/2014/02/02/which-solar-panels-most-efficient/