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Where ego dares #5: Intensity

Last time, I talked about bringing intensity to the thought process in order to amplify the mind power.  While this is simple to understand in theory, it is going to take a lot more to pull intensity out of thin air to power your thought process.  In my Grand Canyon trip, it was a matter of survival; therefore, my will to survive bring forth the intensity I needed to push myself onward.  Without the will, I would just lie down and give up.

As a trader, how do we bring forth our will to raise intensity to our thought process so we can follow through with the proper trading process to succeed in trading?

Before I go on, I like to remind everyone that intensity in thought process is a double-edge sword.  If the intensity lies on good intention with a positive thought process, you can create wonderful things; on the other hands, it can bring darkness to your life that are filled with sadness, sickness, and destruction (of self and other) if the intensity lies on bad intention with a negative outlook of life.

We already know how to bring forth intensity automatically by getting emotional about things or events.  If we are happy, our day lightens up more than normal; that is intensity.  If you encounter a bad news that affects you deeply, your day is filled with sorrow, sadness, and anger; that is intensity.

Ok I get it.  So how do we summon intensity to help our trading mind without getting emotional about things.  As you’ve already told us zillion of times, emotion is bad for trading!

Knowing that you can summon intensity with the emotion gives you clue that intensity is yours to take if only you know how to tap into it.

Ok, how?

By using the power of focus on your thought process.  You summon your will to “focus”.  When you get emotional about something, your thought process is being “focused” on one thing.  The only one thing that you are emotional about.  Because of the mind & body relationship, the intense focus of your thought process spills over to your body and cause you to have a body reaction such as butterflies in your stomach, an ecstatic episode, etc.

Your will is your 100% commitment to a single thought process that overrides other thought processes in your head.  Even your natural mind (aka ego) do not have enough power to overcome it.

In my Grand Canyon example, I was 100% committed to survival.  I wanted to survive so much that I found a solution to fight off the weakness of my starving body by focusing only on my foot and the one step movement.  There were no other thought than my foot and the one step.  I was free of my ego and I didn’t even know it.  By the time I was at the top, I didn’t care how I look or how I appeared to others (caring about what other people think is the ego domain). I grabbed anyone who walked by me, which was something I wouldn’t normally, and asked for information.

However, in our normal trading day, we are far from fighting for physical survival.  We are only fighting for a number that resides in our banking system- money.  Most of us aren’t foolish enough to put 100% of the money into the stock market.  Most will put aside money for general living expenses and invest some into the market.  While losing the money allocated to the stock market may put a dent to your life-style, it is not going to kill you or put you on the street.  Hence, most lack the will to draw on the intensity to the thought process to improve trading success.

“Oh well, I don’t need the money right away, I can wait out the drawdown for all the stocks in the portfolio,” was the usual thought process for a lot of people.  Basically, a lot of us don’t mind being a bagholder.

Of course I mind!

Ok, let me clarify.  A lot of us prefer to take the risk of being a bagholder than to take the effort to do the right thing by cutting losses quickly.

Hey you!  What about your $AMRN and $LRAD trades?  Ain’t you a bagholder on them as well?

Oop! You got me there!

But there is one difference between my being a bagholder on $AMRN and $LRAD and most bagholders in general.  I’ve “assigned” $AMRN and $LRAD as  position trades with the express purpose of waiting out their fundamental success from the very beginning.

Yes, my position trades on $AMRN and $LRAD are underwater from my re-entry point but I’ve done my research and am willing to allocate a percentage of my portfolio for “speculation” purpose.

Meanwhile, s lot of bagholders hold ALL their stocks in their portfolio and ride the whole portfolio down along with the general market correction.  In my humble opinion, this is poor portfolio management,

Do you see the difference?

Like I said, most people only have their investment portion of their money in their portfolio; therefore, while they don’t like the pain of the drawdown of all their stocks in the portfolio, the drawdown won’t kill them.

“I can wait it out.” is the usual response.

It is your money and it is your freedom to  manage it the way your ego wants it.

But do you catch my drift here?

There is absolutely no incentive for most people to summon their will to become a better trader/investor.  Nada!

Simply because the effort is very hard.

It is very hard to focus intensely on the proper trading thought to overcome the ego desires to be right.

It is very hard to maintain the focus on the proper trading thought to overcome the ego desires to be right.

It is very hard because it will require a lot of your energy and commitment to stay focus.  Most people will prefer to engage in other forms of entertainment than to waste it on trading discipline.

For all I know, you work very hard during your day and you just don’t have the energy and time to maintain the focus for the trading effort.

The point I’m making here is that to have a shot at becoming a successful trader/investor, you have to take the extra miles to get there.  And most successful people know that.  Those who make millions or billions in the business world know that; that is why they hire the best money manager they can find to manage their money.  They know they don’t have the time to become a successful trader on their own.

But if you want to manage your own money, you have to step up.  You have to summon the will to focus on the proper trading process and do the right thing.

The intensity is there for you to take it to your trading mind.  You just need to take the effort to focus on it.

At the end of the day, the question you have to ask yourself is, “do you want to take the effort to overcome the inertia and your natural mind to become a successful trader?”

It is all up to you.

You are what you think.

Your reality is a sum total of how you think.

You can enhance your reality by bringing positive intensity to your thought process or you can let your reality stay the same by remaining in the same thought process you have now.

But even then, spending the time and hard work can only increase your probability of success.  It doesn’t guarantee success.  Your ego is a very powerful entity.  You may think you have it under control using the intensity I’ve discussed. But your ego has patience.  It can wait for your moment of weakness.  Jesse Livermore, one of the past great trader in our financial world, succumbed to his ego at the end.

Let’s not get ahead of ourselves.  Keep it simple.  Just bring enough intensity/focus so you can bypass your natural mind to cut losses quickly.  Cutting losses quickly is by far the most important and yet a simple action to perform on your way to become a successful trader.  As we all know, simple is not the same as easy.

My 2 cents.

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Will this $AAPL cider turn into vinegar?

$AAPL down bar today reflects a confirmed correction to the downside simply because it has taken out the low of the bar from Tuesday, May 7th. The daily bars of Wednesday and Thursday failed to take out the Tuesday low; therefore, the trend was still up as far as I was concerned. However, today bar took out Tuesday low and price action was in the vicinity of the 89xma resistance line.

$AAPL price correction today could as well be a minor and healthy retracement. Nevertheless, I will watch for support on the 38.2% Fib retracement level at $434.75 which also happen to be near the support line from April 11th high.

Take a look at $AAPL daily chart below:

I bought June 7th 455 put option to short $AAPL. I’m betting that $AAPL correction will try to reach $435 support area before bouncing.

If there is going to be a mini-market correction, it may start next Monday and $AAPL will follow the market with it; otherwise, I will sell my put option pronto Monday morning to cut losses if the rally continues on.

My 2 cents.

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Cup and handle breakout for $SZYM

$SZYM reflects a beautiful cup and handle breakout pattern today with relative high volume.

Take a look at the daily chart.


It is important that price action stays above the $9.50 support line and not fall back underneath it going forward.  Giving the catalyst of increased capacity will be “on schedule” in the near future according the the earnings CC call, the possibility of price action heading higher is good.

I finally bought back some position this morning to take advantage of the early downdraft.  Although I’m not holding as much as I used to (I wish I did); but that is ok since I’ve to manage the risk I’m in on this one.  Risk management comes with the price of missing some money on the table IF price action reacts in your favor; on the other hands, reducing my position will also reduce the damage if price action reacts negatively.  So, I’ll have to look at $SZYM price action on a going forward basis.  In other words, I will add only if price action continue to go higher.  The number of shares I used to own is no longer relevant to my current risk profile and I will have to trade accordingly based on price action.

My 2 cents

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Coming back to the old guard

Remember $CTSH?

$CTSH had a monster run from a low $14 to $83 from late 2008 to early 2011 before it started having hiccup over the next two years.  I believe the current hiccup has come to a conclusion and price may just be heading back up soon.

Take a look at the weekly chart below:


Take a close look at the weekly chart again:


As you can see, this week may confirm the Bullish Harami weekly candlestick pattern for a bullish reversal.  Momentum indicators are also coming back up from the low point.

Take a look at the daily chart below:


Price took off after positive earnings report and the momentum may continue with the 5 ma line crossed over the 15 ma line today.

My 2 cents.

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Time to say hello to $BIDU

After waiting for quite a few songs, I think it is time to visit $BIDU.

Take a look at the monthly $BIDU chart below:


Price action has started to consolidate around the 50% retracement from the low $10 to the high of  $165.96.  This is a strong support in my book.

Take a look at the weekly chart below:


This week bar is a good solid green bar so far. 5 sma line is turning up along with the two momentum indicators.  Yes, the 5 ma hasn’t crossed the 15 ma line yet; therefore, I’m jumping the gun here.

Take a look at the daily chart below:


I like the “pop up” price action today.  Both momentum indicators are also turning up.  This sync with the weekly momentum indicators as well which are good signs.

My 2 cents.

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Piggy bank breakout

I’m more and more convinced that the recovery of our banking system is the reason why real estate is recovering, gold is no longer needed for “safety”, and the stock market is making new high through out 2013.

Having said that, I bought $BAC to celebrate the recovery.  I chose $BAC over $WFC simply because $BAC has more room for recovery while $WFC may be making new high soon.  Always love an underdog, $BAC it is.

Below is the daily chart for $BAC.


Notice that today it took out the high of 03/19/2013.  Volume for today is pretty decent compared to volume for the last two weeks not counting yesterday.

Look at the weekly chart of $BAC below.


Notice that price action has climbed over both 79sma and 89xma lines and is looking like it is rounding up to the upside.

My 2 cents.

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Blowing $DUST on my face

I’m going for the gold in $DUST for another try.  My first try was a winner due to a gap up on 4/15/2013 after I bought near the end of day on 4/12/2013.

Now, with a very decent volume so far that already exceeds the daily volume of the last few days, I believe $DUST may be gunning for the previous high of $119.63 again.  Take a look at the daily chart below.


Price action already took out the high of the last nine days. I’m betting that this breakout has leg.  Notice both the momentum indicators are now pointing up.

Needless to day, I bought a starter position at the low $96.xx area.

Due to the nature of $DUST being a 3x ETF, this is a high risk trade.

My 2 cents.

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Can $TINY stays tiny for long?

My money says that it will not stay tiny for long.

Take a look at the daily chart below:


Take a look at the weekly chart below:


Notice that momentum indicators are turning up. and the recent downtrend may be violated by end of this week.

See link here for fundamental reason why I believe $TINY won’t stay tiny for long.  Listen to the 5/2/2013 webcast for latest update.

My 2 cents.

Disclosure: $TINY is my 3rd largest position in my portfolio.

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Taking a stab at $NFLX

Perhaps it was the Google news- Google Stock Heats Up the Video Streaming Wars;

or perhaps it has to do with the $NFLX daily chart below:


Price action looks like it could not hang on to floating prices after the gapped up.  Today drop may be a prelude to further drop back to the $180 79sma support line.

Below is the  5 min $NFLX chart that gives me the comfort to buy $NFLX June 215 put option at current price point.


The retracement comes into resistance from both the 79sma and 89xma lines. I see small risk from here since I can’t see any new catalyst from Netflix that will propel the price to shoot much higher from this point.

My 2 cents.

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Are we due for a bullish May?

Take a look at the monthly $SPY chart below:


Did you see the three red May bars going back?  There was a green May bar four years ago. Are we due for a green May in 2013?

In the same token, after three red in a roll, what is the odd of black appearing in the next roulette spin?

Some say there is no statistical significance for the black to come out next since the roulette wheel doesn’t have memory.  How ’bout if I flip a coin with three heads in a roll? Will a tail comes out next?

Let’s try another example.  What if I rig the roulette wheel so that if I press a button, it tilts the wheel  to increase the odd of black appearing more frequently?  Isn’t that how the wild west riverboat gambling casino of the past cheated you out of your money?

How’ bout if I bend the coin in a way such that if I flip the coin certain way, it will most likely end up with head on the back of my hand?

Following the same analogy, I believe the market for 2013 is rigged to have a bullish May.

Don’t believe me?

Pay a little close attention to the past bullish May bars, did you see how each of those bullish May bar reflected a significant higher high from the previous April bar?  Now, take a look at the past three red bearish May bars (2010, 2011, and 2012), did you see that two of those red bars (2010 and 2012) had a lower high and a lower low?  The lower high is the key point here.  2011 was a mixed bar since it had an insignificant higher high but close lower than April to form a red bar.

Giving the logical patterns from the past bullish and bearish May bars, my conclusion is that the current May of 2013 has a high probability of being a bullish May bar simply because we have a higher high established today.

Take a look at the monthly $SPY chart below again.


Did you see that the current May bar is right above the highs of the past two bull trends?  May I remind you that that the current bull trend has a steeper angle than the other two uptrends?

What does it mean?

Like Mr. Partridge always say, “we are in a bull market…”; only this time, the bull market is on steroid.

My 2 cents.


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