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Monthly Archives: March 2013

Lessons from the past regarding Position Trade

Some of you may wonder why I’m so stubborn on my $AMRN trade and have chosen to sit through an ugly downtrend instead of abiding by my own discipline of cutting my loss and buying them back cheap.

Well, there is a reason why I call this a “position trade” from the get go.  Remember, I made that decision at the time I decided to load up (averaging up) when I was still in-the-money on the trade.

From the past, I had made similar calls to some of the stocks I believed to be “game-changer” or “visionary” but without the kind of conviction I’ve right now with $AMRN; thus, I loaded up BIG but sold too soon and missed the whole “game-changer” and “visionary” uptrend because I was either too busy or waiting for a retracement that I forgot to follow-through.  So, this time, I said to myself, “I’m not going to make the same mistake with $AMRN.”

Below were the trades I left quite some money on the table:

1) Loaded up on $SNFT (before they changed their name to $NUAN) because I believed their voice recognition software was a key component of technology trend at the time.  My average price was around $3.xx and price gyrating between $2.xx and $7.xx for a long long time and it began to wear me out.  Finally price went back up to high $7 and I threw in the towel by selling all my shares at mid-$7 because I didn’t want to go through the pain of watching it falling back below $7 which I had witnessed so many times.  Price then proceeded to head higher after I sold.  I was too “yellow belly” to buy back at $8 because I didn’t want to give back my gain after a long-period of frustration.  $NUAN is now trading at $20.00.

2) Loaded up on $LNG when it was trading at $3.xx.  At the time, I believed in this stock and its fundamental so much that I literally had a large stake on this one.  I had about 13% of my portfolio betting on this stock and I told myself I would hold this one long-term.  Price shot up to $6 and promptly fell back to $4.  The volatility was insane!  Instead of sticking to my conviction, I sold out when price went back to $5.00 for a decent profit.  While price continued to spike up and down in great speed either way, I lost my appetite after swing-trading $LNG for some quick profit here and there.   $LNG is now trading at $26.00.

3) Loaded up on $BIDU when it was trading at $110.00 before the split.  It was during one of those anti-BIDU sentiment and $BIDU dropped in price from high $300.00 to low $100.00.  Because my conviction wasn’t there, I sold at $130.00 and forgot about the stock.  $BIDU is now trading at $86.12 after split (pre-split would be $861.20).

4) Loaded up on $AMRN when it was trading at $3.xx.  After it went to $7.00, I got nervous and sold it for profit.  Since then, I began to swing trading it for profit.  Then one day, it so happened I did not have any position at the time, $AMRN gapped up to $16.xx and headed to $19.xx before heading back down.  I knew I would have sold it b/w $16.xx and $19.xx if I had held my full-size position.

Now, if I don’t learn from the lessons above, it will be all for naught.  So I told myself that, this time, I’m not going to let this volatility on $AMRN get the best of me.  Therefore, I’m holding this one through the end.  The one thing that allows me to hold this one through thick and thin is that I did not average down along the way.  I set my worst case loss scenario at my original investment (I doubt I will lose the whole thing since they do have a patent on pure EPA (icosapent ethyl); thus, I’m not faded by current $AMRN downdraft.

One more thing, because I made money back then with $AMRN when I loaded up with more shares than I’m holding now, this drawdown is simply my paper loss against my previous realized gain.  This fact does ease my mind in a way giving the current price of $AMRN is in a deep malaise.

Remember folk, this is strictly for position trade, I hold no such tolerance and conviction when it comes to my swing trades.  Swing trade is strictly for profit-taking when you see it.  Since the position size is much smaller, missing the runners here and there is part of the game.

My current position trades are: $LRAD, $AMRN, $SZYM, & $TINY and I intend to hold these as long as their technological fundamentals remain intact.

My 2 cents.

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Let’s face it, $FB may be seeing a bottom

Look at the daily $FB chart below.

Today is an up day after landing on the support zone.  When I see price action acting positive on a support zone after a downtrend, I consider it a low risk trade in trading a bottom.  I buy with a stop below the day low which often gives me a low risk trade.



Needless to day, I bought a starter position on $FB with a stop below intra-day low.

My 2 cents.

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Today Portfolio Adjustment (03-25-2013)

This morning the market had one of those day where it woke up with wood but was quickly dampened by noise of a crying baby next door owned by an European family.

“Waa! Waa! Waa! Give me my f***ing milk or I’ll cry till you…”

Anyway, $AAPL opened up and I added some more for the ride.  I wanted to get back on the uranium sector so I thought today would be the day.  I bought a starter position on $CCJ and $URA after seeing the charts were all pointing up like they were going to break out to the upside.

$BBRY gapped down and I did not have any regret for closing out my short position on Friday because $BBRY was known to bounce violently from time-to-time.  I was quite content with my profit from Friday so I didn’t see the need to gamble that win on an overnight roll-of-dice.  Seeing more than a point down at the open, I watched the chart to look for some stability and bought a starter position looking for a dead-cat bounce.  Using my trusty 15m, 3m, and 1m charts, I bought when these three charts aligned together to yell out “It’s a GO!  Buy now ZEN!”.   Hearing the signal, I bought and was fortunate to catch the dead-cat bounce.  I used a trailing stop to follow the price action and was later stopped out for profit.

$CGEN looked like it was bouncing and despite my better judgement, I bought a starter position thinking that it could run up fast on thin volume and I would be quick to dump it for a tidy profit.  However, after some times in the morning, I looked around and couldn’t find the patsy running up the price.  “Oh Sh*t!  I’m the patsy!”  Without thinking twice, I dumped my position for a small loss.  I deserved this loss for being such a smartass.

Then the market started to turn.  Before $SPY price action became a waterfall, $AAPL was struggling at the top so I decided to sell my lot to lock in profit before giving back the gain.   Then the next down bar happened on $SPY on a 3 min chart and I had this bad feeling that it might become a waterfall price action.

Not to deny my intuition (or feeling of impending waterfall scenario), I started to unload my swing trade positions.  I checked $CUR and it was not pretty so I dumped it to cut my loss.  $CDXS was showing the same unpleasant picture on the chart so I dumped it as well.  $DDD had been struggling since the open so I decided to sell it too to take the small loss before it became a big loss.

$PACB was hitting Friday low and I sold it too.  With the $SPY continuing its trek down, I was scanning my portfolio to see what other swing trade position I had.  I saw $GLOG and out it went.  Then I saw my newly minted $CCJ & $URA; nope, they had to go too.  I stopped at $DCTH and I still saw that massive bid sitting there at the low.  I was very tempted to hold but then I was in the “firing” mood; so I said, “You are fired too!”  Bang! Out it went.

By the time I had fired all my swing trade positions, I had 50% cash along with my core position trades- LRAD, AMRN, SZYM, & TINY.

I was feeling good to sit on the cash and  I went away from my desk for awhile.  When I came back I saw $DCTH was trekking higher.  “Darn! I knew it!  That large bid was there for a reason.”  Not to be denied a rally, I decided to buy back my $DCTH position.  Then I saw RC post in which he mentioned of holding $IMUC.  I checked the chart and it looked pretty good giving a down day today.  I had $IMUC before and I was actually thinking of buying it back when the chart looked better.  And there it was, a better looking chart when all others were taking a dump.  So I bought a starter position on $IMUC.

During the slow grinding state-of-being the rest of the day, I made one long $AAPL trade for a bounce but sold it for small profit when my 3m  & 1m charts started to act up.  From then on, I sat on my hand and stopped watching the market.

Overall, I had a good morning banking coin on $AAPL and $BBRY.  I also “fired” a lot of swing trade positions but was convinced to hire back $DCTH.  I’m giving $DCTH one more day (tomorrow) to prove itself.

AMRN continued to give me heat but LRAD was being a great pal by blowing ice cold air to balance out the portfolio.

Current holdings:

LRAD, AMRN, SZYM, TINY, DCTH, IMUC and 45% cash.

My 2 cents.

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This stubborn bear is beginning to annoy…

Take a look at the 15m $SPY chart below:


The market opened and rose up nicely and then had a waterfall price drop to show for the day.  If you are not annoyed then I take my hat off for you.  But my internal radar alerted me to move to cash; therefore, I spent all morning liquidating all my swing trades position and raised my cash to 50% as well.  (I said ‘as well’ because I just read The Fly posted that he was also at 50% cash.)  Thus, in a manner of speaking, I fired all my swing trade positions today.  However, due to an incessant pleading from $DCTH, I hired it back for a temporary basis to see if it can prove itself to make me some dough.

Take a look at the daily chart below, if the bear has its way, price action may just as well drop below the GW1 support.  Sometimes, it is better to be safe than sorry.


Be safe!

My 2 cents.


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Who’s the boss? You or your stock?

I’m sure most of you know what it is like to be a boss or an employee.

If you are not the boss, then all your effort goes to please  the boss.  And if you are the boss, all your effort goes to manage the employees.  And if you are the middle manager, then you have to please your high up and manage those below you.

Well, guess what, investing is pretty much about the same thing; but there is one big distinction.  It is YOUR money you are investing: therefore, YOU “should be” the BOSS.


I added the “should be” not for effect but to reflect how we let the employees (aka stocks) get away with not doing what they are hired to do- to make you money.

For those who are or were bosses, you know what I’m talking about.

On one extreme, if you are a tough boss, you pretty much have a strict guideline for the employees to follow.  And if your employees don’t follow those guideline, you write them up and inform them of their deviation from the guidelines.  And if they ignore your written warning, they are setting themselves up by providing you with reasonable ground for termination.  Simple at that.


On the other extreme, if you are an amiable boss who care more about the employees than your company’s mission, you may become too lenient to your employees who are not productive, not fit for the job, not being a team player, and worst of all, do not have integrity.  You become more susceptible to manipulation by the employees who are good at kissing your behind…

Before I go on, to be fair, there are excellent bosses out there who are both amiable and tough at the same time.  And these are the bosses all companies are lucky to have.

Well, I think you have a pretty good idea of where I’m going here.

It is interesting that while most of you are/were tough bosses in the business world, you become quite an amiable boss with your stocks.  Hmm…

Why do we, as an investors, tend to become the amiable boss who let our stocks get away with non-performance?  Why don’t we just fire the stocks the way Donald Trump does it in the video below?

Come on now, if your mission as a trader (aka your organization) is to make profit from swing trade/short-term trade, your job is to fire those stocks that don’t perform.  In other words, you need to be an extreme tough boss if you are a swing trader or short-term trader.  Otherwise, you are letting your employees (aka stocks) do what they please as your company’s expense (aka your portfolio’s expense).

Hence, firing nonperforming stocks = cutting losses.

Here are some thought that may help:

Scalper: stocks are like temp; if they don’t perform, replace them immediately.

Swing trader: stocks are like new employees on probation; if they don’t perform, let them go before the probation period expires.

Position trader: stocks are like project managers; if your have sufficient evidence that the project manager is not working out after a period of time, replace the project manager.

Whatever you do as a boss (investor/trader), do NOT become the boss as shown in the video below…

In other words, do not fall in love with your employees (aka stocks).

My 2 cents.

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Today Portfolio Adjustment (03-22-2013)

Today trading was quite thrilling in a manner of speaking.

Let’s started with the market open.  Market opened higher and I was tickled to see my prediction came truth because I told myself that SP500 would open higher when it was printing a negative 2.50 last night.

Immediately I checked $DDD to see where it was.  It gapped higher and I placed an order to add more and got filled at $31.7x.  Then I checked $BBRY and saw the it was printing strong.  I added a bit more and got filled @ $16.5x.

Lo and behold, right after I bought $DDD, price began to fall off and I was going, “You’ve got to be kidding me!”.

Without thinking, I sold 40% of my $DDD holding to lock in profit just in case the downdraft became a waterfall price drop.  Remember, I came in the morning with profit from yesterday run-up.

I checked $DCTH and saw it was not acting well, so I sold half of my position to lock in some profit and minimize my exposure.  Since my position size was no longer large enough to threaten me when price was gyrating around in the negative territory, I left it alone.  I was also comforted by the fact that there was a large bids sitting at the support price level.  This told me that a big whale is trying to accumulate for the next leg run-up.

$PACB was trading the same way $DCTH was and since my position was not large, I left it alone as well.

Price began to bounce up again on $DDD so I bought back half of what I sold earlier.  At the same time, $XONE was also acting well so I added to my position.

Then $BBRY began to hesitate on its price movement, I sold immediately to capture the small gain.  After I sold, $BBRY began its trek up.  Not to miss the rally, I went back in with a tight stop but it was for naught since I was stopped out not long after I got in.

$DDD continued to head higher and took out the intra-day high in the process; so I added some more.  But then, by mid-day, $DDD broke thru the 3-min uptrend line with a sudden drop in price.  I immediately sold my whole lot of $DDD to lock in profit.  I sold $XONE also to lock in profit as well since it also exhibited a sudden drop in price.

Then $AAPL captured my attention.  It began to trek up while others were correcting.  Sensing a coming rally, I immediately bought $AAPL and was glad I did.  Price took off not long after I bought.

$DDD began to stabilize so I bought back the position size I came in this morning.  This time I let it ride without further interference since I wanted to hold it over the weekend.

$BBRY, meanwhile, was behaving defensively the whole time while $AAPL was climbing higher.  Price began to go under the 79 & 89 ma so I shorted a starter position with a tight stop above the ma lines.  Prices bounced back up and I was stopped out for small loss.  Then prices fell off below the ma lines again but I did not try to short again because it was trading near the $16 which I saw as a strong support line.  Why chase when the profit potential was minuscule (being so near the support line)?

Then the unexpected scenario happened; $BBRY broke below $16 support line and all hell was released.  I immediately shorted $BBRY because the $16 support was gone and it took out yesterday low.  This time I shorted a larger position than earlier and used a trailing stop to protect profit.  The fall was incredible fast and my trailing stop was not hit even though I kept moving it down to track the falling prices.  By the time I was stopped out, I locked in over $1/share in profit for the run.  I tried a few more re-entry shorts with a much smaller size position afterward and ended with a small loss and win which pretty much offset each other.

There there, although I missed the gap up on $BBRY only two days ago, I was made whole with today action.  So you see, if you miss the boat, there is always another one waiting for you if you know where to look.  So, don’t sweat it when you miss opportunity because you cut your loss quickly.

$AAPL meanwhile, kept going up but because I moved my trailing stop too close, I was stopped out with profit near the high.  I waited for the minor correction at the top to settle down and by the end of the day, the mini-rally near the close convinced me to jump back in for the overnight hold.

While I had a good day on my swing/day trade; my portfolio kept on taking heat from $LRAD & $AMRN downdraft; but I wasn’t a bit faded by this portfolio balance change.  The way I look at it, as long as I keep up with a net win on my swing trading, I should be fine.  I simply don’t mix my position trades result with my swing trades result because, in my book, one has nothing to do with the others.

Why wouldn’t I take my loss on the position trades and buy them back cheaper, you may ask.  It is because I’m making a heavy bet based on an unexpected news that could drive my position trade up with no warning.  That is the kind of play I’m waiting for; therefore, I’ve to suck up any heat I may be taking now.

E.g. With $AMRN, any surprise news regarding NCE, takeover prospect, positive prescription demand, etc can drive the price up overnight with no warning.

And thus end another week of trading…

Current holdings:


Btw, I log-in my trade activities within a reasonable time in my twitter account, you can see them here: @tradingmy2cents

My 2 cents.

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TIMBER! Watch out for the Blackberry trees!

With $AAPL restoring back to its darling status, who needs $BBRY?

I saw weakness in the $BBRY all morning and failed one short attempt; but when $BBRY breached the $16 level, that had to be the tell.  So I shorted $BBRY again.

Look at the 3m $BBRY chart below.  Did you see the waterfall price action?  I love waterfall price action when I’m trying to short; and I loathe waterfall price action when I’m long.

Take a look at that beautiful waterfall from the courtesy of $BBRY:


I guess rumor of $AAPL launching new iPhones in the summer isn’t helping the Blackberry trees…

My 2 cents.

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Consolidating in the twilight zone… Oop! I meant twi-walls zone

Today $SPY bounce confirmed the solidity of Giant Wall One as a support.  Thus, price action is now consolidating inside the two Giant Walls.

I see this as a confirmation that the bear is not winning the war here; otherwise, $SPY would have fallen under GW1 and created widespread panic.  Last night before I went to bed, SP500 was printing negative 2.50 but I told myself that I would wake up to see a positive SP500; lo and behold, I was right.  Why would I think that?  That is because I see the GW1 as a huge support.  You see, these two mythical walls from 2007 and 2000 hold a lot of psychological power among us simply because of its historical significance.  Thus, each of these two walls can either be a powerful resistance or support.  It just so happen that these two walls are in the vicinity of each other that we have a twi-wall zone that holds such unfathomable power.

Consider ourselves lucky to be witnessing such historical price interaction inside these two mythical walls.  Due to the steeper angle of this current rally, my money is that we are taking out GW2 shortly.

Take a look at the daily chart below and you will understand where I’m coming from:


My 2 cents.

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The Insatiable $AAPL wants more!

I was doing my normal stock stalking and then all of a sudden, $AAPL blew me a breeze and winked her eyes at me.  One look at the chart and I could see what $AAPL meant.  She wanted to get high with me.

“Come over here and take me with you, NOW!”

Jeez, I couldn’t say no to that, immediately, I bought some $AAPL and she was right, she really wanted to go higher.

Look at the $AAPL 5m chart below and you will know what I mean:


Take a look at the 15m chart below:

$AAPL went over the resistance established yesterday @ 09:45am.


So far, $AAPL is making me very happy! 🙂

My 2 cents.

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Today Portfolio Adjustment (03-21-2013)

Today was a bag of mixed nuts…

Market opened down and $DDD actually opened and stayed positive for a good five minutes before it started to go with the crowd. I was tempted to cancel my stop so I could sell at the market. Why wait for the stop to fill, right? But then the memories of my previous action of jumping the gun before the stop hit reminded me of the foolhardiness of deviating from the plan. Often times, I would jump the gun and watched the price took off without me; if I had stuck to my original stop, I would have stayed on with the runner. So, I decided to let my stop do the work and surely it did.

Not to be cut out of a possible turn-around (trap or not), I waited for a confirmed green bar after a minimum of two red bars before jumping back in for a bounce. It happened and I went back in with half of what I stopped out with. I placed my stop below the low of the day and wait. It was a volatile wait for price went up and then came back down. Thanks goodness I refused to jump the gun and stuck to my stop. In good fortune, the mini-downdraft was not strong enough to take the price down to hit my stop. From there on, the price began to climb and never looked back until the last 40 minutes before close. I continued to add more $DDD during the uptrend. I now hold a bit more than what I stopped out from this morning.  By end of day, I was doing pretty good with $DDD.

I had another “miss” that, this time, it bothered me a bit more than yesterday’s miss on $BBRY. $DNN shot up and I completely missed it because I was busy watching $DDD and a few other stocks. I had a pretty good size position on $DNN yesterday until I thought I was being smart to sell the position to raise cash even though I was at breakeven level. Well, with hindsight, it was one of those bonehead “yellow belly” move that I ought to give myself a kick on the behind. I spent a few more minutes “regretting” the $DNN miss than what I spent on $BBRY’s but that was about it. I moved on.

$DCTH looked strong in the morning and I felt pretty good with my decision to get back in yesterday. Then I checked $PACB and it was acting positive as well; so I decided to buy back some $PACB.

$BBRY looked strong above $16 and did not look like it would correct down below; so I bought a starter position on $BBRY with a stop below intra-day low. So far, I’ve not been stopped out yet.

I checked $GLOG, one of my favorite stock to buy, and the chart looked good- like a bunch of jumping beans on the support line. There was a strong support in the low $12 on the weekly chart so I decided to buy a starter position as well. Unfortunately, price did not stay up and eventually came down below my entry point. Since my paper loss was minimum and I don’t mind taking heat as long as it hasn’t dropped below the $12 support area.

By end of day, $PACB clearly looked sick since my entry so I reduced my position size by 60% to cut loss and minimize exposure. If it doesn’t bounce tomorrow, I will sell the rest.

Meanwhile, I continue to take heat on LRAD, AMRN, and TINY; the rest was just small paper losses that I could wait to see what would happen tomorrow before deciding to cut loss or not.

In general, I don’t mind taking heat on my position trades because it is “part of the job” to do so.  While I may be taking some heat now, I see this heat as pale in compare to the potential gain I expect to see in the future.  Therefore, I don’t sweat the heat here.

Current holdings:


My 2 cents



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