This morning action of $AAPL is very unusual.  The sudden burst of energy after 10:00 am was purely titillating.  Like an attractive woman beckoning you to come over.  You know what I mean.  You can’t help but being pull by an unknown force.  You inch closer while the woman, oop! I mean $AAPL, is telling you to take her by the look of her eyes.  She is ready, she seems to say.

So, like a gullible man with a fondness for attractive woman (who isn’t?), I went for it and bought a starter position on $AAPL.

So far, I’m being pinched for the moment.  I’m not sure if I’ll get bitched slap later on.  I sure hope not!

I’m putting a stop below today low just in case she may just be someone who want to steal my wallet…

Look at the 3m $AAPL chart below:

You see how excited she became after 10:12am?  How can you not be excited???

Look at the daily chart below:

Did you see how she bounce off the support line last week?  You will see the support line in the weekly chart below

I’m going to try to sit on this woman, oop again!, I mean $AAPL, for as long as I can.

My 2 cents.

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My trading style is all about high beta.  While some of you may leverage yourself to the hilt with $AAPL stock, I load up on high beta stocks using cash.

Both styles are obviously high risk with a high reward scenario; however, I’m more likely to walk home with a few more buck than those who leverage to the hilt when the market crash or the stocks in question crash.  These few bucks that I still have after the calamity will give me another chance to make a come back by buying, you guess it, high beta stocks.

Since I trade biotech, which by nature is high beta, a lot, I’m always subjected to high risk at all times.  Thus, in order for me to survive, I’ve to be quick in my execution.  I try not to think too much when I trade.  You can say I trade by reaction.

Below is an example of my thought process:

This morning, $BBRY opened higher but then started heading lower.

“Hey, $BBRY looks good at the open”

“Wait a minute, $BBRY is tanking”

“It dipped to negative territory in 6 min after open!”

“I’m still in the money.  I’ve not given back too much yet.”

I looked at the daily bar chart and compared today bar to the previous day bar.

“Not looking good.  I’m taking my money now.”

I clicked the mouse button to sell all my $BBRY shares to close.

Done.

All three 3D printer companies headed higher after open; but then after 10:00am EST, both $DDD & $SSYS began to tank.  Meanwhile, $XONE was fighting the downdraft and even bounced back up after falling off a bit.

“XONE is holding well despite $DDD & SSYS tanking.”

“XONE is dipping… not yet, it is holding…and bouncing back up”

“Give it a few more moment”

“Holy Smoke! DDD is crashing and look like SSYS is following through.  XONE is still holding… impressive!  But I’m not going to wait for it.  I still have profit so I’m taking it.”

Click, click, & click.

I’m out to lock in profit.

$DCTH opened up at the open and then after 20 minutes began to tank.  It went into negative territory and dropped quickly to the gap-filled area of $2.04 which I postulated was a good support.

“No way! Already? Let’s see if it will stabilize.”

“There is a lot of bid in there.  Maybe it will hold.  Wait…”

Meanwhile the bids size increased and price looked like it might hold.

“Looking good.”

10 minutes later, the sizable bids had all been hit and price started to tank.

“Holy smoke!  I’m getting near the breakeven mark!  I’m getting out now while the bids are there to take my load.”

“Maybe I can buy them back below $2.”

Click, click, & click.

Out of $DCTH at breakeven level.

And this is pretty much how I think during trading. Really, there wasn’t much to think but to express short burst of emotion in reaction to the price action at the time.   I know what I’ve to do and I strive to do it quickly.  There were times I hesitated just a bit and the stock god took that opportunity to punish me.  A few seconds of hesitation and someone took away the bids I needed to get out without tanking the price further down.  Darn!  Then you had to scrambled out before others jumped ahead of you.  Sometimes, it was the right thing to do ’cause price just kept on tanking after I had gotten out; but sometimes I just happened to sell at the bottom for the day.  Yeap, it happened!

$DCTH was a good example today.  Now, in hindsight, it would be nice that I took profit at the open; but you should not think like that.  You just have to deal with the hand (like a poker hand if you will) you have at the moment.  I was given the choice to get out at breakeven and I took it.  Right after I took it, price continued to tank further down and broke under $2.  I bought back some shares to see if the bounce had leg but it didn’t.  I dumped it when price went back down to the low $1.9x area.

Did I think about what if price went back up after I got out at breakeven?

Sure but that was the least of my worry at the moment.  I was more worry about turning my gain into loss!  As far as I’m concerned, I do not have the same “trust” in $DCTH as I’ve for $USU, $AMRN, $LRAD, and even $SZYM.  Therefore, I’m not willing to hold this one against me after I was sitting on a gain.  This thought process simply pushed away any thought that I could be getting out at the bottom of the correction.

Thinking about it, perhaps my username should be called “High Beta Trader”.  Feedback anyone?

My 2 cents.

 

 

 

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Not with Amazon breathing down their neck.

Look at the daily $BKS chart below:

Price action took out the low of the inverted hammer (or shooting star) candlestick pattern from yesterday; in my book, that is a good short.

Did you see how two of the momentum indicators turned south?

I sold (short) a starter position on $BKS today with a stop above yesterday high.

My 2 cents.

 

 

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Is it over here?

Above is the weekly chart of $CGEN. You can see the cup and handle pattern except that the rim of the cup on the other side is a bit taller than the handle.  Hmm…  there are two walls to take over before this beanstalk can grow wild…

Take a look at the daily $CGEN chart below:

There are good support at the last December high at $5.86.  The next wall is at $6.17 which looks attainable.

I’m already in from last Friday and will add more if the $6.17 wall is taken out.

My 2 cents.

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Now that I’ve my day behind me. I like to go over some more thought on how I trade the biotech.

I’m sure you’ve many questions popping out of your head while you’re reading my previous post:

1) How do you know which biotech stock to buy?

2) Are you kidding me, you can lose real money fast by trading biotech!  This is real suffering!

3) Ain’t you exposing yourself all over again by jumping back in after you’ve taken profit?  How do you know it won’t gap down the next day?

I’m sure you have more questions but let’s just deal with this three questions for now.

1a) It’s all about the story and potential catalyst.

The story usually begin with a new discovery and that Phase 1 or 2 studies are positive; and that the next phase result will be coming out in a few months.  If there is a prospect of a takeover due to an “expected” positive result, there will be a pump to drive the price up.   The catalyst can be a single news item that show some minor progress which by itself means nothing much until the result comes out in a few months.

However, be aware that some news will simply trigger sell the news scenario; therefore, instead of seeing price increases, you see a price drops from early buyers taking profits.  And to minimize our exposure to sell on news, we need to pay attention to the chart.

1b) I like to look at the daily chart to see if the price action is acting like it is going to bust out.  If you go back to my older posts here and my twitter historical tweets, you will see that I’ve bought in the biotech stocks due to price action looking like it is going to bust out, or breaking out of a downtrend line, or  taking out previous pivot high.   These are all simple basic breakout chart patterns I go by.

Of course, there is no guarantee that price action will actually broke out or continue higher after taking out the previous highs; but together with a good story and a catalyst, those breakout may just have a better odds in following through.

It’s all about playing the odds.

2)  Yes, you can lose money really fast trading biotech.

One of the key factor in causing most people to lose money in biotech stock is greed.  I’ve witnessed first hand a friend who just could not take the profit despite my pounding my fist on his table (figure of speech).  The drive was phenomenon.  Price had gone from 75 cents to over $3.00 after almost six months in waiting (did I mention ‘patience’ in my last post?).  The catalyst was that the Phase III result would be fantastic due to a similar “test” done in Russia.  However, when there were doubters who started questioning the so-called “Russian result” and asked for links to access the said result, no one was able to provide a link.

Right there and then, I took profit as soon as the market opened the next day.  I believe I sold my shares around $3.50 even though the price continued to rally to $3.80 the same day.  I told my friend I had my doubt and suggested he should take his profit as well.  Unfortunately, his greed had such hold on him that he told me he bought more at $3.80.

I guess you could predict the rest of the story; $3.80 was the high of the stock and it eventually crashed to penny because the phase 3 result failed.

From my experience, most of the money in Biotech are made during the drive to higher price in anticipation of a positive result.  The fuel to supply these dizzying rise is the greed of the buyers.  Sometimes, you will be amazed at the POWER behind the greed that can drive the price so high that if you don’t take that precious moment to take profit, it will crash down so fast that you can see your paper gain evaporates into thin air.

How do you know when is the precious moment to take profit?  Ha! You will never know.  You just have to bite the bullet and take that profit in front of you.  Sometimes, you just happen to pick the top and sometimes you will just see the price continues to gap up from where you’ve sold.

I left quite a bit of money on the table when $MJNA went from 11 cents (where I bought) to 35 cents and then it started crashing back down to 25 cents on the day it touched 35 cents.  I sold all my shares around 28 cents on its way down and thought I had a good day.  Then the price turned back up to 32 cents by end-of-day.

Ok, I told myself it was not a big deal.

Then the next day, price gapped up and reached 50 cents before settling down around 40 some cents.  That is the “suffering” I refer to on my first post.  Price continued to bounce off 50 cents in the next day which drove me even crazier.  Boy, did I suffer! (grin).  It was like the stock god was taunting me…  “neh neh neh neh neh… I’m hitting  50 cents, where did you say you sold?  Ha! Ha! Ha!”  So cruel!

Now, you know what I mean by “suffering”.  However, I prefer this type of suffering over actual loss.

If you read my twitter and past post here, you will find out that I’ve lost dearly on my $ETRM trade.  Foolishly, I traded thru the release of the result.  I knew the result might come any day but I thought I had a few more days to decide.  Noooo!  The result came out and I instantly lost close to 60% of my $ETRM investment.  Ouch!

Luckily my win on $MJNA helped offset this loss.

Trust me, biotech is not for the faint of heart.

3) Yes, I’m exposing myself again by going back in before the day is over.  Usually, I try to buy less than half of my original position after I’ve taken profit.  Therefore, if price drops the next day, I won’t lose too much since I’ll dump it first thing.  However, if price takes off like I think it will, I’ll then add more like I’ve added to $PACB today.

It’s all about taking a calculated risk by not buying size on the second time around until you see proof that the momentum is still there.

I think I’ve written this post longer than warrant so I hope you don’t fall asleep half-way here.  Thanks for reading if you’ve come this far.

My 2 cents.

 

 

 

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I remember watching “The Andromeda Strain” when I was a teenager and this movie really stimulated my curious mind.  Little did I know that biotech is an essential part of my trading vehicle.  I love biotech because it’s a science which sole purpose is to better our human life- either in sickness or better quality of life.

There is a lot of money to be made if you play it right despite its high volatility.  Somehow, while you can make a lot of money in the market, it is going to make you suffer before you can see the reward.  Suffering doesn’t have to be painful as in taking a huge loss;  the correct “suffering” in trading biotech is the need to be “patience” and your ability to let go of “unclaimed” profit.

“Sh*t! the damn stock takes off without me after I’ve taken profit!”  is one of the suffering a biotech trader has to live with; otherwise, you will suffer real losses, losses that you may not recover from.

However, one of the trick I’ve learned in playing biotech is that you can always jump back in even after you’ve taken profit.  The trick  is to monitor the momentum during the day.  What you don’t want to do is to be out of the position before day end; otherwise, the gap up will make it that much harder for you to get back in.  If momentum is strong near the end of the day, you can elect to jump back in even though you may be paying a higher price from your earlier exit- just like I did with both $DCTH, $PACB, & $RPTR last Friday.  While this technique will not work 100% of the time (that is what taking ‘calculated’ risk is all about), it can make your day when it works.

Now, all three are tracking higher which prove my thesis.

See daily charts below:

I got back in $PACB due to its ability to stay near support even though momentum was down all day.  Since it was near the top level support, I was willing to take the calculated risk by buying back in for less than half of my original position.

Btw, due to the strong reaction from The Fly regarding my username, tradingmytwocents,  I’m changing it back to zenhunter which I’ve spent a year here at ibankcoin to establish.  I’ll be a fool to ignore a sound advice when I see one.

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As you all know, I’m shocked deliciously over the weekend when I received the invitation from The Fly to join the interim blogger status.  That is surprise #1.  I’m very honored and I will not disappoint.

My 2nd surprise is my insanely stupid name “tradingmy2cents”.  Hmm, maybe I need to think about that!  or not.  As stupid as it is; if it makes me tick as a blogger or as a trader, then why not?  Someone mentions zencents and I’m tickled by that one!  Hmm… perhaps zen2cents?

The good beginning is that I’ve made a damn good decision jumping back in $DCTH Friday near the market close despite my panic attack earlier in the morning and the fact that I’ve to pay a lot more to get back in after taking a loss during the morning breakdown.  Right now, $DCTH is tracking 10.71% higher for the day and I say this is an auspicious sign.

So, how do I get the nerve to jump back in giving that I’ve to pay more from my earlier entry point even after taking a loss that day?  Well, it all comes down to my years of trials and tribulations in my trading career and I will have many more posts to discuss this as an interim blogger.

I won’t be kicking off with a long interim blogger first post; but I’ll surely going to come up with content to tickle your curiosity.

Please feel free to comment anyway you feel so I can strive to improve.

Thanks again to The Fly for an opportunity of a lifetime.

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Take a look at the monthly $SPY chart below:

I create parallel trendline of the recent 2009-2013 rally and lay it on the last two rallies.  You can tell the angle of ascending of this current rally is steeper than the last two.

What does that mean to have a steeper angle of ascending? You asked.

Well, it could mean the following theories:

1) There is a lot of money in the system going back into the market

2) There is a lot more money than the prior two rallies going back into the market

3) The universe is always expanding, along with our population; hence there are much more money going back into the market than ever before.

4) With so much money wanting to go back into the market, the speed of ascending of this rally is faster; hence the steeper angle of ascending.

5) Giving my 2 cents economic theories from the above, there may be a lot of pent-up power and money waiting to go back to the market that the two great walls of resistance will be taken out pretty soon.  Well, the first one has already been taken out; the second one will be a matter of time now.

There, there.  We may have a mother-of-all-rally this year.  My earlier panic-attack, I learned with the help of  The Fly, has to do with my overweight on biotech speculation.  11 of my 14 positions was in Biotech.  No wonder I panic when I saw the $PACB red bar Friday morning.

Btw, this is a monthly $SPY chart, so there will be wiggle in the daily bar; so trade accordingly.

My 2 cents.

Btw: I change my username from zenhunter to TradingMy2cents.  Time to reinvent myself…

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I don’t know what have gotten over me, suddenly I’m overwhelmed with a mortal fear that the stock market is going to crash.  Whenever I have this kind of feeling creeping over me, which doesn’t happen often, I automatically liquidate my swing trade positions and raises cash which I’ve done this morning.

Why am I feeling this way?  It is hard to pinpoint to any specific event.  Sometimes it is a combination of events that just simply spook me unexpectedly.

I bought back in $DCTH this morning at market open due to strong open and the fact that the general market was also up.  Then $DCTH went thru a fast sell-off which forced me to liquidate in order to cut my loss.  No, I wasn’t about to let this one trade to take away my $DCTH gain I made in the last few days.  Right after I sold, $DCTH popped right back up.  Now, this type of events are quite common in the trading world and you just have to accept them and move on. Gawd know how many times I’ve to endure these events but I know this is the price I have to pay to survive in this market.  Nevertheless the memory of how I’ve saved myself from countless colossal losses by acting fast encourages me to keep selling prematurely my long position to cut losses or lock in gain on my swing trade positions.

Anyway, after I sold $DCTH and witnessed the big pop up, I was irritated as usual.  No big deal since this type of frustration will wear off quickly once I see another trading opportunity presents itself.  But this morning, the DOW headed lower without letting up and the mini-SP500 was tracking almost breakeven for the day after opening up 7 points higher.  That by itself is also not a big deal; but then I saw $PACB tracking a red bar and it just triggered something inside me.

“Sh*t!”

Just like that, my mind went into panic mode and I started selling every swing trades I owned at the moment.  I’ve learned to stay true to my core position trades so that I won’t be left with no position when market continues to head higher despite my panic attack.  Years ago when I had these rare panic attacks, I went 100% cash and watched the market took off without me.

Well, I think the panic attack is the sign that either my body and mind have been pushed too far without sufficient rest and break or that I possess a 6th sense that forewarns me of incoming market doom.

I can tell you that the former is more likely than the latter; nevertheless there is one truism that I behold that allows me to survive and stay profitable for all these years in trading- when in doubt, move to the sideline.  In time, I learn that staying on the sideline doesn’t mean I’ve to be in 100% cash; I just don’t load up like I  normally do.

I’m going to heed my panic attack by taking a break to allow my body and mind to balance themselves. Time to read a good book and smell the roses.

Currently holding $LRAD, $AMRN, $USU, $SZYM, (starter position on $FAZ, $TVIX), and 51% cash.

My 2 cents.

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I love this stock simply because it offers hope to patients suffering from ALS.  Phase I trial has been successful and it looks like FDA is now offering some flexibility by allowing a public forum to air its concern about the issue involving the Phase II trial.

However, to me, the most important part is the break-out chart:

As you can see, while I have bought $CUR before the breakout happens, I’ve been waiting for it to happen.  And today, price action finally break-out of the downtrend line in a BIG way.

I’m a fortunate man this week, most of my biotech stocks I have bought are in green.

Go Biotech!

My 2 cents.

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