SKUL CANDY

SKUL

Im currently in SKUL 100 shares @ 7.65. Its current price is 7.46 and my stop loss is 7.24 which i feel is reasonable. I wanted to give SKUL that extra space since I know it may have the potential of boosting above $8 very soon with its recent TOSHIBA deal. I see it consolidating around the low .40's and potentially boosting after a few down days. It's been boosting since December 16th from the $5's. It does look very far from the 50 MA so it may try to come close to it before bouncing back. This play could have been better had I waited and had my stop loss at below $7. But we'll see where it takes me. I did not really analyze this stock too much before buying it it was more based on news. Clearly you should analyze a stock as much as you can before buying it regardless of news.

"these are just my opinions and not a buy or sell recommendation. i hold a position in this company but they are not paying me to post this". 

IDN

IDN on the DAILY 

Couple of points to make here. First you can see there is a support at around .45. Second its bounced off the .45 pretty heavy each time. Third there is a huge bull candle which covers a range between .45-1.00 that is a wide spread! The volume also indicates strong buying pressure for the past 4 business days. Lastly, if you look slightly to the left you will see a long white candle that ranges from .45 - almost .70. To me this shows that the stock has some serious demand still at the .45 regardless of its downtrend. The doji candle showed to us a sign of a pullback at the .45 which also indicates a reversal pattern.


 
                                                                     IDN on the WEEKLY

The weekly chart shows us good buying signals in a different perspective and we must always try to incorporate different chart periods when observing potential plays. What we you see here if you break up the pattern into segmented parts then you will find its forming a Flag formation (higher lows + lower highs). Typically Flag formations come to an ultimate point where it will consolidate then pop or drop. I believe this stock will go up in value because of the signals described above but if it doesn't for some reason or another I have placed my stop loss below the 52 week minimum @ .24. My position is 400 shares and the first exit im taking to lock in gains is 0.7 releasing 140 shares and locking in $30.

Next exit @ $1.00 releasing 55 more shares locking in about $30

Remaining 205 shares  "ride or die" 

205 @ $2 = $310 

Stop loss = $100 Loser

"these are just my opinions and not a buy or sell recommendation. i hold a position in this company but they are not paying me to post this". 

QTM - QUANTUM CORP

Above is the chart for QTM - Quantum Corp a company that provides data protection and management services. I used a stock screener to find these types of stocks, the only other option using my filters was AMD and I already have a position in that. So lets get down to the analysis of this chart and try to find a good entry point and exit points. 

As the daily chart above shows the stock is presently in an upward trend and finished strong on Friday January 3rd  2014 with a close price of $1.27. To the left of that candle you will see an indecisive candle or otherwise known as a basic Doji candle. This type of candle usually means that the direction of the stock may change. For instance if the stock is going down then with a Doji candle close of that day the stock may potentially rise the following day but it depends on various factors such as the next day's opening price. As we can see the opening price of the stock on Jan 3 friday was @ the close of the Doji candle which was $1.20 and if you look at the 30 minute chart of QTM on google finance you will see that for Jan 3 friday the stock never went below $1.20 rather it boosted to a high of $1.27 and closed @ that price which signifies massive buying pressure. I wanted this stock to close above $1.20 for Jan 3 friday for me to really see if its worth the buy and that it did!

The weekly chart shows a resistance mid $1.40's range. This will be my second exit. 

We also look at different pressure zones by viewing previous days highs and lows. If this stock does manage to go higher it could hit a resistance @ $1.31. I see a possible fake out above that price only because the stock has been boosting for the past 3 days and typically a fake out can occur in a situation where there hasn't been much selling pressure for a while from my own experience in trading. 

QTM has also just experienced a double bottom pattern and those who entered above $1.21 could possibly be in a nice position. 

My game plan: I see the stock creating a new support @ $1.25 and hitting $1.31 or with the fake out a bit over that price @ 1.33 before the sellers come in and bring the price back down.. Throughout next week I need QTM to show a closed price at or above $1.25 for me to seriously consider buying this stock.

week 1: this stock has been closing above 1.2 mark which is not bad but i'd like to see some more higher wickets on the candle sticks intraday. today (jan 13 monday) the after hours of the stock jumped to $1.40. wow! let's see what happens tomorrow morning when markets could potentially bounce back to the positives again! 

300 Shares @ $1.25 

First exit 150 Shares @  $1.35 

Second exit 100 shares @ $1.45

Remaining position let it ride.

My stop loss is below the 52 week low of $1.10 which is 0.17. 

I'm still uncertain about this stock as I have only been following it for 2 days rather than a week compared to other stocks I trade. But next week i will update my game plan accordingly depending on the stock behavior. For now this is my general idea and we'll see what happens next! 

Week 1: The stock did close @ .25 on one of the 5 trading days and for the other days it closed above .20. what I was happy to see was that it touched .29 on monday January 6th which showed that it had strength to go even higher! and that it did!

Week 2: it opened @ 1.4 with a high of 1.43 it hasnt been this high since beginning of October 2013! Lets see what happens next! 

"these are just my opinions and not a buy or sell recommendation. i hold a position in this company but they Are not paying me to post this". 

Above you will see a weekly chart of NOKIA's stock on the NYSE. Along with it i've included the 20,50, and 200 DMA's simple. We can analyze this stock in various ways. Im going to try to keep it simple so that I dont get too confused myself. First off we can already see that the stock is in an upward trend and currently if we place a straight line (support line) below that trend we can find that the price is almost touching that line or is very close to it. Therefore, the price is at the support of the trend and has the possibility of bouncing off that support continuing its upward momentum. If you look closer at the more recent days we can see that the stock has had about 6 down days where sellers came in and believe that the price will not hold above $8 per share. Today NOKIA closed above 7.71 and engulfed the last 3 days of downward candles just like that! If tomorrow's low is no less than $7.50 than we can almost be certain to see a jump above $8.

My game plan: Wait for tomorrow's confirmation of a price no less than $7.50 and a closing price above $7.70.

Buy 100 shares @ $7.71
First exit 50 shares @ $8.15
Second exit 25 shares @ $9
Third Exit let it ride

"these are just my opinions and not a buy or sell recommendation. i hold no position in this company nor are they paying me to post this". 

Psychology of trading

GREED

In a winning scenario where the market is in your favor DO NOT let it fool you into thinking that your stock's potential hasn't hit its peak. Cover your "R" (the $$ amount you were willing to risk on the trade), cover your exits and ensure that your stop limits are in place for any reversals on the remaining position. In day trading let your remaining position ride until market close. 

For long term investments the same method can be used but continuous adjustment is needed as markets change over time.  

FEAR

Do not be afraid of losing on a trade. It's part of investing and you will learn from it. The worst is when you cannot accept your losses and suddenly your plan to exit the trade is delayed because of this. What usually ends up happening in this situation is an even bigger loss than what you originally had and this will certainly make you wish you had taken the first opportunity out. If you stick to your plan you will build consistency whether its a constant loss or gain you know that your committed and that's key when trading.  

HOPE

When you start to hear yourself hoping for a stock to be profitable or to turn around than at that point you know that your doing something wrong. Your showing the market a sign of weakness and your decisions are then solely based on emotions. "I hope this stock goes up in value and then maybe I will cover some of my gains. I hope this stock doesn't go down tomorrow or else I'm out of the money". Rather analyze what the market is doing and customize a plan so that you can eliminate the feeling of hope with the feeling of certainty knowing your loss and gain amounts accordingly.

REGRET

Missing out on a potential movement or feeling remorse on a decision you made that cost you money won't get you anywhere. You have to learn to move on and look for the next potential opportunity with a clear mind. If you missed a good investment opportunity don't be worried the market has plenty more for you in the future. On the other side, if a decision you made cost you money clear your mind as you will definitely need it in your next trade. If you continue to feel a sense of regret in either two of the situations your almost guaranteeing yourself being consumed by the market on your next trade. 

The beauty of an ideal Stop

MNKD
Mannkind Corporation

Long 150 Shares @ 7.58, R = $15, limit = $0.10
Covered 150 shares @ 7.48, -1R Day. 
I'm proud of myself for committing to all my rules and not caring where the market goes (no emotions). Obviously it would have been nice to come out on top but the fact that my R was very little increased my comfort. Good Day!

Looking at the image above you can clearly see that MNKD built a resistance at 7.57 pretty much after its gap down from the open of the day. The floor was around 7.47 to be on the safe side and it also tried to dip below that twice within the same time frame. When viewing MNKD on the 5 minute, daily, and weekly I saw a potential buying opportunity at 7.58 with a stop loss limit of 0.10 which would bring me little above the low of the day or support. In addition to that I took the market conditions into consideration and seen an upward trend to support my decision. Once MNKD hit 7.58 it quickly rose to 7.65 but couldn't break it perhaps due to market consolidation. What I wanted to highlight on this trade is how the correct STOP could be a game changer for you. Knowing your stocks High and Low before placing a trade is very effective because it gives you an idea of how much potential the stock has in going both up or down. Furthermore it gives you an idea of what degree of risk you can take and where to place your selling limits if your longing or your cover limits if your shorting. Without this very important information your limits if not placed appropriately may never reach its target. Ultimately leaving you holding on to a consolidating stock if not a losing one.

In my example I had a 0.10 cent stop loss limit which allows me to cover the first half of my position at 7.78 (0.10 x 2 = 1R, where R = $15). The high of my stock was 7.88 just .10 cents away from my first cover position. Not good. Reason, because it would take a while for this stock to reach 7.78 which in turn leaves me with either a consolidating stock at various price ranges or a losing stock and I'm out 1R for the day.

Instead my risk on this trade should have been at 0.06 as you can see around the time I purchase it the floor was at 7.52. And going below the 7.52 would have meant it would have needed to break its trend as indicated by the dark green line on the chart above. So hence, having a price target at 7.58 and a 0.06 risk would have been more ideal and allowing me to cover half my position at 7.70 rather than 7.78. Potentially a better trade overall.



"these are just my opinions and not a buy or sell recommendation. i hold no position in this company nor are they paying me to post this". 

The Power of Paper

A paper trade is a trade that is done without taking any real monetary risk. In other words its a trade that you do not physically use real cash on rather you can write what your buying or selling at the price you want and record your gains and losses all on paper. The downfall to this is that you could be missing out on potential big gainers. However, there are more benefits to this method such as learning how to trade if your new to it, not incurring any real losses which puts you in a comfort zone to learn better. You want to make sure you are not just placing one trade after the next without understanding truly why you are placing that trade because then you wont be learning much. Treat each trade as if its a real trade with real money being used so that you can make more realistic decisions and hence you can be more prepared when the time comes you will be trading with real money. 

WEN (0.05 risk, R = $10)

Longed 200 shares @ $7.61.
Covered 100  @ 7.71 

Covered 50  @ 7.81

Covered 50 @ 7.79

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Total R = 3R gain

SGOC (0.10 risk, R = $10)
Longed 100 shares @ 2.35

Covered 50 @ 2.55

Covered 25 @ 2.75

Covered 25 @ 2.75

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Total R = 3R gain

PXLW (0.10 risk, R = $15)

Longed 150 shares @ 4.93

Covered 150 @ 4.83

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Total R = -1R loss

Todays R = 4.5R gain

I reduced my R from 50 to 15 because I felt that by doing so my comfort level would be higher along with my confidence when placing a trade. The last thing you want is losing 50-100 on a single trade. By having my R at 15 I know that even if I take a 1R hit each day I'm only down $75 for the week not including commissions and fees. This strategy of reducing R size is very important as it will allow you to be comfortable letting go of losing stocks without feeling too much of a blow compared to being down 50-100.

I will continue making paper trades for the remainder of the week and make a real trade as I see fit. My goal is to make one R for the week. Im already up 4.5R's.

 

"these are just my opinions and not a buy or sell recommendation. i hold no position in this company nor are they paying me to post this".