Palatine

It is days like these which filter out the strong from the weak. The weak will be stopped out (has not happened to any of our positions yet) and the strong will survive this bearishness and find their way to our targets. It is also days like these the trader has to be aware of and take appropriate measures of insurance. In practical terms this means that I have shorted the SPY ETF's at market open as a hedge against our long-biased portfolio. The new candidates are not doing particularly well today (except for SO) but time will tell. Here they are: AET (Long): Stop @44.50, Target @49.40 CEM (Long): Stop @8.15, Target @9.40 NWY (Long): Stop @7.05, Target @9.50 SO (Short): Stop @36.50, Target @35.20

I can't find this ticker symbol.

New week, new watchlist: Long: ABI, ACLS, AES, AET, AFG, ALL, ALXN, AMB, AMGN, ARW, BLUD, BRCD, CEG, CEM, CG, CMO, COO, CSE, DOUP, DOX, EPIC, EYE, HOG, FL, KNL, LINTA, MYL, NWY, OMX, PALM, SKX, SVU, STAR, UNFI, WMG, ZLC Short: CTX, HOT, MOLX, NFLX, PEP, PPS, TEN A few of them are really good candidates and I will be posting them as soon as the trades were filled in the morning. As June is going to be the first full month since inception of this thread I will be posting the results at the end of June.

It is extremely rare that an unpredictable event will cause an account blowup intraday except if you are over-leveraged. Even with futures it would require a massive move against your position to trigger a margin call. In case it would, that individual should probably stop trading anyway. To get back to your question, it makes sense to hedge against a long-biased portfolio with a short position in index futures or ETF's if you expect a minor correction. This is a measure to protect a certain amount of profits and reduce exposure. Or if you wanted to hedge an individual position, options are a solution, as well. Say you are long GE stocks and expect earnings to disappoint but you remain bullish for the long-term. What you do is buy put options and pay this premium to protect your unrealized profits. So either earnings are as expected and you let your options expire worthless or earnings disappoint and you reap in the profits or even make use of your rights to sell the stock at a higher than market price. In either case options are understood as an insurance against adverse price movements and that's the primary reason why they have been introduced to the market. Whether hedging makes sense in day trading remains to be discussed. I personally don't think it is necessary, let alone helpful intraday because reducing size would have the same effect as hedging.

Do you know of a software platform that offers a quick way to load up stock charts in an instant? Something very similar to eSignal. You just enter a symbol into its quote window and boom it loads the chart. I could need a good charting solution for my little thread over here: http://www.traderslaboratory.com/forums/f110/swing-trading-opportunities-3933.html Thanks

Two more entries: CPHD (Long): Stop @22.65, Target @27.80 ARRS (Long): Stop @7.55, Target @10.70 The CNP (one of the few shorts) looks a bit tricky. It's close to being stopped out, perhaps on Monday if bears won't take it lower from here. All other positions are doing well and right now I have no reason to exit any trades. I did not take the DELL trade as it seems to be falling from the 23.80 resistance noted before. Not a good long to take in my opinion.

More trades today. DD was shorted at 48.00 since I have not removed the order. Now if you look at its most recent chart you will see how it's dropping from 48.00 again. This is good! Exactly what I want to see as a seller. DD (Short): Stop @50.20, Target @46.00 (see attachment in previous post) ABT (Long): Stop @53.50, Target @58.00 DFG (Long): Stop @27.00, Target @32.50 Another one that I'm looking for on the long side is DELL. After its earnings report this stock looks promising! I have a hard time finding short trades and wished there were more to hedge against adverse price movements. What I do instead is trade the ES futures on the sidelines (both long and short) to reduce this exposure and also make up for that VTIV loss. A trader should capitalize on all these instruments that are available to maximize return and minimize over-exposure through hedging. In summary we still have 8 positions open and running!

The way to do battle is the same whether it is a battle between one individual and another or a battle between one army and another. You should observe reflectively, with overall awareness of the large picture as well as precise attention to small details. The large scale is easy to see; the small scale is hard to see. To be specific, it is impossible to reverse the direction of a large group of people all at once, while the small scale is hard to know because in the case of an individual there is just one will involved and changes can be made quickly. This should be given careful consideration. Interpretation: It is easier to trade according to what is happening in the large picture other than looking at every detail as the direction of tiny price swings is unpredictable. The market moves with great force in one direction and once this direction is identified, go along with it. The influence of a large group is impossible to reverse all at once which means that the direction will persist for a long-lasting period of time. A trader constantly fighting these forces is going to have a tough time. (see attachment) In large-scale military science, knowing the state of affairs means discerning the flourishing and decline of opponents, discerning the intentions of adversary troops and perceiving their condition, clearly seeing the state of affairs, determining how to deploy your own troops so as to gain certain victory by the principles of military science, and doing battle with knowledge of what lies ahead. If your own power of insight is strong, the state of affairs of everything will be visible to you. Once you have attained complete independent mastery of martial arts, you will be able to figure out the minds of opponents and thus find many ways to win. This demands work. Interpretation: Evaluate the condition of bulls and bears. Who is having the control over the market as of this moment and where is an area where things could change? Be aware of potential reversals at S&R levels as these are areas which the opponent uses to strike back and attempts to steal the oars. Quotes from "The Book of Five Rings" by Miyamoto Musashi.

Closed out VTIV, it's getting ridiculous. MENT target was reached.

One more trade executed, with one pending which is SO. I have a sell stop at 35.90. If it drops to there I'm short SO. PPC (Long): Stop @23.15, Target @29.00 SO (Short): Stop @37.30, Target @35.00

Observe the indices in the background for confirmation if you are really about to day trade stocks. The overall sentiment is important, not exact patterns. There is an old saying on the Street that says "a rising tide lifts all ships". And it's true. If the overall market is bullish, you are better advised with long opportunities. In case of GOOG, the Nasdaq is most interesting to watch.

Thanks for your feedback MC. It comes close to scalping I'm rather humble. Over the time this style has prevailed because too often a profit has turned to a loss or break-even by waiting for bigger targets that never materialized. A couple of more trades before the close: A (Long): Stop @33.95, Target @38.00 DLB (Long): Stop @44.15, Target @49.80 LXK (Long): Stop @34.75, Target @39.20 CPB (Short): Stop @33.70, Target @31.50

The VTIV is close to 1:1 from where I entered. I do agree that the higher this ratio is the better it can be for a trader. Those setups are rare, however, and in the meantime money can be made on those 1:1 trades. Trade management is something where great minds part so my intention is merely to point out opportunities and the reader has to do what fits his/her trading style best. What I take into account is the probability for reaching a specific target. If this probability (based on my perception) is high enough I'm in without further ado, even with risk/reward as low as 1. My turnover ratio is very high which means I get out as soon as the target is triggered and jump on to the next trade. I don't stay in with remaining positions but close it entirely. The 200 MA should be a minor problem in MENT. What I see is a hold and close above resistance Waiting for price to go above this MA would pretty much eliminate its potential.

I entered two trades today and have set the orders for a third, which is DD. VTIV (Long): Stop @32.80, Target @38.00 MENT (Long): Stop @9.80, Target @11.30 DD (Short): Stop @50.20, Target @46.00 (an entry anywhere near 48.00 would do it) Don't chase DD. If it wants down, let it. No need to enter it at a disadvantageous price.

"It's like fishing." Great metaphor! Thanks for the post.