One of my favorite trading books is Trend Following by Michael Covel. In that book Covel describes a hand written note hanging on the wall behind the desk of legendary trader Paul Tudor Jones. The note read, “Losers Average Losers.”
The note was a reminder to Jones not to add to a losing position. I have come to embrace this philosophy as my experience with averaging down has rarely led to profit and almost always had negative impacts on opportunity cost. I have found that when a trade goes against me, the best thing to do is to sell it for a small loss and move on to another idea. Adding to positions that are in a downtrend turn small losses into large losses. With trading, keeping the losses small is key to Risk Management and leads to survival and profitability.
Continue reading “Losers Average Losers – $Study, Discipline, Plan, Process & Passion Win”
I’ve come to learn that stock trading is all about process. That is: you must have a process, you must stick to your process, and, most importantly, you must have a passion for your process. If you view trading as a continuous process, it becomes much easier to recognize what the market is telling you.
Best selling stock market books with titles like Beating the Street imply that the stock market is a game to be won. But what they don’t tell you is this: your lifelong understanding of games prevents you from intuitively understanding the stock market. Continue reading “Stock Trading 101: It’s All About the Process”
On Sunday night MGT Capital Investments $MGT was an unknown penny stock involved in online gaming and fantasy sports. By Monday morning $MGT had announced that they were buying John McAfee’s cyber security company, naming the cyber celebrity as their new CEO, and renaming the company to John McAfee Global Technologies.
Continue reading “$MGT: John McAfee + 11 Million Share Float = Fireworks”
Ubiquiti Networks $UBNT reported earnings on May 5th beating analysts estimates on both the top and bottom line. The stock appears to be consolidating again after the initial earnings report gap-up and looks like an interesting swing trade candidate. This stock has a very small 25 million share float of which 36% is sold short. Below is the short interest data via shortsqueeze.com:
Continue reading “$UBNT High Short Interest Earnings Drift Swing Trade – Ubiquiti Networks”
During the trading day on Friday, May 6, trader @wallstjesus reported some bullish “at market” weekly call activity in $HIMX – you can find the report here. Intraday on Friday $HIMX broke established support at $9.95 only to rally into the close with a huge 889,000 share volume spike that regained that critical support level. These events on Friday, combined with recent consolidation in share price caused me to flag $HIMX on the Facebook page before the open today as a stock that was showing some signs of a breakout trade.
The trade triggered today and was confirmed by a 61.5% increase in volume – 4,429,319 shares of $HIMX exchanged hands today vs. 2,741,460 on an average trading day. The stock gained as much as 6.42% on the day before ending the session up 2.72%. It should be noted that $HIMX reports earnings before the open on Thursday, May 12.
Continue reading “$HIMX Showing Signs of a Breakout Ahead of Earnings – Himax Technologies”
Twitter $TWTR held another disappointing earnings conference call today where they continued to demonstrate logic that confounds this Monthly Active User (MAU) and long term investor in the stock. Here are a few of the more befuddling takeaways from the day:
Continue reading “Twitter Earnings Call Takeaways: $TWTR Not #TWTR”
For the upcoming week, I have NanoString Technologies $NSTG on my watch list. There is a lot to like about this stock for a potential swing trade. This stock has a small float, a high short interest, and a good looking chart, which can be a great combination for a short-term breakout. $NSTG has been consolidating nicely since the beginning of March which has led to a rising 50 day moving average that is close to crossing the 200 day moving average; this is a bullish technical indicator known as the Golden Cross. In addition to the possibility of a Golden Cross, the chart is presenting a Symmetrical Triangle, which in combination with the rising 50 day moving average, is another bullish indicator.
Continue reading “NanoString $NSTG: A Lot to Like for your Watch List”