I suck at trading

About 2 months ago I went through every chart in the Russell 3000. I made a watch list of stocks that looked like good trades.

Some of would have gone against me, some didn't move much, but a large amount would have made money. They are featured here.

However, chances are that I would have covered them way too early.

My technical analysis skills are longer term, my trading isn't. Because of this I know I need to take a more detached view. Set a stop when the trade goes on only adjust that.

I think the thing that has cost me the most money this past year is taking profits. So from now on I'm adjusting stops but not taking profits in the stock trades.



I was short TAP on a break of this channel. But I covered way too early.

Slow

One of the big difficulties in trading I've had is finding out what kind of trader I am. Right now I'm a shorter term currency trader (hours or days) and a longer term equities trader (weeks or months). Although I really enjoy trading currencies I don't really have the time while I'm in school. This is forcing me to become a longer term trader.

One of my strengths is longer term technical analysis, but I'm not very good at trading this analysis. I prefer the immediate feedback of short term trading. Waiting months for a position makes me overthink and usually exit early.

The problem for me with currency is that the amount of time I can devote to trading varies with the level of school work I have, but I'm not able to distance myself from the market. It seems like I'm either following the market (constantly checking quote, reading blogs/twitter, reading news) or I'm out of the market (not paying close attention). I think it's difficult to find a middle-ground.

Currently I have two long-term put positions. I have stop losses with alerts on both of them. I'll adjust the stops on them, but I won't exit them unless they get stopped out. And I'm only checking the daily close so that I'm not tempted to watch them all day.

Over the summer I'll be glued to my screens, but for right now I'm slowing my trading down.

Yen Hangover

Yen was really overvalued. I got pieces of themove this week in usd/jpy. But after it get to the top of this channel I started shorting. Got stopped out on a few small positions, but finally got a nice move. Covered most of it, still short a small amount.


Nakagawa is definitely plastered. I think Bernanke, Greenspan, and Paulson getting drunk together would be hilarious.

Know your products

The double-short China fund (FXP) came out on 11/8/2007. The FXI topped out on 10/31/2007. Pretty good timing. I bought FXP when it first open around 75 and sold later in the day for a nice profit. Later in '07 on I was still bearish on China and bought some more to hold. My timing sucked and I closed the trade with a close.

In retrospect that's a good thing since it's at 36 now.

There's been an explosion of popularity in ETFs but it seems most people don't know what they are trading. Ever since my trade in FXP I've also done a lot more work on figuring out what is in an ETF and reading the prospectus.

This especially matters in more complicated ETFs like those that have leverage or are based off of futures. Great post at AlphaTrends on why people should be buying USL and not USO.

I was also doing some research on ETNs. One big difference between ETNs and ETFs is that ETNs have credit risk. So in effect they are like an ETF with a short put option on the provider. You won't get much upside for taking the credit risk, but you run the risk that they provider goes bankrupt. It reminds me of some of the "hell bonds" in "Traders, Guns, and Money".

USD/JPY

USD/JPY has been incredibly strong. Since Thursday it has rallied from 90 to 92. It's very overbought but has a lot of momentum. It's been channeling up and is testing its R2 pivot for today.

It's also right at a descending trendline from Nov. 24.
I've got a small short position from 91.94 with a stop at 92.10. Closed US markets on Monday should make it interesting.

Current Currency Setup

Long a GMCR put, but otherwise avoiding equities. Focusing on USD/JPY. Watching yen futures really helps when trading the spot market. I wish there were more liquid currency options. No one trades the ISE or PHLX ones. The FXY options don't look terrible though.

eur/cad

Something is off about my stock trading lately. I'm not sure what it is. I'll keep the trades on that I have now, but I'm not doing any new trades.


Currency is going well though. Here is an amazing setup in EUR/CAD that I am currently short.

Test the lows

Last week I was getting short GBP/JPY around 129. I got stopped out of the second short with a small profit. After that I got long GBP/USD for the last few hours and closed it just before the close. Overall a good week.

Among the blogs I read it seems like a consensus that we test the lows of the year. Although I agree with the outlook, I'm slightly cautious because it seems like a uniform opinion from every blog I read.

Down around 13 on the ES with 20 minutes until the open.

Right now I'm short DRI, but there are a lot of others I would like to be short.

GMCR looks like death on a weekly timeframe. Looks like a 2-year head and shoulders pattern. I might buy a small put. On the daily it looks like it's up against resistance around 40, which makes for a good stop.

I wish I would have stayed short AZO. I had too big of a short position on. I'm trying to trade smaller because it's easier to stay focused and disciplined.
I should my ADM put on the 14th, but know it looks like it's ready to fall again.

This past weekend I've been reading a lot of news and fundamentals. Normally I only trade off of charts but I'm going to try to incorporate more fundamentals into my thinking.