Friday, August 27, 2010

One big mac, no coke please. $MCD $KO

Friday, August 20, 2010

Reading the Tape so as to avoid losses. $AKAM

I entered thursday short the market, including a short position in $AKAM. I was not too sure about this position; $akam is a "weird" stock but $nflx was down heavily on wednesday the market was not strong so I thought maybe high beta stocks might fall.

But come thurday mornig , the market is indeed falling a lot in the pre-market, but $akam was suspiciously stable. I decided I would give $akam a very short leash; I would give it a chance to fall quickly at the beggining or else... When it showed no relative weakness in the first minutes I covered at 9.31.31 and at 9.33.26
Good thing I did , because from then on its relative performance was very stong. I use relative (to the sp500) strength often to tell me what a stock "wants" to do.


Sunday, August 8, 2010

A trading mistake.

I went into the employment numbers heavily short. This might have been a mistake since I had no particular insight into the numbers. The only rationale was we were at recent highs so maybe a better than consensus number was needed for significant upside. The real reason was I was on a loosing streak and was hoping (hoping ...how embarassing) for a bad number.

But this is not the mistake I refer to in the title . Rather the fact that , lucklily, the numbers were a bit weak, and I suddenlly saw myself with almost $3000 in profits...and then I got greedy! The sp500 was falling 1.5%, a big move...but I thought it would go down 2% (why!?) so I relaxed and held to the close...and my excellent profit turned into a mediocre $600 profit...and leaves me hoping (argg!) for a neutral or down opening on monday.

So summing up...do not get greedy. Also do not let your recent perfomance influence you. In my case my abismal recent performance influenced me into being greedy , since consciously or not I´m sure I was trying to hard to make up for recent losses...normally I would take the $3000 .

Thursday, August 5, 2010

Contrarian versus Trend trading

Type "trend trading" in google and you get 5 250 000 results. Type "contrarian trading" and you get  2 690 000 . ( It would be funny if contrarian >trending !)

$GS and $MS will suffer from prop spin-off

I beleive one of their advantages , if not the main one, is that their flow (customer) trading gives them an advantage into what the"market" is doing. This allows their prop. desk to benefit...in a way its kind of legal inside trading. If they install a real chinese wall, this advantage is gone. (This applies to other investment banks as well, but more so to $GS and $MS...just look at the % of profits from Goldman´s famous FICC department.)

Wednesday, August 4, 2010

SP500 new recent high not convincing.

While the sp500 reaches new recent highs, the russel 2000, the banks, and the semis could not give a shit. very suspicious.

Tuesday, August 3, 2010

Thoughts on my trading style

I believe most successful traders develop a style that fits their personality for whatever reason, consciously or not. The basic choices available are trend following or mean reversion AND your time frame. I trade predominantly in the "square" under mean reversion on one axis and intraday or overnight in the other axis.
My investment horizon has a half-life of three days ; i.e. one week IS the long term for me.