put call ratio on stockcharts.com

This is one important indicator offered by StockCharts.com.
As far as I know this indicator is very useful for daytraders but I think It should be integrated in any system no matter the timeframe.

The link to this chart is : $CPC.

a new market wizard was born

Recently, Andrew Lahde who shot to fame with an 870% gain last year, wrote a farewell letter to all its hedge fund clients. After reading the letter and some comments I just realized that everybody focused on the "Harvard Idiots" and the "Hemp" parts but nobody said anything about the key of his success.

Read carefully the section below:

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life – where I had to compete for spaces in universities and graduate schools, jobs and assets under management – with those who had all the advantages (rich parents) that I did not.

Well, did you get the idea ? The guy reiterates what other market wizards have always said :

1. invest only when you have a strong opinion about the market
2. waiting on the sidelines is sometimes (or most of the times) a good position
   

But there's a thing Andrew said nothing about: THE RISK . As long as the guy is retiering we can assume that he is smart enough to realize he will be unable to reproduce this 1000% return in the future and I guess he is aware of the huge risk he took.

Here's the comment of Cullen on the risk/reward matter :

Sounds like Andrew knew he had rolled the dice on an incredibly risky bet that just happened to go his way. A year earlier and he would have been writing a "Our timing was wrong..." letter. The smartest thing about a guy like this is that he knows he made a huge wager that likely couldn't ever be repeated and knew when to walk away from the table. Good for him. But I would die to know his risk adjusted return. Sounds like he was using the same leveraged high risk trades that got a lot of people in trouble....

Well, that's it, ...there is only one thing to say:

So long suckers !

Interactive Brokers

Since I'm trading using Interactive Brokers I will use this blog post to add useful links related to this broker.

[Edit 09-Mar-2009] Here is a post related to IB's symbols and how to use them.
For charting one can use :
1. sscharts .
2. atrader.org
3. tradeproject.de
4. ibcharts

pattern of the day

EUR/USD 1 hour chart

Short EUR/SEK

Shorted EUR/SEK

When should I close my FOREX trades ?

Long GBP/CAD, after several days of trending in my favour during the morning the candle looked like forming a reversal pattern plus the previous resistance. I feared that I will lose a big part of my profit therefore I decided to exit.

BAD IDEA ! .... just look at the next following days.

CONCLUSION : For all my FOREX trades I will close my trades during the NEW YORK session.

whipsaw song

Ed Seykota and his band

la isla bonita

During last days I observed a lot of islands in my charts :


or :



Normally the down trend should continue, but don't forget : THE PRICE IS ALWAYS RIGHT !

lessons learned

At the end of a very unsuccessful day ( almost all my new trades were stopped out ) here are the lessons of the day:

1. always trade in the direction of the market sentiment ( for this I will make a small research in a future post)
2. don't hold more than 5-6 positions at one time. Instead of adding a new position to your portfolio you'd better filter the ones you have and maybe then add others.
3. don't enter too many position in one day ( no more than two I would say per day)
4. don't enter too many positions per week ( no more than 4 per week)

stock du jour SEPR

I opened a new short position on SEPR:

Two long shadows

This is a pattern to watch: 

GBPCAD-daily - Two long shadows

How to trade it:  The two long oposing shadows represent MARKET INDECISION. The following days have to be crucial. Watch for a candle pattern and trade in the direction specified by that pattern.

Fake breakouts

In one of my previous posts I noticed the fact that the Gold broke up the resistance and there is a possible buyout comming. Well, the break out proved to be a fake one and some of us lost some money :).


Here's the way to play it next time ( hindsight rulez ! )