Quick update

 

Obviously it has been some time since my last update – a month, in fact. Life happened, unfortunately.

A few positions were exited in that time (all my positions can be seen here). Most notably $TWTR, which was a larger than normal loss. Three reasons for this.

One, this particular position did not have a hard stop in place. The reason for that is because on rare occasions, usually swing trades, my stop won’t trigger unless the daily closing price is below it. Therefore, I can’t very well enter a hard stop. As my swing trades are based off the daily charts, and a lot of “noise” can happen during a trading session, it would be too easy to get taken out of a trade prematurely with a hard stop in place.

Two, I was not physically able to monitor things (the aforementioned Life thing). Everything else in my accounts cruised along on auto-pilot…which only demonstrates how superfluous I am to the trading process on a daily basis. Apparently I’ve managed to render myself obsolete…

And three, the obvious, and somewhat rude, gap-down after earnings.I’ll hold trend trades through “noise” events like earnings, but swing trades are a judgement call for me. If the trade is working well, and I have a bit of margin for safety, I’ll hold through. Doesn’t always work, and in this case, it didn’t.

Meh. It happens.While a 2% loss is clearly larger than my usual 0.5% allowable loss, it’s not account-devastating.

The other exits over the past 3 or 4 weeks were pretty boring in comparison.

Closure

 

I thought I was doing OK.

I was wrong.

I wrote a rather lengthy post. Then I deleted all of it, except for those two lines above.

Please. If you’re going to end a relationship with someone, particularly a serious partner where time, emotion, and energy were greatly invested, give them closure if they ask for it.

Leaving someone to feel tossed away, or that they didn’t matter, is hurtful and damaging. And if you have done that, I would venture to say that it is never too late to give them peace. It’s a generous gift that costs nothing, and yet has immeasurable value.

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“I’m so close to success – what are some words of motivation?”

 

The following question was recently posted on Quora:

This was my answer:

 

The paths of failure and success are uncomfortably close. While they might seem miles away from each other, they really aren’t.

Talk to those that have succeeded in their own fields or endeavors. They will likely tell you the reason they succeeded while others did not, is not because they were brighter, faster, or luckier; but that they chose to continue, while the rest simply stopped.

I have no way of knowing if you will ultimately be successful. What I can tell you is that you have to try. And no, trying doesn’t necessarily mean you will be victorious. Maybe you won’t. Don’t judge yourself by whether or not you reach your intended goal; judge yourself by your determination to try – that you had the courage to leave your comfort zone, and that you didn’t choose the easy path.

Let’s say for a moment this doesn’t end the way you intended it to. Build on that, and realize that we do tend to learn far more from our mistakes and failures, than we do from our successes. That’s how we grow, and become better.

And it’s a cliche, but true: whether you think you can, or you think you can’t…you’re right.

Good luck!

 

 

Here’s the link to the original Quora post: http://www.quora.com/I-dont-see-it-just-yet-but-Im-so-close-to-success-and-I-know-it-What-are-some-convincing-words-of-motivation/answer/Brian-C-Vancouver

 

How to follow someone else into their trade (…and bank large currency)

 

life-is-hardTo be clear, I’m not advocating that you center your trading plan around the trades of others. Because, let’s face it, that’s not a plan. It’s just stupid. And lazy. And you’re not stupid, or lazy, right? Of course not!

While I do my own scans to find stocks, I also don’t live in a vacuum. I chat with people on Stocktwits and Twitter, and there are no shortage of shared ideas. Because I’m a curious person, I’ll often pull up the chart on stocks that get mentioned. Most of the time it ends there, and I move on. Sometimes though, it’s an idea that I think is worth a second look.

nobody-everHere’s the thing: an idea shared, is just that – it’s only an idea. Ultimately, before pressing the ‘buy’ button, there’s still work to be done.

1. Make the idea your own. What does that mean? Well, it means, does it fit your own criteria? If you had just come across this stock on your own, why would you be interested in it? And if your only reason for buying it is “because that super smart, handsome, successful Howard Lindzon TraderVancouver guy is buying it”, you’re sunk.

Speaking of Howard, he recently posted this:

howard 1Which, I think was a great share. And I’m seriously looked at some of these ideas. But I can’t just follow Howard blindly into a trade, because that’s just stupid (pay attention, we’ve already covered this); I’ve still got work to do. And that brings us to…

2. Have a plan for the idea. What does that mean? It means:

  • What’s your time frame? (hint: It might not be the same as the poster’s)
  • What’s your entry price?
  • What’s your stop?
  • How much of your account are you risking?
  • How much are you buying?
  • If you’re buying options and not stock, what expiration, delta, among a plethora of other questions.
  • Are you trailing a stop if it works, or will you trim and trail?
  • What kind of stop are you using – hard or mental?
  • What’s your stop based on?
  • Will you add if it works?
  • How will you know when to add? How much? At what price?

Isn’t this just so exhausting? Sheesh. And don’t think the questions stop there, because they don’t.

My point is, the idea itself really is only the starting point. There’s still a crap load of work to do.

funny-quotes-stupid-people

Timeframe…and liquid crack

 

NFP (non farm payroll) numbers were released this morning, and they were, well, let’s just say they were less than expected. By about half. I could go on here about why trying to anticipate and trade nonsense like this is futile, or the worth of so-called professionals that “forecast” (read: weathermen) this stuff, but that’s for another post.

With the release of the numbers, the futures market wet the bed, soiled their undergarments, crapped their pants, however you wish to phrase it.

But let’s talk about whether or not this even matters to you. If you trade off the 5 minute, it probably will. Here’s the 5 minute chart:

nfp 5min

Well, THAT’S disconcerting….

 

…And here’s the weekly, taken at the same time:

nfp weekly

Hmm, what? Oh. yes, I think I see the disastrous news there…that speck on the top right…

 

So, know your timeframe, and stop worrying about things that you cannot possibly control, or even trade.

As for me, I’m off to make a border run for Trader Joe’s; my only worry this morning is whether or not they will have any grapefruit juice in stock; it’s always hit and miss. It’s good to be Canadian, it’s better to be a Canadian that lives near the US border. #merica.

Oh, and yes, their grapefruit juice really is THAT good. Liquid crack.

 

 

“Why is trading so hard?”

 

This was a recent question posted on Quora.com

Here was my answer:

For the majority of traders, it isn’t the trading that’s hard, it’s managing their emotions, and sticking to a plan, that’s hard.

                                     Trading is:

 (please excuse my crappy pyramid. You don’t want to know how long I struggled to make this damned thing)

Ever been driving somewhere that you’re not completely familiar with, and start to wonder if maybe you made a wrong turn? As the miles start to tick by, your uncertainty grows, and you ease off the gas. Maybe you consult google maps on your iDevice. It says you’re on the right course, so with that, you happily steam forward. Nothing has changed – the road is the same, the cars around you are the same, the plan is the same, but now you’ve got renewed confidence that you are indeed going the right way.

And it’s the same with trading.

Without a plan, a plan that you can refer to and rely upon, confidence diminishes.

Where traders frequently falter, is in their ability to follow their plan, or their map, if you will. Questions of self-doubt might start to creep in, if the trade goes against them. Thoughts of,

Why isn’t this working?
How much money have I lost?
Why can’t I do this?
How come I keep screwing up?
What’s wrong with me?
Why am I so stupid?

None of those questions, by the way, are remotely helpful.

Your job as a trader is to come up with your plan during non-stressful times, so that it can be thoughtfully and prudently constructed…and then executed when it needs be, in the heat of the moment. You don’t see the captains of ships frantically putting together evacuation plans as they’re taking on water. Nor do military commanders scramble to devise retreat plans when they come under unexpectedly heavy fire. Because that would be foolish. And stupid. And most likely, those plans would really suck.

Instead, come up with a thorough plan before you set sail, attack an enemy, or put on a trade.

The good news is, coming up with a solid plan is the relatively straightforward part (and an entirely different conversation).

The bad news is, managing your emotions when those unhelpful questions like the ones above start surfacing, well, that’s the hard part of trading. However, once we recognize that, we can address the issue, and learn to manage not just our trades, but our emotions. And from that, comes confidence, and trading becomes less hard. That’s terrible English, but you get the point.

Final thought: Pros focus on limiting risk and protecting capital. Amateurs focus on on how much money they can make.