Dust Yourself Off

If you've been following this blog at all the last few months, you've watched me a:) Successfully profit from shorting 7 stocks in a row (when I stuck to my strategy), b:) Launch a website that focuses on my two passions: missionary work and the stock market, and c:) Completely disregard my strategy and hold on to two stocks that eventually led to a margin call, forcing me to watch my Covestor chart and $ dwindle to a negative % for the year. So what now? Being the movie buff that I am, I will explain how I plan to come back from this trading funk by rehashing a lesson from Top Gun. After Maverick, a fighter pilot for the Navy, loses his best friend in a training exercise, he finds it very difficult to fly again. He second guesses himself, is fearful, and quite frankly wants to quit. His commanding officer instructs Maverick's 'handlers' to "Get him back in the air- the sooner the better". This is the turning point of the movie, as Maverick comes back with a vengeance and achieves the success he was destined for.

There have been time constrictions lately (ie. still have two full-time jobs, planning the confirmed mission trip to East Africa, and opening another trading account), but I absolutely plan on keeping this blog alive. To bring you up to speed, in the past two weeks I've a:) Opened another Think or Swim account in which I plan to use for mission trip income (was already able to withdraw funds from successful FAZ and DDRX trades, as well as my first profitable LULU trade using put options), b:) was given a minor promotion at Target (moved from stocking to human resources- this is my morning job), and c:) Had a wonderful Mother's Day/Birthday with my entire immediate family, my brother-in-law, brother's girlfriend, and my sweetheart of five months, Michelle. Below is a great depiction of what truly matters in life:

From Left to Right: Brother and girlfriend, brother-in-law and sister, me, Michelle, Mom, Dad

Living in Exciting Times,

Evan

Three Things

1. Timothy Sykes Isn't Human.

There are traders, there are robots, and there are trading robots. Then there is Mr. Sykes. Somehow, he not only knows how to profit more than 90% of the traders out there, but he possesses a machine-like quality that seldom lets his emotions interfere with his trading plan. Perhaps this is due to the well-known lesson he learned after losing more money than some people make in a lifetime on one penny stock (It's all in his original book). He has turned a pretty surreal corner, and is now living the daytrader dream. Some people scoff at others' successes. I applaud. Now if I can only trade the perfect setups I've learned to spot from this cyborg mentor (while keeping my emotions and theories in check), I will no doubt reach that upper echelon of elite traders. I'm still coming for you Tim!

2. I've Had a Livermore Experience.

After recently watching Think or Swim liquidate some of my positions against my will (due to lack of funds and the use of margin, I had 200 shares of both LULU and PALM covered for me the last two days), I have once again regained the hope of victory. What is victory when it pertains to trading? Planning your trade and trading your plan. It's that simple. If you're wrong, fine- but don't keep having to learn the same lessons over and over because you somehow fail to allow yourself to change your trading habits. If you build a fortune, then squander it like Jesse Livermore only to build it again- Stop there! Evaluate what got you back on that plateau, and KEEP DOING THAT! In case you're interested, THIS is one of the best short biographies on the life of Jesse Livermore I have ever read.

3. I Am Planning My Next Mission Trip!

Yep- I've saved the best for last! I am finally going back to East Africa (Zimbabwe, Rwanda, Mozambique, and possibly Tanzania) this summer. I won't be alone either- my girlfriend Michelle and I will be flying over to meet a pastor friend of ours (Agatha Taylor- special lady who loves the Lord) and help train local pastors in kids ministry (Michelle's and my favorite), education, and help with various medical needs (malaria prevention, AIDS awareness, etc.). Michelle is a pharmacist, and returned recently from a mission trip to India. She truly is a woman after my own heart. Please keep the trip in your prayers and I'll try to post updates (although not too much since this site is primarily about the trading- Mission-trading.com will eventually have more about the missions).

Striving to stay focused in this break-neck-speed life,

Evan

Margin Call Averted...For Now

It just doesn't get much closer than that! I had a scheduled margin call today with Think or Swim @3pm. I was told I could either A:) add funds to bring the account to positive, B:) liquidate positions to bring the account to positive, or C:) Take market action (trade) to bring my account to positive. By holding all my positions, I essentially chose option C. If today hadn't have been the tank it turned out to be, I my friends would have been SOL (and no, that's not a ticker symbol). Behold LULU, the main reason for the margin call (and what kept me from being liquidated today):

I'll see this trade through, but what a waste of time- not to mention missed opportunities like DFR (a stock that actually meets my strategy's criteria). Do I think LULU is headed back down? Yes. Do I think my initial resistance 'guess' could end up being support (thus making it difficult to cover for a profit)? Yes. Have I learned my lesson? Which one? Um...Yes. YES!! UNCLE!

Praying for discipline,

Evan

ps- PALM was up today (lovely- can the PRE phone just come out already so people can 'sell the news'). FAZ is rocking again, now that people are realizing the banks and financial sector may still be in trouble (big surprise).

"Stress Tests are Fudge Tests", and I've Got a Margin Call

Here's the titular article- it's by Dr. Doom himself, and definitely worth a read before tomorrow's open! So I was early in my initial shortings of PALM and LULU. Wait, "strike that...reverse it" (Willy Wonka). I was not only early, but currently look like an absolute moron for not cutting my losses. My 'Bear Market Rally' convictions still hold (and growing ever stronger as this V-shape recovery pushes higher). There are few, at this point (especially in the media- big surprise), that share my sentiments. Tomorrow is key. Financials under the spotlight. The account I'm trading is at Defcon-1. My kung-fu grip is in it's last, white-knuckle effort.

Inadvertently becoming Livermore,

Evan

Here, Let Me Help You With the Long Weekend

So, if I had gone long the two stocks I shorted on Wednesday (LULU and PALM)- I'd be sittin' pretty. On the other hand, it would make it look like swing trading is easy (on nerves, trading accounts, etc.), and totally nullify the title of my last post. Instead of harping on the fact that, because of my current swing positions, I've fallen out of the top 100 Covestor rankings- I've decided to post a few items that have definitely taken my mind off of such things:

1. I signed up on Scribd in order to enter a contest, and found this gem: Why I Fired My Secretary Today

2. No need to explain this one- just watch and repeat (and you're sure to forward it to your loved ones;) Huge Dead Snake

Here's one you don't have to click on a link for:

A woman got on a bus holding a baby. The bus driver said, "That's the ugliest baby I've ever seen!"

In a huff, the woman slammed her fare into the fare box and took an aisle seat near the rear of the bus. The man seated next to her sensed that she was agitated and asked her what was wrong. "The bus driver insulted me," she fumed.

The man sympathized with her and said, "Why, he's a public servant and shouldn't say things to insult passengers."

"You're right," she said. "I think I'll go back up there and give him a piece of my mind."

"That's a good idea," the man said. "Here, let me hold your monkey."

Happy Easter!!! He Is Risen (well, technically not til tomorrow- even more technically, it happened about 2000 years ago),

Evan

Swingin' Aint Easy!

     Well, in case you're wondering, I'm still short PALM and LULU (which at this second is a profitable position- just don't blink). LULU was a great short after it's first down day (yesterday). Too bad I didn't have the patience to wait for the price action- nooo, I had to try and 'pick the top' (last Wednesday) and enjoy watching one of my largest share positions of 2009 just keep going, and going...(away from me). Technically speaking, there were many reasons why I shorted LULU (and am still short). RSI was above 70, more than 100% run in one month, etc. If I had just waited to short until today, I would have had a nice in-and-out trade. More importantly, I would have my funds freed up for other positions- like my new found best friend CZZ (thanks Tim). Behold the unsuspecting beauty:

 

     CZZ is currently higher than this 3 month chart (around 4.70). The goal tomorrow morning is to cover my LULU short (gonna be tough to not hold longer- but I should be forced to only take a small profit because of how lame my entry was), then use the released funds to short CZZ, IF:

1. I can reserve shares (will try 400 and only short 200 at first)

2. It gaps up and surges over $5 before 10am

     That's it. Any variations of the above plan and I go back to bed (it is my one morning off all week- btw, why am I still up- it's 1am!)

Watching the Futures Tank,

Evan

ps- It has been brought to my attention that I use trading terms sometimes without explaining them. If you have any questions whatsoever, feel free to e-mail me or post a comment (just know that I don't claim to be a professional- but will help steer you in the right direction if I can).

Mission Accomplished: MAXY

Yes, you read that right! I've finally decided to cover the last 100 shares of Maxy that I've held short for months. This is bitter sweet, since I was pretty much forced to cover due to a (please don't kill me) margin call (I'm wilting as I type while I await your berating). Yep, folks- I zigged when I should have zagged. My two shorts (LULU and PALM) have laughed at me since Wednesday (which happened to be my one morning off this week- what do you think, was I thrill trading?) My reasons for shorting these two still hold- though my timing (early as usual) was clearly off. As for my dear old friend MAXY, here's the chart that details my second biggest gainer since using my strategy (that I desperately need to stick to):

After all was said and done, my total profit from MAXY was $398.07 ($55 in commissions for all those 100 share trades). I started to show all my entries and exits on the chart above, but there's no way (it would drive me insane- there were 11 different trades). If you're interested, just type MAXY in the search bar at the upper left of this blog. Scroll aaaallll the way down to start at the beginning.

As for LULU, I was early, but the lack of pretty much any news (combined with the fading volume and nice, bearish candle that just showed up) calms my trader mind. The chart below is courtesy of Stocktwits:

Reaching for a huge gap-down Monday,

Evan (aka islandminister)

I Love M&M's with Downtrending Heads

There were many great morning spikes to take advantage of today, provided you a: waited for the spike to top off and b: were patient enough to ride out the downtrend and/or 'M' shape (also known as a 'Double Top'). M&M's are not only one of the best inventions when it comes to candy (btw- have you tried the incredible new Premiums line?), but a nice technical indicator on a stock chart. One of my trades today, though currently going against me while holding, relieved my stress by revealing the 'M' pattern on more than one occassion. The tell tale chart below is of LULU, a stock I was initially notified about on Stack Your Cream's site (not sure the meaning of that site's title, but it definitely gets a laugh when you say it randomly/sternly to someone:) When viewing this chart, it's important to remember that the timeframe was intraday (and pretty much only good for scalping- which is great if you're not subject to the PDT Rule). You'll see in this post about PALM, though, that the pattern works on multiple timeframes. Anyway, here's the chart:

For info on 'Ms', check this site out. Peace,

Evan