Don't Fear the Reaper

As most of you know, I've been following Timothy Syke's trading style for almost two years. I first saw him on Wall Street Warriors (Mojo HD network show about various traders/investors) a few years back, and enjoyed his brutal honesty and knack for profiting from penny stocks. Here's a pic of me reading his first book, An American hedge Fund, while on a mission trip to the Amazon region of Brazil last summer. His trading abilities are only trumped by his business saavy (as he's currently growing an empire built on stock alerts, DVD and book sales, and even a publishing company called Bullship Press, LLC). Needless to say, his ship has sailed and, to most penny stock pros, needs no introduction. As for the title of this post, I introduce you to Michael Goode (aka Reaper), a padawan/apprentice of Master Sykes. I began shadowing Reaper on various trading sites such as Tim's and Investor's Underground. He always posted intelligent questions and comments, and his increasing profits could not be ignored (he's even been featured in some of Tim's posts like THIS ONE).

I'm pleased to say that Reaper himself has built a very nice looking website (Pallian would be proud ;-), and posts a well researched watchlist and ongoing video teaching series. Lucky for us, it's FREE (well, for now at least). below is a video from just a few days ago where he not only confidently explains the technicals of VG (Vonage), but also correctly predicts the following day's price action. He was dead on, and I'm excited to continue my own apprenticeship under this up and coming Master Trader. Enjoy the embedded video (very informative once you get passed his music preferences), or click HERE to check out his site (and don't forget to buy him a cup of coffee using the link on the right-hand sidebar of his homepage).


Successfully merging Blue Oyster Cult and Star Wars references,

Evan (aka Island Minister)

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

Sirius Problem

No, that's not a typo. If you've been following my trades since I began this blog (and even more recently since I signed up on Covestor), you'll notice two stocks in my portfolio that I never mention: SIRI (Sirius XM) and THMR (formerly TMA, or Thornburg Mortgage). Everyone has skeletons in their trading closets, and these fellas are mine. I've ridden them down to almost nothing from about six months ago. I haven't the heart to part with them now, even though they continue to bludgeon me while yelling 'Yee-haw' on their way toward Subpennyland. Have any skeletons you'd like to share?

Besides the fact that Sirius's recent 'possible' bankruptcy news has eaten my gains from yesterday, I decided to short ARNA, and completely ignore rules #1-#3,#5 of my strategy. Everyone does this from time to time, but since I'm forced to ride my mistakes out (Rule #7), this trade could get ugly before the sun comes out. At least I only shorted 150 shares, and the stock is eventually due for a reckoning.

Learning about discipline the hard way,

Evan

My Four Horsemen

So while the world of finance came a-crumblin' down again today, being short MAXY, GERN, PALM, and SKYT (even though SKYT gained .01) paid quite well. Covestor is usually one day behind on updating their clients' portfolio values, but somehow my link (on the right) is two. I can't wait for it to show my most recent shellacking of the S&P. I would rather have the chart showing myself vs. Timothy Sykes (currently #1 on Covestor), but can't figure out how to configure the widget that way (any suggestions?).

I made two trades today, both profitable and loss preventing. I don't mind admitting that the talking heads over at Yahoo! Finance message boards are beginning to get into my head. Seriously, I don't know why I even read the ridiculous posts (9 out of 10 are bias with an agenda), but GERN is a stock focused on stem cell research, a science nobody really knows what to expect from yet. Given that Obama fully supports this type of research, I sold 100 of my 200 shares of GERN today at 7.48. I know, I know- I'm letting fundamentals interfere with my technical positions. I'm still learning the 'true' relationship between fundamentals and penny stocks.

Today was all MAXY needed to finally drift back below my initial buy (how many months ago?), so I covered 100 shares of my 300 at 8.17 near the close. I did this for three reasons:

1. Didn't want to be greedy (been there done that at the end of a down day only to see a gap up the next morning).
2. There was an earnings announcement after close. Don't think MAXY has a prayer (announcement hasn't come out yet 7:27pm 2/10/09), but why risk all 300 shares?
3. The stock downtrended aaaalllll day, and I followed Rule #6 of my strategy.

Unfortunately watching the market tread closer to year lows,

Evan

Triple Play

I am now officially short MAXY, GERN, and PALM. All three met my strategy's criteria, and after having posted about each (except for GERN, which I had on my Stock Status's 'Mission Briefing' watchlist), I'm pleased with my initial entries. I had off this morning, and was ready with reserved shares for both PALM and GERN by market open (compliments of Think or Swim). I'll skip any rationale on MAXY, since those of you following this blog know I've been short about a month. As for PALM (which happened to be my first short of the day), all you pretty much have to do is look at this 1 year chart:

Sure, it may go higher in the near future (which is why I eased in with 100 shares), but I doubt the 'PRE' phone is enough to sustain this quick rise from the $1's. I know I said I could care less about the fundamentals, but this really isn't a true penny stock- it's the company that brought us the Palm pilot. Regardless, it's either consolidating or losing steam (volume leans toward the latter). Now that this account is on Covestor, you'll be able to watch the outcome. Since I don't plan on selling (aka 'covering') for a loss, this could be a wild ride!

Last but not least...GERN! This stem cell play gave me the perfect entrance on it's midday spike. I shorted at 7.96 and already have a decent profit on my 200 shares. If I listened to some of the posts (pumpers galore) on Yahoo! Finance message boards, I'd be freaking out! There's a reason most financial sites claim to be 'For entertainment purposes only':) Does this 1 year chart look familiar?

If you're a trader, and haven't opened a Covestor account yet- do it! It makes posting sooo much easier, knowing you don't have to take screenshots of your positions (like I did numerous times last month) for people to believe you. Thanks for annoying me enough, Tim:)

Happy transparent trading,

Evan

Secret Agent vs. Trader

So my sister's wedding was this past weekend (she made the most beautiful bride ever!) and, being one of the groomsmen, I rented a tuxedo. One of the co-workers from my night job happens to be in design school for photography. Tuxedo...Photography. Was it even a question as to whether or not I do a James Bond photo shoot?



Yeah, I'm a pretty big fan. You know it's bad when I commited to 6am for the shoot- the morning after the bachelor party! The more I thought about what my next post would be (while waiting for MAXY to tank), the more clear my answer got- Compare the similarities of the world's best spies to the world's best stock traders:

1. TRAINING

In order to be the best at something, you have to be willing to make whatever sacrifices necessary- especially in the beginning. For undercover operatives, as well as all branches of the military, this starts with boot camp. Strict workout regimen, diet, and mental training begin to shape the individual into a soldier fit for battle (though the battle has not yet begun). With traders, this begins by watching the markets, reading as much material as your brain can handle (which isn't much at first when it comes to finance books), and paper trading.

2. DISCIPLINE

Without discipline, it is impossible to succeed long-term. As a spy, lack of discipline and focus could mean your life. As a trader, without discipline you may as well blend your money into a smoothie- jumping in and out of trades due to boredom or 'gut-feelings' is the quickest way to financial ruin.

3. STYLE

That's right- Style! James Bond has that certain 'something' that makes him unique. He's charming, British, likes his drinks a certain way, and loves to say his last name first. His style is evident within five seconds of coming across one of his 22 movies while channel surfing (Well 21 since Quantum of Solace isn't on t.v. yet). As a trader, you have to find that certain 'something' (most often referred to as a 'niche' trading style) that works for you (ie. is consistently profitable). Maybe your great at trading day-rangers like Muddy or shorting hyped penny stocks like Timmay. All I know from about a decade of trading (which spans countless profits and losses) is that your style is just that- yours. Simply following others' trades isn't going to cut it longterm.

Enjoy the weekend,

Dawson...Evan Dawson.

PALM Reading...

No, I don't personally condone or endorse palm reading as it relates to fortune telling, soothsaying, etc. I'm interested in the ticker symbol PALM as my next possible short. Darkside Trading, using Muddy's incredible scans, alerted me even before Timothy Sykes this time (probably because it wasn't up enough yet for his risk/reward ratio). I texted my Mom (who was way more available than my future brother-in-law Eric this morning considering he marries my sister Sunday) to short 200 shares of PALM if it surged over $9.

Let me just start a completely new paragraph here to comment on one of Timothy Sykes's posts (since it relates somewhat to me telling you that I texting my mom this morning). Tim is very transparent on his site about all his trades, most of his financial information, and even his extracurricular activities. I've been able to learn a great deal from him because of this. In this post of his (disclaimer: He can be eccentric at times and it shows in his writing:), he slams those who are less transparent. I don't blame him- he's had so many people (most of the time with anonymous or fictitious names) leave degrading comments on his site that the only way his business model works is by being an open book. I feel the same way, and want to set the (my) record straight:

1. I began this blog because I thought it would be really cool to detail my trades like Tim and many others. It would help me learn from my mistakes while I try new strategies while I slowly get the word out about the mission trips (which will definitely happen as time permits).

2. I am not claiming to be a stock guru. Trade at your own risk and learn from my mistakes with me. I view my trading as a supplemental income, and will probably never be able to live on the profits of day trading- that takes the kind of time/money/dedication very few are fortunate to have. My primary goal is to make enough to fund one mission trip/year (they usually run anywhere from $2000 - $5000 for a two week trip). My most recent was to the Amazon, where I took a picture of me reading Timothy Sykes's 'An American Hedge Fund' on the river- my two passions: Missions and the Market.

3. You'll see various ads on my page powered by Google's Adsense and hopefully some from Amazon (linking to books that have helped me learn to trade) and Tim's site in the future. I'm not suppose to urge you to click on them because that breaks the contract with Adsense, but it is the only way (and trust me, the revenue is extremely minimal at this point) I know how to make money from writing this blog- which isn't my goal but it's a nice 'extra'.

4. As I've said, I work two full time jobs (Target from 6am-2:30pm and Living Word Christian bookstore from 3pm-9:30pm five to six days a week). In order for me to have this blog, it takes sacrifice (usually posting on breaks at work or drafting half before I go to sleep and half when I wake up). The human body is simply amazing- and able to be pushed far beyond what we think possible. Unfortunately, like the stocks detailed on this blog, sometimes I crash.

5. I have opened a Covestor account under the name islandminister, and will be adding Think or Swim as the account's broker in order to let the world view every trade. I do have accounts with Raymond James and TD Ameritrade as well, but they only hold my IRAs and mutual funds (whose performance, needless to say, have been less than stellar over the past two years).

That's pretty much it- oh yeah, MAXY failed to crack $8 again, but is still downtrending nicely (lower highs and lower lows).

Have a restful weekend- I'm off to the bachelor party!

Evan

Picture Perfect

What a great day for this Sykes/Swing trading strategy! As mentioned in my previous post, I'm eagerly anticipating MAXY to break it's $8 support level. Today marked it's third attempt and, despite my previous 'Third time's a charm' wishful thinking, third failure to crack $8. When it couldn't break support after multiple attempts (as evident by today's chart below- courtesy of Yahoo! Finance), I decided to cover 100 shares.


To help you understand why I only covered 100 shares instead of the full 300 (already profitable) shares, here's a fairly detailed time line of thinking and text messaging to my broker (aka. future brother-in-law Eric who happened to be home with Think or Swim's software open:)

Text to Eric (10:01am): Maxy?

Text to Evan (10:15am): Down to 8.10

Text to Evan (10:23am): Low 8.04 back to 8.10

Text to Eric (10:38): Cover 100 under 8.05 if it gets back

Text to Evan (10:45am): Covered 100 at 8.05

I knew that MAXY was flirting with $8, and hoped it would break it- but when it didn't, I opted to play it safe (fearing another spike after another failed attempt). I figured (and this happened to be correct) that I could cover a portion of my shares, lock in some profits, and re-short the same 100 shares at a higher price if it bounced off support (like it did). My re-short of 8.47 basically happened because it was late in the day and I had the option to average up my short position. Below is the screenshot of my Think or Swim account's trading history over the past week to confirm. Could tomorrow be the fateful 'dip into the $7 range' day for MAXY? Stay tuned...


Happy Friday Trading!

Evan

Oh MAXY, you card!

Whenever I can, I like to check in on my stocks during actual trading hours (extremely rare occasions with two full-time jobs- another reason why this strategy works well for me). When I opened Think or Swim to check in on MAXY around noon, the 1 minute chart (basically showing yesterday's close and today's action so far) made me laugh out loud. The chart below wasn't altered in any way (use any online chart to confirm), and clearly shows MAXY bouncing off 'my' support level. That's right, MY entry-price $8.33 level of 'support'.


Feel free to comment and let me know how many of you have experienced this lovely type of coincidence before- when you're certain the entire market (at least the penny stocking world) is after you;) Really, I didn't know my 300 shares were such a force to be reckoned with. Needless to say, at this precise time (1:28pm 1/14/09), MAXY is still down trending toward the $8 psychological support level (after a 'watching paint dry' full hour of sideways price action at $8.65). This next attempt will mark it's 'third time's a charm' testing of $8.

Content staying short,

Evan

One Down, One to Go...

I've officially covered my HSNI position for a profit of about $350 so far (I say 'so far' because with so much downside potential still left in this stock, I opted to keep 50 shares short- which I'd like to cover in the $4 range). I could explain it all in detail, but I'll let this Think or Swim chart that I've used good ol' Paintbrush on, along with my past few posts, to do it for me.


You'll notice I covered for a small loss on the 26th once it broke out above it's 6.40ish high from 12/23/08. I still used solid technicals, but overall I still believe it doesn't matter all that much- 'certain' penny stocks that have gone from $2 to $7 (as I've learned from TIM) will settle back down if you can ride out the short sqeezes that can occur. I'm very pleased with this outcome on HSNI and first confirmation that my strategy is sound. Taking my emotions out of play and simply relying on time/technicals to do my work for me is such a relief- and profitable.

As for MAXY, the volume continues to wane- giving me the impression that the end is near. We shall see- if it continues to climb and test it's previous $12 resistance, I could be short my 300 shares for a bit longer than I'd hoped. Regardless, I'm sitting on a pile of cash courtesy of the Home Shopping Network (HSNI) that I'll use to short the next victim. I don't see anything that fits my strategy's description just yet (aside from XTXI which I may short on a morning spike tomorrow), but if there's two things I've learned trading that I've yet to master, it's 'don't force a trade' and 'don't enter a trade out of boredom'.

May your next cover be a profitable one,

Evan

Trading Week Ending 12/26/08

As mentioned in my previous/first post, my capital for trading has diminished greatly due to other investments and travel/missions. I am, however, trading extremely cautiously with an account I jointly oversee at Think or Swim. My future brother-in-law (also an experienced missionary) and I are using this account to both learn necessary skills needed to consistently trade profitably (a feat in which over 90% are said to have never achieved) and slowly add to it's bottom line.


Below, I've added charts and screenshots of the aforementioned Think or Swim account in order to illustrate this past week's trades (Sensitive account information has been intentionally left out). If you're unfamiliar with Think or Swim, I highly recommend checking out their website (I've always gotten great customer service from them, as well as reserves for hard to borrow stocks). This first screenshot details trade history (parameters set for 7 days). You'll notice the dates and times of the trades to the left, as well as the executed trade price on the right.



Below is a screenshot of a 5 minute chart for HSNI (a stock I was alerted to by both Timothy Sykes and Muddy over at Green on the Screen and Darkside Trading). My rationale for the initial short: HSNI had multiple up days in a row, and imo will inevitably fall back down to 'normal' price levels. The morning spike to 6.62ish had been the highest of the current run, so I was shorting with the prediction that, given the fading mid-day volume, HSNI would be unable to breakout passed that price. Did I short early and without confirmation? The simple answer is yes. I did have a mental stop-loss in place should my theory be proved wrong and the stock climb to make a new high. My prediction proved to be correct, and I decided to hold overnight as the stock failed to rise above my entry price late in the day (which would mark the 2nd retest of the day's/current run's high). HSNI had a nice drop most of the short trading day (which I would have covered into had I had more than 200 shares in play). I decided when the stock began to rally before close. Friday's volume was fairly unimpressive, and Tuesday's triple top gave a pretty firm ceiling for the stock to break through, so I decided to re-short after the morning spike had started to wane. I held over the weekend, wanting to see an identical drop as in the Tues.- Wed. price action. With the fading volume and failure of HSNI to make new highs after several attempts, this stock 'should' react accordingly. Knowing that stocks can pretty much do whatever they want, my mental stop-loss is in place. I'm already in the money at this point with HSNI, so barring a huge gap-up, I should be able to cover tomorrow. Again, I probably would have covered when the morning spike fell close to 6.20 if I was trading more shares.

This chart from Yahoo finance details the same time frame for HSNI as the one above, but shows the volume, clearly defined dates (both are also on the TOS chart but it would have made the image unnecessarily large) and is accessible by anyone with an internet connection. It would, however, be virtually impossible to trade using Yahoo charts because of the 10 minute or so time delay.

Below is the actual profit/loss information from the modest Think or Swim account. I've listed the top ten gainers of the last year to demonstrate the validity of shorting penny stocks that have run too far, too fast (a strategy I first learned from Timothy Sykes). It's no coincidence that 7 out of the top ten fit this description (the other three- MMM, FRE, and BBY aren't penny stocks and I probably shouldn't have been trading them in the first place). The bottom of my P/L list is made up of similar 'Big Board' stocks, and to my detriment carry larger losses than the top ten gainers- valuable lessons are all they gave me.

Merry Christmas!

I'm wishing everyone a Very Merry Christmas and Happy New Year!

   My goal for this blog is simple: Journal my adventure in funding a trading account, in which I will eventually be able to bypass the PDT Rule, while successfully funding short-term youth mission trips. Though funding an account is definitely not a new concept or endeavor that countless have tried, I've yet to see a blog detailing how one's profits have benefitted others by way of ministry.

   Apart from trading, I've been involved in another kind of investing- real estate. At the time of this post, I'm sure I don't have to remind anyone about the less-than-stellar returns in real estate over the past few years. Having used funds from my trading account to buy various properties, I no longer have any left to fuel my two passions: Missions and the Market. I will have much more detailed posts in the near future on everything from my likes and dislikes regarding online trading sites (have personally used TD Ameritrade and Think or Swim) and lessons on trading (ie. shorting, penny stocks, options, etc.), to choosing the next country I plan to take youth for a cross-cultural experience. 

   

   Since an extreme few know me in the trading world, this post (though my blog's first) will undoubtedly be unread and probably not referred to in the future. Welcome to humble beginnings. I had planned to start posting Jan. 1st, but alas- my excitement over following my life in trades and travel got the better of me (could have said 'impatience'). I'm also using this post to learn the basics of Blogger and Google's Adsense. Though I'm currently in the design phase of this site, I welcome any questions you may have about me in general, my trading and/or mission experience.