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).

Dodged a Bullet

Unbelievable. When you go through bouts of fear/greed/anxiety/throw-in-the-towel emotions, followed by Troy-inspired "Is there no one left!" ecstacy- you're probaly a: trading with scared money, or b: trading without a plan and/or without technical/price action confirmations. Such was the case of my last two trading days. I don't even need to link to my post about fleeing the temptation to trade FAS, because it's RIGHT UNDER THIS ONE (written the night before my brief stint as a kamikazi). Below is the chart of my folly:

Yes, after commissions I made $20.25 from FAS. Ask me if it was worth it. I'm not even going to add the trade to my 'Missions Completed' list (not worthy). I want to thank everyone who tried to warn me- great comments. Hope your day went well, and without any deer-in-the-headlight moments we traders are all too familiar with:)

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

MAXY PAYNE

Since Max Payne (the movie, starring 'Marky Mark' Wahlberg, adapted from a popular video game series) was released this Tuesday, I thought it only fitting to tie it to this post. Below (left)
is a perfect representation of the scowl I had today while viewing MAXY's chart (right).

I was working during market open (as usual), and failed to see MAXY trading under $8. When I texted my Mom (because my brother-in-law is traipsing around Jamaica on his honeymoon) at 10:10am and asked "Maxy tankin' yet?", she responded with "8.19" at 10:30am. Great, I'm thinking- it's gonna test $8 again, and this could be the straw that breaks the camel's back. Little did I know, MAXY had opened under $8!
Low of the morning shows $7.77. I would have loved to have been alerted (better yet at home with my finger on the 'trade trigger') when it was under $8. I would have probably covered the same 100 shares I've been profiting on while MAXY decides when she'll crack- but alas, in light of Sir Tim's 'transparency' post, who knows what I would have done. That's all 'woulda, should, coulda' talkin'. I do know this- I've placed a GTC (Good Til Cancelled) order on Think or Swim to cover (buy) 100 shares with a limit price of $7.90 (just in case it breaks $8 again in the near future and I'm not able to witness it).

I'm still completely at ease with my outlook and forecast for MAXY, I'm just wishing I could have ridden the 100 shares for another round. I need to seriously start thinking about buying an iPhone so I can use the Think or Swim application ThinkPod on my lunch breaks.
Charlie G. alerted me to this (potentially $200) idea. I guess surrendering to Apple is inevitable, like MAXY's test of $8 this morning. Scowl.

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

Mission Accomplished: HSNI

I've completely closed my HSNI short by covering the last 50 shares at $4.84. Below is a screenshot from Think or Swim showing the exact time of my fill, as well as the total P/L (profit/loss) for HSNI and running P/L for my short-in-progress MAXY.

I have to say, this stock couldn't have reacted more perfectly. Here is the progression from rise to fall (feel free to click here to follow along with the 3 month, Yahoo! chart):


1. Stock had dropped to $1.50ish in early Dec. (just a bit over a month ago)
2. After breaking out of numerous resistance ceiling's (mostly around the $4 range), volume spikes (and no doubt some short-covering) helped to push this over $6 (enter my initial short), then $7.
3. Volume began to fade along with the stock price.


This one really was that simple. I documented my thoughts all along the way with this blog, even saying that I would cover in the upper $4s. I was surprised it happened as quickly as it did, but said all along it was inevitable. After commissions ($45) my total profit for HSNI was $403.52. Not bad for two weeks and what I'd call a no-brainer play. Below is an example of a 5-day chart any short loves to see.

Thus concludes my celebrating. I'm out to find the next short (Thanks to TIM for finding HSNI) while waiting for MAXY to fall. I'd love to hear any thoughts, critiques, and/or questions on this trade.



Thrilled at my strategy's first big confirmation,



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

Patience Pays!

At this early stage of my blog, I'm not sure how many people are actually following my trades, but my potential profits are climbing even as I type (10:55 am EST 1/7/09). If the page views have been affected by you (and not just me making sure I posted something correctly), then you may know I'm short HSNI and MAXY.

I haven't posted since revealing my short positions because I haven't made any trades...until this morning. In the future I'll try to do better at mentioning my day-to-day thought process while watching the volatility in the stocks I short. For now, just know that my strategy (short stocks that have run too far too fast, had their first down day, and wait until the position is profitable to cover) is holding strong. Watching HSNI continue it's uptrend after the first down day (12/24/28) of it's initial run hasn't been what I'd call pleasant- but patience is the key. Below is a 5 day, Think or Swim chart of HSNI I took a screen shot of this morning. Notice that I covered 150 shares at 9:45 this morning (a profitable trade from my 150 share short at 7.20). I still have the original 250 short that I'll look to cover for a profit at a later date (unless of course it completely tanks this afternoon).


My reason for covering 150 of my 400 shares was fairly simple- I had a profit from those shares, the stock opened in near free fall once the volume picked up, and it hesitated around 6.73 longer than I was comfortable with. Covering 150 shares gives me two options: Re-short the 150 if HSNI retests it's 7.50ish high and fails, or cover the remaining 250 at a lower price should it continue to fall (as I'm typing, it has recovered to 6.84- the time is 11:18am EST). Looking at the above chart, you may be wondering why I wouldn't cover the whole amount somewhere in the $6 range. If that chart representedw more than just a few days, I'd agree with you (though I wouldn't have shorted after such a small run). If you take a look at the 20 Day chart below, you'll see that HSNI has quite a way to go before retesting any yearly lows.


I'll wait to post any charts of MAXY until it shows major signs of weakness. When it eventually breaks through the mammoth $8 support, things should get both interesting and profit forming. For now, it's creating new highs (though none to write home about).

Please feel free to comment and ask any questions (about the charts, strategy, missions, etc.). I'll be posting about future mission trips and projects as they emerge. I'm seriously thinking about taking a team to the Amazon and partnering with this ministry in the summer of '10. It would be great to profit enough from trading to fund that trip (costs about $3000 for two weeks, including everything from flights to bug repellent).

Patient Trading,

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.