February 10th, the death of the fake trade

OK, I've had enough of fake trading.

This morning I jotted down a fake trade early on for about an 11 cent gain...then decided I'd had enough of that game and just traded the rest of the calls. Now the morning was pretty flat so I was fighting for the trades but patient enough to wait them out. I was anticipating a nice drop in price over the course of the day and the setups were mostly to the downside. The rallies did not line up with any clean entries so I left them alone and only traded HGD, the bear fund.

I may have mentioned already that I like short sells and they were my favourite trades for a number of reasons...mainly the reasons why nobody seems to like them. They are fast and need a little attention to stay on top of to get nice exits at the bottom of the move. I found that trading HGD (Bear fund) based solely upon the movement of the HGU (Bull fund) was as close as I can get to actually short selling HGU. So other than watching HGD quotes to be sure there is enough volume to get a clean 400 share fill I really don't pay it much attention at all.

I did manage to wait for the 200sma crossover and get in one trade, even if it was not a very big move my concern is more being sure that my calls are correct and I don't suffer anything other than some small losses along the way. I was not able to stay and trade the rest of the afternoon, sadly, as I see now that most of the move I was waiting for happened well after that crossover. I managed to check in a few times up until 1400h and the price was forming that classic saucer shape that just begs for a short sell off of the lip at the end when the price crosses under the 30 sma (red on the chart).

Oh, with the new blog format I am able to post the full sized charts and they come out clearer...click on the image for the blowup and the prices and notes are legible.

The green circle is the area where I placed my fake trade, too congested to try to note with any clarity so I skipped it. Red is the saucer drop off and blue are the afternoon trades that were available and followed my entry criteria...the first two green arrows would have been orders placed in HGD and the last would have been long in HGU for the bounce...I was there for that one but was unable to place the trade...so I guess I just missed it.


This is HGD with the trades reasonably accurately mapped out. There is not much difference between these trades and fake trades under similar circumstances. With the use of market orders instead of limit orders I am seeing about 2 to 4 cents per trade less...but I am making every single trade that I decide I want whereas with limit orders I was only making about a third of them.

1013h Buy $8.76 Sell $8.90 Gain 14 cents ps Return 1.6%
1231h Buy $8.77 Sell $8.80 Gain 3 cents ps Return 0.3%
1309h Buy $8.78 Sell $8.81 Gain 3 cents ps Return 0.3%

$ 0.20 gain per share or 2.2% overall return on trades

I choked on the third trade as I actually bailed too soon. It was a "keys locked in car" moment. You know the one...you lock the car and just as the door clicks closed you realize where the keys are. I would rather have an early exit rather than some other boffo order mistake... I only missed out on a little over 10 cents more anyway, even that would have made my day though.

I obviously would have liked to have made even one of the afternoon trades. The other downside is that I only traded 300 shares for the first trade as I realized I forgot to bump my orders up to 400. The extra 100 shares on the second two at least pulled me up to breakeven as they are pretty small trades, at least no losses in there.

It felt good to be active at least...I would have even celebrated a loss today for the sake of being in the trades.

Jeff.