March 31st

Today was not a trading day for me, as the last week of so have been more in sidelines mode due to playing with new software. So rather than post about trades, even though I did enter a few, I will note some of the thoughts I had as the market progressed.

Keep in mind that this is still sort a blog for me that I have made public for those who might be interested in following along. No great prose or any real new market insights, just a passion that is developing to pursue trading seriously...eventually.

So, on to the juicy part...

Today's pre-market chatter:

My first plan, long with R1 as a target very early in the morning, was wrong for the open but proved itself out later in the day as the price reached R1 nicely at 1400h.

My second plan was to play short if I got stopped out initially and hold through a possible PP move to S1. Seeing as I anticipated an overall ranging day I was thinking about using the PP as a reversion target with possible R1 and S1 swings. Not to far off the mark.

Here is a two day minute chart for Global Gold

Note the price ranging about the same for both days. More or less what was expected for the day.

Here is a new chart for me, the cumulative tick chart for the TSX.

If I have this right the chart represents the number of stocks that close the period, 5 minute in this case, on an uptick minus the number that close on a down tick. The black line represents ZERO where all stocks are trading roughly even which would lead one to think that the market in general is not sure where it is going, the same number trading on up ticks as down ticks. The TSX swings into the low 200's in each direction whereas the NYSE ticks swing out to 800s and larger. That just shows the difference between the number of stocks in each exchange.

I found it interesting, in retrospect, that yesterday's tick was all below zero and today's was all above zero and the price ranges were the same. Like any other indicator I doubt that it means a whole if taken completely on it's own as this represents the market sentiment in general. Gold does not follow the market and often inversely follows it so it is tricky playing gold based on market trendds and news...so I just don't do it.

Anyway, that's the end for March.

Jeff.

March Madness continues...

I could not actually place any trades today...well I could have used the web based order entry but it is so cumbersome I would not want to use it for daytrading. I am waiting for my platform to be re-established under the Pro version. Little wrinkle there.

So in the interest of playing I did some fake trading to just try out a cute early morning strategy.

I figured today was going to be mostly range bound, at least for gold, so I tracked opposing trades in the Horizons BetaPro Global Gold ETFs, bull and bear.

I should mention that I have my RRSP account transferred and accessable so I am no longer restricted to a single trade at any given time...although I have to be a bit careful which trades I make in my TFSA I still want to concentrate on growing it first.

So entering the respective ETF trade based on resistance and support established off the start had me in three trades for some small gains overall. Probably not the best method but I was still playing.

The proper trades would have been in the financial market as that is where the strength was this morning. I entered BNS late as I waited for a nice convergence of SMAs and a pivot point and netted a decent 40 cent move. Ideally I would have been watching this earlier as I saw the strength early on due to now having a page with just my favourite indices and cumulative tick charts. I would have no qualms about entering a small position early based on the indications in the market.

I am going to like working with esignals.

All this boils down to me deciding, or realizing, that while my previous strategies would work, the real comfortable trading is based more on leading information rather than the price of the moment. I now have easy access to some decent information streams to put the information where I need it, when I need it. I will play with putting some of my new charts up, they may not be as pretty as the stockcharts but they are certainly more flexible and better for the live workings.

I am done for today and I have little to do for trading over the weekend other than a bit of reading so I will most likely be back on Monday for some real, and perhaps more serious, trading.

Jeff.

March Madness

That's what it feels like right now...madness.

I downloaded and signed up for a new charting service with a free 30 day trial. I also upgraded to the highest end trading platform that Questrade have, Questrader Elite. Elite and Pro I am sure are just canned platforms from somewhere else as they seem familiar from elsewhere.

So, on scales of 10 the Questrader Elite gets a whopping 0, yep ZERO. I could not find a manual for it anywhere but a lot of the features were in the Pro manual so I just checked it out there. I found it cumbersome and difficult and I could not find anywhere that let me place stop orders. I blew about $60 in commissions and small losses in order to figure out how it works. I ordered a downgrade back to Pro before lunch anyway.

Esignal on the other hand....


The charting package on trial on the other hand is great. I spent the last few days just concentrating on setting it up. I felt that it was important to get it looking good first, playing around with options second and perhaps trying some trading from it last.


I cannot trade directly using it so I still have to use Questrade's platform, which is no big deal. As long as I have either dual monitors or two computers it is good to go.


Functions that I wanted and found are:


- audible adjustable alerts, more than I care to try to list here
- lots of lines
- formulae for auto daily, weekly and monthly pivot point plotting
- formulae for custom applications or modifying existing ones (I already have two mods)
- multiple pages setup for particular purposes, custom as well
- templates for default charts for various purposes
- longer intraday data archiving
- easy chart replay
...and more


The downside are some of the fees that go along with it. $125 per month plus data fees of about $40 for what I need...or want. I think I will be fine with these as I am sure that the functionality with pay for itself over and over again. I had pretty much decided that I needed better data anyway and also that better then I had was not going to be free.


Fee justification.


How's this for justifying the extra fees:


Commissions for a month at 60 trades per = $297
ECN fees, guesstimate = $70
Charting package fee = $125
Data access fees approx = $40
Total monthly costs = $532


Given 60 trades that is $8.86 per trade rather than just the $4.95 from Questrade or if I consistently hit even my 1% average daily goal I have covered the entire costs in two weeks of trading. Later as 1% is a larger absolute gain it will be easier to swallow.

So, here's to getting serious as serious is needed when te costs go up.

Jeff.

March 16th, Return to the basics

Today I played with a return to stocks as opposed to ETFs, at least not ETFs exclusively. I have determined that ETFs are too restricting in the method that needs to be used to trade them intraday. The volume means little to nothing most times as traders scramble to place their best idea on the table while I attempt to take potshots at their offers and bids. The trouble arises in my information is not of the best quality or of the best speed so I am behind the ball when it comes to trying to really call the next move and make the trade.

Stocks, on the other hand, reveal more in their quote stream than does the chart, often. So combining a streaming quote and chart for a stock that is familiar, liquid and moving well enough gives almost all the information that one needs to make good on the fly decisions about placing trades based on ideas formed from the information at hand.

Yamana Resources Inc., YRI.TO.

This stock is one of the stocks held in the Global Gold Index so it is at least as familiar as gold is to me in general, it tracks reasonably well with GD, not as nice as Agnico-Eagle Mines (AEM) but at over $50 AEM is slightly out of reach if I plan on using stops for my trading in my TFSA.

In addition to trying a stock back on for size I decided to use minimum position sizing for each and every trade today. 100 shares. I have been tied down to staying in a trade and not being able to make any other trade at the same time. As much as I want to concentrate on a particular trade I do need to have the flexibility to enter additional positions on other issues, or even adding to the same one should an idea work out well. Seeing as I am trading related stocks and ETFs I figure this is not too great a stretch.

YRI today:

Not a bad trade. 20 cents per share. So only $20 for my single lot gross profits, but that is not specifically the point here. Getting good trades does not mean making loads of cash.

HGU:

I was not even going to do anything with the bull Global Gold ETF but it was setting up so sweet that I couldn't help myself, besides, I kind of wanted to do some simul-trading.

6 cents per share gained. It didn't run like it might have and I didn't exit as early as I could have, letting the stops work for me right now gives me the minimum gains for these small momentum moves...if I am breaking even the end will be catching the larger moves and then seeing profits. So I don't mind.

HGD:

This is my plan now, play the stocks for the up moves, perhaps play the bull ETF in conjunction with those moves and play the bear ETF for the downside...at least until I get going and have some cash to add to my margin account to do some real short selling, then I will probably give up the ETF altogether. I am not as impressed with them as I thought that I might be.

These two trades totaled 4 cents per share gain.

Seeing as everything was 100 shares I lost a bit due to commissions and small position sizing BUT the small sizing let me not have to consider, as much, the downside if I was wrong....Of course I would pick a marginal day (not a loser, just marginal) to drop my sizing.

Today's total are $30 gross, about -$12 net due to commissions and fees. Trading stocks between $8 and $11 @ 100 shares makes it hard to dig out from a $11 commission unless some decent moves are captured well. But that is all part of the game.

Now, had I been trading full positions, I would not have been able to trade HGU as I was in YRI so the totals would be like this:

YRI for 20 cents at 300shares = $60

HGD for 4 cents at 400 shares = $16

Commissions and fees = $36

Net gain = $40.

Considering the small moves today and not much trading to pick from I still would have been happy enough to have seen a small gain.

Jeff.

March, mid month review

This week's trading has me thinking over my trading strategy, kind of a mid month review...or even a post trading review for the last couple of months.

All in all I am down right now. That does not concern me in the least though. I am still testing the trading waters and getting more and more familiar with the market activity. I think that most people might be more concerned in my particular situation than I as there would be an expectation of having made money by this time. My only real concern is that I cannot add any more cash to my TFSA account due to the $5K annual contribution room so that will eventually restrict my trading power should I not turn profits...eventually.

I am waiting for my RRSP to be established in my trading account and I can do the exact same trading in that account so I am not terribly concerned about being restricted over the longer term.

What is a little disconcerting to me is the spiral of the ETF pricing right now. As the bear and bull funds' (Horizons BetaPro Global Gold, HGU and HGD) prices cross the crossover continue to get lower. The last time that I noted the crossing price was somewhere around $12.50. Last week it was about $10.20. Each successive crossing will continue to get lower as the nature of a leveraged ETF drives the valuation down.

This leads me to wonder what will happen to the ETFs as the price gets lower and lower, consolidation, re-valuation, closing of the funds, perhaps they will become a penny stock equivalent.

Recently I have noted the cost of ECN fees as I pay 37 cents per lot when I use a market order, generally. As the price gets lower my position sizing gets larger and my ECN fees climb. Right now with commissions and ECN fee for a round trip trade I am paying about $12. Still a good rate though so perhaps I should not be too concerned.

All this has me looking at stocks again. There are advantages to day trading stocks over ETFs as well. The volume and quotes of the stock mean more than those of an ETF as the ETF follows the valuation of the index it is tracking. The price stands on it's own as it is not dependant upon an index even though an index came be a nice correlating indicator. The disadvantage is that I cannot short inside my accounts of choice.

So, this is not so much a review as a bit of a rambling. Later today I will be going over all of my charts and trades to come up with a better more concrete set of guidelines for trade entries. I will still continue trading the ETFs at least until the end of March but I hope to have a more flexible entry and exit strategy. I am fixed in one mindset for a day and that usually is based on the previous day or two and whatever method I am considering at the open. That has been most of my downfall I believe. This past week was the week for playing with stops so I was looking for larger moves. Some of my entries were decently profitable had I been just exiting based on weaknesses, enough that I would at least have been up overall.

Jeff

March 13th, perhaps I should be superstitious?

I am not superstitious but I do recognize that superstitions do affect other peoples' decisions, even if unconsciously. Did that have a factor in my trading on Friday? Probably not.

S&P Global Gold index chart:

Not a pretty day for me. I took trades in the wrong direction and did not have the agility to reverse the trade to make any profit from the resulting moves. My one right direction entry was stopped out for the sake of a penny. I was too quick in moving my stop to try to get me 'into the money".

Friday trading bites me once again.

Jeff.