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Category Archives: Technical Analysis

A topsy turvy day

Today was a bit unusual. We entered orders counter to our orginal plan. We went long on our shorts and shorts on our longs. By noon Mosk was fed up and feeling beside himself. I know he blogged about this. He gave us a speech before we broke for lunch. When you are having a bad day, simply just walk away. Before walking away, get out of your positions, by going flat or taking some share size off. This limits the amount of pain you will take. The next step is to get your strategy in order and know your risk tolerance. Do not try to make it  back on one trade! Make sure you stay small and feel good about your trade. Walk away from the day feeling okay.

After lunch we did not trade until around 3:00pm entering orders for overnight. Going into close we owned CLF. Needless to say we ended up positive.

A traders biggest down day usually comes after there biggest up days.

-Justin Valle

The breakout/pullback trade

On Monday we saw many names in our stock universe breakout, SNDK, CTXS, CREE, CLF, STLD to name a few. Many of these names hit our short levels and then we quickly got stopped out of the short.

Tuesday these same names all pulled back to levels of support, most notably the places we were stopped out from. This is an interesting trade to make where once the breakout has been established, I use my area where I was stopped out as my entry point. If I am choosing good levels than this trade should be a positive one and a trade that I am looking to take more shares than I got stopped out with.

Since this is a breakout trade I would expect to make a lot more on this as well, but I may have to look to the longer term charts to find my exit points.

Happy Trading!

Pre-Market Planning = Successful trading

Today, prior to market open, we went through the stocks that Mark trades. We matched the moving averages to the S4 S3 & R4 R3 Camarilla Pivots. We also discussed getting flat around noon, due to the mid-day reversal which he identified as an unsuccessful time for him to trade.  Following these plans we were able to identify stocks that were good shorts or longs as well as; book some nice profit before 12:30 came around.  Through out the course of the day we kept a close eye on the stock we identified levels and placed trades accordingly. Today turned out to be a successful P&L day for Day Trade Well. Due to proper planning, staying disciplined and executing the plan.

-Justin Valle

-Justin Valle

Time to short JPM?

JPM has been riding a nice bullish move lately, but it looks ready to break the upward trend line. News outlets today reported that documents pertaining to JPM’s possible blind eye to the Madoff scheme will become available to the public. The lawsuit settlement could cost JPM billions.

I’m excited about the Nintendo 3DS

I’m pretty nerdy when it comes to video games, and I’m really excited to own the Nintendo 3DS soon.  The Nintendo 3DS is the successor to the Nintendo DS with a faster processor, internal gyroscope and accelerometer, cameras, and most importantly a glasses free 3D screen among other features.

The original DS came out in November 2004. Back then, touch screen devices were rare and this gaming system was the first popular device to use it. Currently the DS has sold 144.8 million devices, making it the most popular hand held system ever. It’s easy to argue that the success of the DS and especially its touch screen showed other device makers like Apple that touch screen is a really good idea.

Now skip to the year 2011 and soon the 3DS will be out. If this system is as big a success as its predecessor, could this mean glasses free 3D devices will be as common a feature as touch screen? I think so. I believe that if the 3DS sells really well and proves that glasses free 3D screens is not just some gimmick as some video game commentators say, others like Apple will follow suit and create their own 3D devices. What do you think? Please comment on this blog and tell us your opinion.

death of conventional technical analysis

i began my interest in technical analysis in 1969,same year as woodstock. i think i actually took some books with me at that iconic concert. while a member of the Bear,Stearns arb dept. i could not keep my charts out on the desk.i actually had to cover my chart book with a playboy cover. thats how full circle things have come. there were only a handful of books and a couple of masters papers.now the books stores are full  of great books that give everything from indicators to patterns to how use ai software to build systems. i believe its this plethora of info that has created a major problem for conventional technical analysis. the volatility ,patterns and trend changes on a dime intraday,etc,etc. hopefully this  is the age of astrological market analysis. i suspect so.

My Trading Plan 1-24-11

Good Monday morning to you from a brutally cold Englewood, NJ. Not much fun waking up in 4 degree weather but it is what it is. My plan today is to employ a scalp strategy to my trading. I do not have a great thesis on which direction I believe the averages will trade in, so when I scalp I am making smaller proftis with less risk and more trading throughout the day.

I will have a live student coming in today so that will take a bit of my focus away from the trading from 11-2 but other than that there are no distractions and I anticipate having an excellent day trading. The nasdaq took a real pounding on Friday but we saw it more in stocks than in the index so I am interested to see how that resolves itself and DOW names continue to show relative strength.

Happy Trading!

Ugly day today in the market

GS earnings, AAPL earnings, CREE earnings all spelled some doom today for stocks as the markets had a weak day. The only index that held up was the DOW only down 12 points. Is this the beginning of a correction or a healthy pullback?

Right now healthy pullback as stocks have come into support most notably SNDK and GS so for now long sided trades are the right side. Caution may be the proper tone for now as the market for the first time in a while did not bail me out on my long trades.

Watch 1275 and 1269 on the S&P emini futures as support.

I am what I am

“I am what I am” a quote from perhaps the greatest philosopher of all time, Popeye. The quote is great because it is so simple yet so powerful, Popeye knows who he is and is comfortable with that. Is there any better way to go through life than that?

I say this because I have truly become a scalper an intraday trader, “I am what I am”. My “thesis” trades which are trades that are based upon a theory of how the market may trade in a particular day as of late have provided me with pain. It feels as though trades I am in for longer than an hour don’t work for me, “I am what I am”.

If I am successful at being a scalper, then why am I concerned with being a position trader and the answer really is that I am not, anymore. Stick to what you are most proficient and avoid what hurts the most. My plan going forward is to scalp throughout the day and then my thesis trades will be implemented in the last hour as a swing trade.

Identify who you are, and be that to the best of your ability. That is why I journal everyday, it tells me who I am and what I am best at doing.

Happy Trading!

Outside Bar (Bearish)

An outside Bar indicates a possible reversal from an uptrend to a downtrend.  This is a short-term move, typically less than ten bars.  (In this example it is day’s)  These patterns serve as clear entry and exit points for short term traders.


Outside Bars exhibit a trading range that fully encompasses the previous bar.  Outside bars are both bullish and bearish, higher highs and lower lows in an uptrend can signal a reversal.

Important Characteristics

-          The wider the second bar relative to the narrower trading range of the preceding bar, the stronger the signal.

-          The sharper the rally preceding the Outside Bar, the more significant the bar.

-          The more bars encompassed, the better the signal.

-          The greater the volume on the outside bar, the stronger the signal.

-          The nearer the price closes to the extreme point of the bar that is away from the direction of the previous trend, the better.  I

Example: If the previous trend is up and the price closes very near to the low of the Outside Bar, this is more favorable than if it closes near the high and vice versa.


Outside Bars are classic indicators of trend exhaustion and likely reversal of sentiment.    A high volume bar on the outside day helps confirm the reversal.

Example: HSN Inc (HSNI)