“History doesn’t repeat itself, but it does rhyme.”

- Mark Twain

Every day I use support and resistance lines to read trader sentiment.  Recognizing these is an essential trader skill.  It works in the short-term and the long-term and so is a necessary skill for investors as well.  This same skill is also applied when reviewing my trades.  There is no replacement.  It’s in my trading plan.

Constant and Persistent Review

When a trader reviews his trades he learns to remove the emotions that are flowing, and assuredly they are flowing, while he is trading.  This allows him to zero in on what he did right or wrong before, during, and after a trade has been made.  The review process allows the trader time to objectively incorporate the good things into his tool box and to discard the bad.  It allows for fine-tuning future trades for profit.

Without this process of review a stock trader might as well be gambling.  Consider the roulette wheel.  It is the one game in a casino that gives the gambler the best odds and yet the odds still favor the house.  There are many systems of playing “the wheel” that would help the gambler win more frequently but for all the effort that a gambler puts in, he will eventually still lose.  This is akin to learning to trade effectively and then never reviewing your trades.  Reviewing is a necessary skill if you want to put the odds into your favor.

Learning Times Two

Remember the last time you had to learn something new?  How did you do it?  Did you just naturally absorb everything that was thrown at you and never have to look at it again?  Some people are like that.  Computers are like that.  They are your competition.  Is this a problem?  Does this mean that we shouldn’t be trading or that we can’t win?  Well, it does if you don’t review.

If you are like me it takes constant and consistent review to be able to utilize this new-found knowledge.  Most of the time I don’t do it right the first time.  Most of the time I don’t ever do it right all the time.  Why?  Those things I do do right don’t stay right when the situation changes, which it always does eventually.  This my friends, is a truism that includes any chosen career.

I have a perfect example of this.  I’ve always been a science buff.  I was in advanced science classes from a very early age.  I remember when there wasn’t even  talk of black holes and now they are everywhere.  An example that is even closer to today is Pluto.  Remember when Pluto was a planet?  What is it now, a planetoid or a plutoid?

Pennies From Heaven

That fact is that we retail traders and investors are putting ourselves out on the front line every day and risking our own money just as a small business owner does every day their business is operational.  And just as  a business can’t be continuously profitable without planning and projections, neither can we.  It is important to count the pennies as well as the dollars.  One can not amass a fortune without knowing  what a fortune is.  Reviewing gives us time to do that.

“History doesn’t repeat itself, but it does rhyme.” – Copy to Clipboard
—  Mark Twain

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I hope you read Secrets the Stock Market Doesn’t Want You To Know. This is about secret #2.

Click to continue reading “Quote Stuffing, Sub-penny Pricing, Flash Crash, and Secret #2″

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Hangin’ In, Loading Up – 9/1/10

September 1, 2010

I never got rid of the my previously mentioned puts… They are not even near break-even now at $1.00. But indications are that I should repurchase them soon, just in case I did sell.

So what am I going to do? Buy more. Just a word of caution. Don’t do this. (Wish me luck)

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Free-falling Carbon-based Traders – Gotta Chuckle

September 1, 2010

SheepDog is referring to the computer trading that has been very successful today in bumping up the market.

Utter insanity! Im going to wear my helmet around the streets today in case of any free-falling carbon based traders.

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Quick Trading Update – 9/1/10

September 1, 2010

Just a real quick update on the puts I bought Monday.

I’m still in them. I had some problems with my trading platform and should have dumped them before now but I’m currently near break-even and my indicators are not saying that the Q’s are going to break above this level so I’m going to stay in them for a little while and see what develops.

Patrick

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Oh, shoot! and “Aaaragh!

August 31, 2010

I could have rebooted, checked my firewall, scanned for conflicts with the other software that was running, ran around yelling things like, “Oh, shoot!” and “Aaaragh!”. I could have and I did. And in the end…

Click to continue reading “Oh, shoot! and “Aaaragh!”

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Seven is a Lucky Number. September, Not So Much | China Choking?

August 31, 2010

Now we have to add Wall Street: Money Never Sleeps, previous stock market history, and those now famous words by our fearless leader, “We are heading in the right direction”, and what do we get? Suspense! That’s what!

Click to continue reading “Seven is a Lucky Number. September, Not So Much | China Choking?”

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Quick Update – 8/30/10

August 30, 2010

Here’s a quick update to today’s trading.  Just an FYI.

I started today by watching the futures, which were up greatly over the weekend.  When pre-market trading opened I was surprised to see that this was no longer the case.  Since not everyone gets the news at the same time I suspected that the market could go up before coming back down.  I watched using a 5-minute chart.  My technical indicators showed me the proper entry time and they will also point the time out, which hasn’t happened yet.  Below is the trade I entered.

587    08/30/10    10:14 AM    BTO        100918P45    QQQQ SEPT PUT 45    200    $1.42    ($28,400.00)    ($250.00)    ($28,650.00)                $294,477.50    14723.88%


Update:  3:10pm  I decided, against my general trade rules to keep this trade on until tomorrow morning.  Based on a daily chart my trade should be good until  the market opens tomorrow.  The put was worth $1.80 at the close which amounted to a 24%+ gain.

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