ORCL 11/3

Today I'm going to give a quick rundown of my first trades in the stock market.  As of now, I'm still playing around with different ideas and strategies, but I figured I would jump right in and go from there.

I decided to trade Oracle today.  Its a name I'm somewhat familiar with, not too expensive, large cap, and liquid.  I like tech in general because its relevant to me.  Oracle has been stronger than the market since about mid August, although I didn't really recognize this until after my trades.  Below are daily charts of $ORCL (top) and the $SPY (bottom).

I started off looking at the one minute charts a little bit after 12 noon.  It looked to me that the SPYs might be stuck under the 125.30 level that had held resistance a number of times earlier in the morning.  Thinking it might fall back into the day's range, I shorted at 32.62 when it failed to break the falling trend line shown in the picture below.  My stop was at 32.72, and after shortly moving it my favor I was stopped out.  This should have tipped me off that both the market and $ORCL were stronger than I had expected.  Unfortunately it didn't and I tried to get short again near 1pm at 32.70.  This was a bad mistake, getting short a strong stock in a rather strong market (in addition, the SPYs had just made a new high).  Had I analyzed a longer timeframe I would have seen this.  @stevemcmannis let me know of my mistake and I was stopped out soon after.  $ORCL trended up all day, along with the market .

1 min ORCL (top) & SPY (bottom)

I learned that I need to be more aware of relative strength intraday.   I also need to think more about the time horizon for my trades.  My first trade moved for me immediately like I thought it would, but once the SPY's showed they weren't going to break down further I should have gotten out.  I'll be back at it tomorrow, following $ORCL and hopefully a few more.  Good luck, and have a great weekend.

Beating Markets Update and Changes

Hey all.  Its been a while since I've posted anything on here (been spread really thin with school, growing our university trading club, my own trading), but I'm making it a top priority to keep up with the blog from now on.  I recently spoke with another good young trader from Pitt named Jon Hewson (@Hew_Dat) who is going to be hopping on board and helping me run Beating Markets.  He is a forex swing trader and is also involved with equity options, so he'll be bringing a slightly different perspective to the blog.  

Also, my interest in the stock market has been increasing a lot lately, so I just opened up a demo account and will be trading equities.  Right now I plan to focus on swing trading while occasionally trading intraday with in-play stocks to see which method suits me best.  I've always followed the stock markets with my forex trading but I've never focused on individual names, and I'm excited to jump right in.  I plan on being as transparent as possible on Twitter and will hopefully be posting at least 1 or 2 trade reviews/videos a week on here.  

I'm pretty excited about these changes to the blog.  I'm expecting this blog to be much more active than it has been the past few months, and I think it will be great to discuss the stock market as well as forex in our posts.  Keep an eye out for new posts in the next week or two and good luck with your trading!

A Little Psychology...

Well, it’s been a while since my last post (been busy with repairing the shack I called home this past year, moving out, working on stuff for the Trading Pitt, etc.) but I decided now is a pretty good time to think about where our head needs to be at as traders, especially in markets that have been as wild as the ones the world’s been experiencing lately.

I’ve spent a good chunk of today reading Andrew Menaker’s blog (which can be found at http://www.andrewmenaker.com/ideas/blog/), and he always offers great self-evaluation ideas and food for thought.  One of his latest post talks about the need to be right.  This need is kryptonite to a trader.  The feeling of being correct is almost like a high for some people, and they constantly need to feel it.  Problem is, most of the best traders aren’t even correct half the time.  So to be successful, it’s absolutely essential we can deal with being wrong and don’t let our predictions dictate whether or not we are profitable.

Think about everything that’s been going on in the markets lately.  The nauseating roller coaster we’ve been on has opened the door for everybody to provide their opinion on what will happen next.  Many have been wrong, some have been right, some haven’t had a clue what’s been going on.  This is exactly the type of situation where we all need to be flexible as traders.  Use of if/then statements is absolutely key.  Sure, you always want to do a thorough analysis that provides you with a good idea of where the market might go but you need to have a Plan B if it doesn't go as planned.  As Menaker says, there is "a subtle but critical difference between anticipation and prediction." Traders who anticipated moves but ultimately took what the market gave them profited during the past two weeks; traders who made unwavering predictions got sauced.

Another great little post from Menaker's blog talked about trading the market or your P/L.  Its been said a million times but tons of traders, especially beginners, still struggle with it.  We CANNOT trade worrying about how much money you make or lose.  I'm still working on this concept myself.  I can't tell you why, but most of us (especially beginners) trade differently when we know we've lost money or are losing money.  The best way I've learned to deal with this is to completely remove your P/L from the screen.  Obviously, we still need to respect daily stop out and tolerance limits, but hiding your P/L allows you to concentrate more on price action and objectively make and manage our trades.   Try it if you don't believe me, I can guarantee that you will feel a lot more relaxed and confident when your not worried about your account.  

School will be starting up for me in about two weeks, so I'll be back to trading live during the days.  I hope to start doing a chart of the day and posting video reviews of my trades as often as possible.  I hope everyone has a great, relaxing weekend!