Archive for the ‘Trading’ Category

Two separate and independent events prompted me to write this. One was from a friend, E, upset about people telling her she’s lucky to have her new job. Another is from Mark Cuban’s blog post about with the same title as this post. I had just came across an episode of Shark Tank where Mark Cuban was on and another friend, W, highly recommended his blog so I added it to my RSS feed.

People tell me I am lucky all the time. I do feel fortunate and blessed to be doing what I do now at 27. Not a day goes by w/out me being thankful for what life has given me. However, I get the feeling that people tends to credit others’ success to luck b/c they don’t comprehend it. It reminded me of the closing scene of one of my favorite movies of all time: Rounders

If you have not seen this movie, Matt Damon plays a young poker player while going to law school at the same time. His girlfriend makes him quit because she doesn’t understand it. She thinks it’s gambling and well… luck. Speaking as another poker player myself, poker takes an incredible amount of discipline, training, focus, patience, and hard work. It’s actually pretty boring sometimes. You do a lot of folding, waiting for the right opportunity. This was also a common misconception when it comes to trading.

It makes me wonder sometimes, maybe people don’t understand what it takes to be rich. I am not the first to say this, but getting rich is incredibly boring (have you read Mark’s post yet? go read it!). You get there by hard work and saving. I see so many of my friends that clearly do not understand this concept. Believe it or not, I don’t even own a personal credit card(I only have one for business purchases). I hardly ever go out to eat or downtown to drink anymore. I’ve been on a minimalist purge lately and I literally looked at all my expenses and brutally slashed out everything I was not happy about. It’s not about being cheap. It’s about value for me and my opportunity cost is much much higher. People thinks I’m joking when I say this, but this is one of my favorite mantras now:

Jesus saves. So should you.

There’s a saying that “luck is when preparation meets opportunity,” it is so true. If you don’t save and not have the capital when buying opportunities presents themselves, especially during market downturns where there are tons of bargains, how can you take advantage of it? We don’t even have to talk about real estate or stocks, just think about even sales down at your favorite retailer. Assuming credit cards don’t exist, if they’re having their biggest sale ever known to mankind and you can’t take advantage of it if you don’t have the cash, it’s the same thing. If this double-dip recession thing does come true, I hope you’ve saved up some capital to get some real bargains. I hope you’re like me, camouflaged and patiently waiting. Waiting for that big game to come right into your gun sight and ready to pull the trigger.

I blame the media. People see other millionaires driving fancy cars and big houses on TV, soon enough you start believe that it happens all the time. What’s worst is you start believing that’s the norm and now comes the credit cards, car payments, mortgages. Real millionaires don’t live like that. Pick up The Millionaire Next Door at your local library/bookstore/Kindle if you haven’t read this book yet. People read about 100 stories about the success of Google and they start believing entrepreneurship or starting a business is easy. Yes, those are 100 stories, but they’re about ONE company.

It’s the same about travel and crime. One story about mugging and people are so quick to jump to conclusion about the overall safety of a country or city. I can’t even count how many times someone tells me backpacking is dangerous, so and so place has high crime rate. I backpacked around the world for ninety days. I didn’t die. I didn’t get mugged. I didn’t even get pick-pocketed despite not using my money belt (Looking back, I’m almost disappointed and offended… I was basically daring all the gypsies in Europe to come after me and they didn’t). I even went down to exactly where they were protesting in Bangkok on their one year anniversary and the whole safety issue is just totally blown out of proportion. How dangerous is a guy yelling into a bull horn, because that’s all that happened. The only danger you have is if you stand too close to him and it might damage your hearing.

The opposite is also true. Just because people don’t see it doesn’t mean it didn’t happen. Just because you don’t see me working doesn’t mean I’m not putting in 60, 80, 100 hrs a week working to make my dream come true. Just because you didn’t see it didn’t mean I’ve not been working out on the factory floor everyday after school since I can walk.

So the next time you want to say someone is lucky, think about this: are they lucky, or do they deserve everything they got?

Alright I’m off my High Horse brand soap box now.


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Day 2/3: In Transit

They have free internet kiosks at the airport in Taiwan where I’m connecting and I’ve got couple of hours to kill so I thought I jot down some notes here.

First of all, I’m glad I changed my flight from AUS to LAX to an earlier one.  Originally I only gave myself about an hour and a half between arrival and international departure because I didn’t want to waste tons of time at the airport. Upon further review, I thought it’s better to play it safe. In case any of you didn’t know, flights tend to delay more later in the day. Either bad weather or they just fall behind schedule b/c the flight crew is missing etc etc, flights later in the day has a higher chance of being delayed so plan your travel accordingly.

Now that I had a few hours to kill, at least I could go out of the airport and grab some In-N-Out burger.

How to do it: Have delicious In-N-Out burger at LAX.
Hop on the Parking Spot’s free shuttle to their Sepulveda location and In-N-Out is right next to it, after you’re done, just hop back on. (If anybody has convinced the shuttle driver to go into the drive through let me know! That’d be funny) Note though that you shouldn’t do it if you have less than 2 hours.  That location can get quite busy… it’s a total crap shoot.  Note #2: go to the Sepulveda location, not Century.  There’s two parking garages for Parking Spot.  Make sure you get on the right one.

I got my visa to Vietnam through a travel agent online and it’s one of those on arrival kind.  It was only like $20, and the stamping fee is another $25.  It just sounds too good to be true… so come back and see if I got hosed and gets stranded in the Hanoi airport.  I think it’ll work.  My other friends did it through a travel agent in the US and charged them at least $100, $120 just b/c you have to ship your passport and service fee, etc.  I think shipping certified or priority mail w/ USPS is about $18, $20 and both ways you’re talking about $40 range which is like the equivalent of maybe 50 bowls of pho.  I’m still a bit skeptical, but if it does work saving that money was definitely worth it.

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>Andy Kershner #2

>Finding your own style of trading and talk to coaches of that style and that person might be different from your original coach
Meet new people and see what works for them
Programmable keys
Don’t really use market keys
Reading the tape better: see which side the specialist is printing on, the bid or offer side
The more you trade, the more you’ll learn instead of stretching out your learning curve (including the keys)
The people that ask the most question and do the most work and join with teams always do a lot better
Psychologically stay positive.
Try to be more aggressive–scalp closer to the last print
Learn new things, try different trades, try it out in small shares what’s working for other people

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>Woot! Made money today. Let’s not get ahead of ourselves too much here. It’s only 5 bucks. Still, it’s good to end the losing streak.

BBY (11:02:26)
Entry price: short 44.47
Expected gain: 15-20 cents
Expected stop loss out: 5-7 cents
Actual stop loss/gain: gain 18 cents @ 44.29 (11:09:45)
Reason in: broke out of its resistance level for today and it reached it twice yesterday as well (actually, didn’t notice the last part until Lawrence told me), couldn’t really decide if I should go long or short but saw that open book had more offers so I picked my stop loss and decided to short it. Worked out well, adjusted my stops and everything through out the trade.

BAC (11:18:21)
Entry price: long 51.36
Expected gain: 12-15 cents
Expected stop loss out: 5 cents
Actual stop loss/gain: gain 6 cents @ 51.42 (11:21:51)
Reason in: establishing a base, sees many bids in the open book. at least 2-1, maybe 3-1 risk/reward ratio. Stock almost hit target, adjusted the sell lower stop to automatic sell @ 42 and it got hit on a small pull back.

WM (13:02:20)
Entry price: long 38.04
Expected gain: 20-30 cents
Expected stop loss out: 8 cents
Actual stop loss/gain: loss 10 cents @ 37.94 (13:03:40)
Reason in: Broke through the whole dollar, thought it would continue to go up and it did rapidly briefly which is why I got in at 04 instead of 02… reversed and got automatically stopped out.

DKS (14:06:48)
Entry price: short 59.94
Expected gain: 30 cents
Expected stop loss out: 6 cents
Actual stop loss/gain: gain 4 cents @ 59.90 (14:07:07)
Reason in: sense resistance at the whole dollar, risking little to trade back down, if it didn’t go my way I was going to reverse b/c I figured if it did break here it’d run a lot more the other direction. The stock quickly went down after I enter the position, took my profit when I noticed a big 1000 bid came in at 87 and thought it won’t fall as much as I wanted it to and got out. It did trade down to 61, near my target though… need to figure out why this was

TGT (15:32:28)
Entry price: short 59.95
Expected gain:
Expected stop loss:
Actual stop loss/gain:
Reason in: trading near resistance level and sees a lot of offers on the open book, same reasoning as the DKS trade. someone yanked the offer at 04 out and rose quickly. tried to get out and was only able to get out at 10.
Lawrence: when I see that offer gets yanked I would’ve just taken my two cent lost and get out. If that was the reason I get into the trade and when that offer is gone I no longer have any reason to stay in it.

BAC (15:39:54)
Entry price: short 51.37
Expected gain: 12 cents
Expected stop loss: 5 cents
Actual stop loss/gain: gain 6 cents
Reason in: Futures tanking, reverse trend, got in and when it doesn’t seem to break 30 and I knew that I chased this trade in a little bit I took my profit and got out.

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>Monday’s Trades

>KO (11:49:46)
Entry price: short 54.46
Expected gain: 14 cents @ 54.32
Expected stop loss out: 54.52
Actual stop loss/gain: gain 4 cents
Reason in: holding steady at resistance level, futures lowering, a lot more offers (big ones as well) than bids. Seeing a big offer at 54.50 makes me feel pretty good about it and after not moving for a long time I decided to take profit just so I can be on the positive for the day and really I know I should’ve stayed in it.

M (13:53:22)
Entry price: short 30.98
Expected gain: at least 18 cents @ 30.80
Expected stop loss out: 5 cents at 31.05
Actual stop loss/gain: loss 5 cents
Reason in: can’t seem to break through resistance level, sees lots of offers on the open book, futures trending down.

MO (15:00:25)
Entry price: long 67.29
Expected gain: at least 18 cents @ 30.80
Expected stop loss out: 7 cents at 67.22
Actual stop loss/gain: loss 7 cents
Reason in: trending up on higher volume, futures breaking out to new highs

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>Friday’s Mess

>LEH (9:43:24)
Entry price: long 59.72
Expected gain: 28 cents; to the whole dollar at 60
Expected stop loss out: .12
Actual stop loss/gain: loss 22 cents @ 59.5 (9:43:43)
Reason in: futures inching toward new high after a small pull back, thought it could be a full rally mode

MO (9:46:12)
Entry price: long 67.82
Expected gain: 30 to 60 cents
Expected stop loss out: I don’t remember exactly where I see the big bids at on the open book, but I think I gave it somewhere between 7 to 12 cents
Actual stop loss/gain: loss 25 cents @ 67.57 (9:47:15)
Reason in: after a sharp drop on low volume I believed it would go back up to its highs or at least somewhere between 1/3 to 1/2

BAC (10:06:21)
Entry price: long 51.32
Expected gain: 30-40 cents
Expected stop loss out: somewhere around 10 cents
Actual stop loss/gain: gain 14 cents @ 51.46 (10:10:01); I set a sell higher stop at 51.68 if I remember correctly, Billy said it triggered my sell lower stop on a bad print
Reason in: sharp drop at relatively low volume, thinking that people are taking profit from the early rally and the stock would go bounce back at least 1/3 to 1/2 from the low, possibly even make new highs, although I was chasing it a little bit here.

KSS (10:35:25)
Entry price: short 59.2
Expected gain: 20 cents to the whole dollar at 59, optimistically at 58.80
Expected stop loss out: 7 cents
Actual stop loss/gain: loss 11 cents @ 59.31 (10:35:56)
Reason in: Futures were at new lows, many other retailers are trending downward as well, felt after a bounce back this would be a good entry point

MO (10:43:17)
Entry price: short 67.04
Expected gain: 24 cents to 66.80
Expected stop loss out: 6 to 9 cents; I remember eyeing my outs at around 67.10 and 67.15
Actual stop loss/gain: loss 24 cents @ 67.28 (10:45:56)
Reason in: (need to look at BB Flashback) I thought I saw a lot of offers on the open book and it’ll fall through the whole dollar with futures setting new lows still. In retrospect this really was a terrible trade near the whole dollar. I chased it and either someone just put in a huge bid at, if I remember correctly, 66.98 after I am in the position or I didn’t see it before I get in and I hesitated when it hit my stop loss and exacerbated the loss.

XOM (10:50:20)
Entry price: short 82.61
Expected gain: ??
Expected stop loss out: Don’t remember exactly at all, but I do try to keep it to 7 to 10 cents
Actual stop loss/gain: loss 13 cents @ 62.74 (10:51:17)
Reason in: Saw all the oil stocks and OIH falling and decided to short. I think at this point I was pretty frazzled and wasn’t thinking clearly

HOT (11:05:02)
Entry price: long 54.61
Expected gain: 40 cents or 60 cents to the previous two levels of consolidation
Expected stop loss out: around 10 cents
Actual stop loss/gain: loss 31 cents @ 54.3 (11:08:07)
Reason in: Futures bounced back nicely, looked like the stock would pull back with it, thought it’s time to switch back into rally mode

BID (11:16:09)
Entry price: short 37.59
Expected gain: 60 cents, to the whole dollar, somewhere halfway between the day’s low and bounce back
Expected stop loss out: I think I was willing to take on a little more risk on this one about 12, 15 cents
Actual stop loss/gain: loss 27 cents @ 37.86 (11:17:49)
Reason in: Saw the previous volume was significantly higher and a fore coming reversal. Looking back maybe should’ve been more patience and pull the trigger and short it near the 38.10 level

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>David Lopez


  • Try to get better at what you know how to do and become more and more efficient
  • Monitor your downside
  • Look at briefing, gapping up/down, economic news
  • Review trades, look at the big winners and losers
  • Review big movers of the day, IBD
  • Learn your keystrokes
  • Narrow focus on your strategy: find something you know you can do and make money, keep doing it instead of trying tons of different strategies
  • Make incremental changes and branching off of what you do well
  • Watch top traders during the open, see how they react to different situations
  • Talk to top traders, take your career in your own hands and don’t expect to be spoon fed
  • Learning how to make money and be consistent at it and once you start making money you start making a lot of money
  • Don’t get caught up in comparing yourself to others, focusing on doing your best and beating your best
  • Confidence is key… when you’re hot put down on the gas pedals; slow down when you’re in a slump
  • Follow your discipline and your rules
  • Take a day off after a huge loss, clear your head
  • Have your outside life in order
  • Be in check with your emotions

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