9/20/2014

Always think process flow



Everytime you see someone twitting a stock idea, ignore the idea, try and find out what process this person uses to find that stock.

Every Time you visit a blog of someone you think is good trader find out what process this person uses to find that stock.

Every time you read a book on trading find out what process this person uses to find that stock.

Every time you attend a trading seminar or workshop ind out what process this person uses to find that stock.

The process understanding is very important. If we do that we should be able to find same stock and trade it in same way.

Don't get fascinated by picks ask the person

"Brother or sister can you tell me what step by step process you use to find these things. What scans did you use. where did you enter why, where did you exit or plan to exit, how much did you buy"

and if he or she can not tell you that it is difficult to make money from those ideas.

9/19/2014

Eliminate Processes and methods


There is a diner next to my house, it has menu which runs in to 10 pages with around 10 items on each page. That is like 100 items.

Think about it . 100 items require 100*5= 500 ingredients or more. Plus you need people to know 100 processes.

As against that if you see food trucks , they have 2 to 5 or in some cases just 1 item on menu.

Be like food truck and not a diner.

Trade as few methods as possible.

Just because you know 100 methods do not trade 100 methods.

Learn from them and incorporate some learning in your method. but do not start trading too many methods.

Less processes you run easier it is

Less is more when it comes to trading.

Just trade 1 to 3 methods.

Do not clutter your mind

Start with process flow if want to improve your trading


Start with process flow if want to improve your trading

However imperfect it is start first by setting up a process flow for trading any setup you like.

If you like momentum bursts setup process flow

If you like anticipation setup process flow

If you like trading news set up process flow

If you like CANSLIM setup process flow to find and buy IBd kind stocks

If you like beaten down stock setup process flow to identify and buy them

If you like EP setup process flow to trade them

If you like to buy near 52 week high setup process flow to

If you like to trade earnings setup process flow

If you like to trade stocks that go up 300% in a year setup process flow to find and buy them

If you like Lemonade strategy set up process flow to trade it

If you like to trade others picks setup a process flow to find and trade them

If you like to trade IPO setup process flow to find and trade them

If you want to trade options setup process flow to find and trade them.

If you like to trade stocks that start with A setup process flow to find them

If you like to trade stocks that start with Z setup a process flow to find them

Unless you have a process no miracle can make you good trader or investor.

Once you have process you can start to improve it

Once you have process you can do things in less time

However imperfect your process , it is the first starting point to becoming profitable trader.

In the beginning run only one or two processes. Your brain will not be able to handle many processes simultaneously. So be less ambitious .

First question you should always ask is what is the process to do this. You read a trading book , fine but unless you have a process to convert that books trading idea nothing will happen.

Stop dreaming about the money you will make trading. Unless you have a process nothing happens. Once you have process you start finding trades. Once you have a process you follow it to enter those stock. Once you have process you know when to exit them or put stop.

As you trade more a process you will find simpler ways to do same thing. Once you have one good process for swing trading going well then you can add more processes.

When developing processes think simple. Simpler a process and less the steps involved in it easier it is to perform. If your process involves 10 steps something is wrong with it.

If you see this site it is all about processes flows. And most likely first question you will encounter from Stockbee members is what is your process flow to find these stocks or options. You will see members have done process innovation around simple setups.

Learn to be process focused and money will come. the person who made 96 million trading Episodic Pivot has simple process flow. when he started to explain it , members were like there must be something more to it. But all he does day in day out is follow simple few steps process flow. Good trading is like that.

Once I found process flow I became profitable. Before that I used to go crazy working till 2AM in morning to find stocks. Now same task takes less than half an hour.

Once I became process oriented things began to happen. I found process flow to find big earnings surprises and tripled my account in few months.

Become process oriented if you want to make money trading . Start today.

And there is no other better place than the Stockbee Member site to learn to do it. everything is about process orientation here.

You will find process to find momentum burst.

You will find process to find Episodic Pivots 

You will find process to find stocks that Doubled (Double trouble) 

You will find process to find stocks that have been cut in half (Half trouble) 

You will find process to use news to find day trades (Night time is right Time) 

You will find process to use to use Investors Business Daily to find good growth stocks 

You will find process to determine entry , exit , stops, position size. 

You will find the process flow of the trader who made 96 million trading Episodic Pivots 

You will find process flow to fully automate trading 

You will find process flow to take 100k to 160k in month in the ongoing Options Quest being traded real time by @cammotrader 

You will find process flow to find big winners and play golf courtesy @ckergin 

You will find process flow shared by hundreds of members 

You will find processes to fit working people

Even if you are not a member , you will find simple processes shared on this site daily.  Read the posts highlighted in sidebar they have many of my process flows.



Methods (processes ) trump markets is the motto of this site and that is the key to success in trading and beating the market.

Become process oriented today.....

That is if you want to make serious money trading .....

9/18/2014

Stocks move in momentum bursts






Even if you eat green eggs and ham for breakfast stocks will still move in momentum bursts.

This is the most basic tendency of stocks moves.

It existed hundred year ago and it still exists in spite of chorus of market having changed.

Stocks when they move they move in burst moves.

And all such burst start with range expansion.

Stocks move in momentum bursts of 3 to 5 days

Stocks move in momentum bursts of 8 to 40%

Try studying this phenomenon and you may like it.....

Try it . try it....

Finding breakout anticipation candidate

Stocks move in sharp momentum bursts of 3 to 5 days. During that 3 to 5 day burst move they can go up 8 to 40%.

One way to trade these kinds of momentum bursts is to anticipate zones from which a likely momentum bust will occur. Or in other word look for a continuation setup.

Advantage of anticipation is you can get a very close entry on breakout . You can also create a predetermined buy order above the  consolidation area and enter.

JMBA , ACM , and TDG are three example of this kind of setups.




If you study these 3 setup , they all have common character. For last 8 to 20 days these stocks are not in momentum burst phase. They are in non momentum phase on smaller time frame. The volatility during the consolidation is low as these stocks have traded in very tight range.  Yesterday they had very small move up or down of less than .5%.

Stocks often breakout or breakdown from these kind of zones with burst moves and make big 3 to 5 days moves. In a year you can find and trade hundreds of setups like these.

Anticipation Setups watchlist

XRS
MNST
RGS
DAKT
JMBA
BTX
MFRM
GCAP
HZO
UTIW
WSBF
MPAA
ACM
NWL
AMED
OVTI
ENH
CRI
ROST
PVH
BG
IMS
MELI
TDG

In order to generate above list I or Stockbee members go through around 300 stocks that have established trend. The 300 stocks are scanned for up or down move of less than 1%. That is the starting point for finding good anticipation candidates. From that 300 stocks list final 5 to 20 candidates are selected using guidelines I have developed for this setup.

Once the list is ready you can further narrow it down with other criteria like earnings, Zacks rank, valuation, sector , age of trend , float , price , capitalisation, short interest and so on. It might give you a small universe to focus on. But stocks need not have any reason for these kind of moves so just looking at quality of setup is enough.

Once the list is ready I start putting alerts on these stocks. I feed the list in my trading platform and set alert levels at which  a breakout move is likely to trigger. If the alert goes of then I buy the stock if capital is available.

In order to daily find stocks like these you need to setup everything. It takes me and members around 15 minutes daily to do this. once you get a hang of it you can scroll through charts rapidly and find the good setup very fast.

If you are really serious about making money trading you can do this yourself. If you are really serious about making money trading you can study hundreds of past moves to find what to look for in good anticipation setup. If you are really serious about making money you will figure out how to scan for these kind of stocks. If you are really serious about making money trading you will find many variations of this setup.

9/17/2014

Where should you put a stop

Stops are setup specific . 

There is no one universal stop strategy that works. Stop s just one element of your trading system. Unless all elements of trading system are in sync random stop strategy like put stop at 8% or 10% below your entry is not going to work. Plus it is a dangerous advice to give someone if you do not know the setup.

If you are going to be swing trading say momentum bursts , your stop strategy should be in line with that setup idea and should be as close to start of momentum burst. If your setup is trend following your stop should also be at level where trend failure will be. 

If you are going to hold position for long term your stop strategy should reflect that. I have a long term position in XIV which is up 78% from entry and it has no stop. For position trading like that you can control risk by sizing of your position. 

If you are trading short term mean reversion not using stops is best. Again in those situations risk is managed using position sizing. 

Stops also depend on your own personality and returns objective. Some like wild swings in their account and can manage that emotionally. They can take their account up and down multiple times. They like the drama of it. Some like returns with very little drawdown. Their stop and setup strategy reflects that. 

Unless you think through specifics of your entire trading strategy and also your personality and ability to handle risk there is no one specific stop that works. Once you are clear about what your setup and goal is there are many creative ways to use stops.

Your stops strategy is no different than managing relationship in real life. There is no one way to satisfy your boyfriend or girlfriend or husband or wife in a relationship. It depends on kind of girlfriend /boyfriend/wife you have and also kind of  situation and it also depends on your own personality. Some like volatile relations , some like smooth drama free relationship. And also it depends on whether it is one night stand or long term relationship.

Same thing works for stocks.