12/31/2009

Aim for orbital change in 2010


Making real progress in life or trading is like a orbit jumping process.



Making real progress in life or trading is like a orbit jumping process. 

Your task is to jump from lower orbit level to next higher orbit level in terms of success.
 Your task is to jump from lower orbit level to next higher orbit level in terms of understanding of markets, trading method, your own self efficacy belief, and your profit levels.

 Certain amount of energy and  effort is required to jump from one level to the next.
"Orbital changes" are changes which push you in to next level of orbit in terms of success or competency. 

These are very significant changes, requiring changing major set of beliefs and assumptions and freezing that new change and belief. 


When the shuttle is launched 80 to 90% or more of the fuel is spent in first few minutes

When the shuttle is launched 80 to 90% or more of the fuel is spent in the lift off stage in first few minutes.

Same way if you want to jump orbits, you need significant effort at beginning. 

Small progress is easy. Significant progress is difficult.

If you want dramatic change in your life or trading , you need to change your current set of beliefs, assumptions and world view dramatically.

That is what most people at beginning of new year want to do , so they make resolution. 

Resolution is intention, but to achieve the intention something inside your mind has to change. 

If you want orbital change in your life then not just one or 10 things need to change but 1000's of things need to change.  


"Orbital changes" require change in  your mental models
   
Mental models are deeply held mental images, beliefs, and assumptions. 

The mental models play a very important role in dealing with world around us. 

We interpret the world according to our mental models. 

Mental models are coping mechanism for the complexity around us. So we simplify the world around us and form certain beliefs and assumptions about the world. 

This creates our own inner world. Our own interpretation of how the world works. 

That reality we create is based on "assumptions and beliefs", it is not necessarily based on logic or scientific fact. 


Two people with different mental models react and interpret same data and same situations differently. 

Mental models include what a person thinks is true but not necessarily what is actually true. 


All religions are based on mental models



The mental models are extremely easy to understand in the context of religion.

All religions basically manipulate the  mental model of followers (followers do not see it that way). 

Once you start "believing" in a religion, world get simplified, because you adopt a mental model. 

So hard core believers in any religion be it Christianity, Judaism, Islam, Buddhism, Hinduism,  Taoism or any other "ism"  hold many irrational beliefs. 

More than that their behavior flows from their mental model. 

That is why people do extreme things, kill and torture  people, punish themselves once they become believers. 

Religious leaders understand this very well and if you study religion very closely and the tools they use, you will see how the religious pyramid scheme is like Amway, designed to indoctrinate and reinforce everyday and every moment a certain mental model. 


Successful leaders also manipulate mental models

Leaders change followers mental models. 
Followers cannot do it on their own, that is why they follow a leader. 

The entire process involved in leadership is about changing followers mental model through communication. 

That is why you will broadly find two types of leaders, the ordinary leaders and the transformational leaders. 

Ordinary leaders are like marketers, they just study the existing mental models of followers and reinforce certain things in it, or talk about things that followers want to hear. They understand trying to change the mental models significantly is risky and will require tremendous effort. 

The transformational leaders do the difficult task of creating a entirely different mental model in their followers. They bring about radical change. They are real visionary. 

Because people are uncomfortable in making radical or "orbital change" , in most cases they choose safer leaders. 

While we aspire and hope  for transformational leadership, when it comes to actually choosing them, we don't want to go through the effort of changing our mental model , and we choose safe leaders. 

Politicians know this very well and so they calibrate their message very carefully to promise enough change but not radical change. 


You need to change your mental model

From a practical perspective, on individual level, if you want to change your life, you need to change your mental models. 

If you want dramatic change in your life, you need to change your current set of beliefs, assumptions and world view dramatically. 

That is what most people at beginning of new year want to do , so they make resolution . 

Resolution is intention, but to achieve the intention not just one or 10 things need to change but 1000's of things need to change. 

But because our mental models are hard coded and we have built entire structure to reinforce them, change is difficult. 

Once the mental models get hard coded, it is difficult to change it. 

The reason for it is cognitive dissonance.



Cognitive dissonance is a psychological term describing the uncomfortable tension that may result from having two conflicting thoughts at the same time, or from engaging in behavior that conflicts with one's beliefs.
In simple terms, it can be the filtering of information that conflicts with what one already believes, in an effort to ignore that information and reinforce one's beliefs. In detailed terms, it is the perception of incompatibility between two cognitions, where "cognition" is defined as any element of knowledge, including attitudeemotionbelief, or behavior. The theory of cognitive dissonance states that contradicting cognitions serve as a driving force that compels the mind to acquire or invent new thoughts or beliefs, or to modify existing beliefs, so as to reduce the amount of dissonance (conflict) between cognitions. Experiments have attempted to quantify this hypothetical drive. Some of these have examined how beliefs often change to match behavior when beliefs and behavior are in conflict.
Social psychologist Leon Festinger first proposed the theory in 1957 after the publication of his book When Prophecy Fails, observing the counterintuitive belief persistence of members of a UFO doomsday cult and their increased proselytization after the leader's prophecy failed. The failed message of earth's destruction, purportedly sent by aliens to a woman in 1956, became a disconfirmed expectancy that increased dissonance between cognitions, thereby causing most members of the impromptu cult to lessen the dissonance by accepting a new prophecy: that the aliens had instead spared the planet for their sake.[1]
In popular usage, it can be associated with the tendency for people to resist information that they don't want to think about, because if they did it would create cognitive dissonance, and perhaps require them to act in ways that depart from their comfortable habits. They usually have at least partial awareness of the information, without having moved to full acceptance of it, and are thus in a state of denial about it.

Self directed orbital change is difficult

So any significant  personal change involves change in your mental model. 

It is difficult because we have invested so much in our existing mental models. 

If it is self directed change, it is even more difficult . 

If you understand this, you will find that most of the time "orbital change"  is precipitated by some extraneous event or major change in life situation. 

A divorce leads people to question long held beliefs and assumptions and then they make orbital changes to build better life afterward.

A death on near or dear one leads to change. 

A disease, surgery, treatment experience leads to change.  

Change in geographical location leads to change (especially true of small town people going in to large towns). 

You fall under the charm of extremely influential person, teacher, mentor or boss. 

You handle a very big assignment, which was beyond your capabilities. 

In trading this can happen if you blow up or make ton of money in a year.

Now these kind of things are accidental.


Self directed mental model change is the key

What you are interested is self directed change in mental models. 

If we want to do it as a self directed process , you need some sort of template. 

It is easier to accomplish some of these things in facilitated encounters. 

Successful people in all walks of life have the capacity to change and reinvent their mental models several times during their lifetime.

that is why they continuously keep moving in to  new orbits

Mediocre people in most walks of life get stuck with a mental model and spend their entire life in a orbit, never managing to climb to next orbit. 


Time to launch your trading career in to next orbit in 2010.

Happy new year everyone !




Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

28 stocks with momentum

Not many setups in momentum stocks currently as the market is overextended.
Some of the stocks I would be watching for possible hit and run swing trades are:


DAN :Dana Holdings


NANO: Nanometrics


APWR: A-Power Energy corporation



BEXP: Bringham Exploration
If you track momentum daily, you would find many opportunities. SEED and HPJ has been in the momentum list for many days now and they triggered a breakout yesterday.



Top Stocks by 6 month momentum

AHD
AMD
APWR
BEXP
CAAS
CENX
CSIQ
DAN
GPRE
HGSI
HPJ
IO
IOC
MIC
MRM
NANO
NEP
NLST
NTRI
NVMI
REXX
SANM
SEED
SMOD
SNIC
TSTC
UAUA
XTEX


12/30/2009

If you are new trader do this first



One of the first thing you need to have if you want to succeed in trading is right software and right broker. I would say first get the right software in place. 

You cannot learn trading unless you have a scanning software and also historical data. 

In learning stage you need to go through history and unless you have easy access to historical data you will not be able to  learn much.
When selecting a trading software look for something which is widely used by most traders. 

Often I come across new traders using some exotic and niche software not routinely used by traders. You are just complicating your learning phase by doing this. 

For a widely used software there are ton of resources to help you learn trading quickly. If you select some exotic niche software , good luck, you are on your own.
The most commonly used software amongst active traders are:

  1. Telechart
  2. Amibroker
  3. esignal
  4. Stockcharts
  5. Trade Ideas
  6. Trade Station
  7. Bloomberg
Telechart is the most commonly used software by most traders. And it is the best starting point for most new traders. Once you outgrow Telechart then you can think of other things. 

Amibroker is second best choice. You need a bit of programming knowledge to use Amibroker. 
It will take you few weeks to months to become very good at using any software. That is typical learning curve. You can pray for miracles, but unfortunately that is the reality. So set your expectations accordingly. 
Once you set up your software the next important thing to look at is which broker to use. 

If you are planning to be a swing trader or a trader that is going to do at least 20 to 25 trades in a year, look at your choice of broker. 

The number one broker used by most active traders I know of is  Interactive Brokers. There is a reason for that. It is the cheapest and most reliable broker around.

If you are using any of the broker typically used by retail traders like TD Ameritrade, Etrade, or Scottrade or Fidelity, you are paying too much and your execution slippage will be higher. 
If you want to trade profitably, these two things, software and brokers are the first thing to get in place.




Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.


12/29/2009

3 breakouts to focus on

Top 3 breakout



  1. ivan
  2. imax
  3. abfs

6 momentum stocks to watch

As market has been up 6 days in a row, many momentum stocks are overextended and some are at stage where they will likely correct.

So out of the top momentum stocks, I would be watching the following six for possible entry:

  1. hpj
  2. nlst
  3. xra
  4. seed
  5. dan
  6. apwr
One of the trades I took from the momentum universe yesterday was XTEX. It ended up giving up lot of intra day gains post entry. 


XTEX: Crosstex Energy



Top ranked momentum stocks:

AHD
AMD
APWR
ATHX
BEXP
CAAS
CENX
CSIQ
CSKI
DAN
EWBC
GCI
HGSI
HPJ
IO
IOC
MED
MIC
NANO
NEP
NLST
NTRI
NVMI
REXX
SANM
SEED
SHS
SMOD
SNIC
TSTC
UAUA
XRA
XTEX