Running an Import/Export Business vs. (Day) Trading

I have recently learned that someone close to me is having financial trouble due to the slowing economy. That was what I was first told. I soon found out that this person, whom I shall name Rick, is more than just having a difficult time with his business. Rick is actually have a major issue financially!

(I'm trying to avoid a long drag-out post with too many paragraphs here, so I'll just highlight the situation and my thoughts.)

• Rick runs an Import/Export business with his wife. It's been a 2-persons operations for the past 20-30 years or so.
• Business hasn't been good in the past few years.
• He re-financed his home, and took out home equity to keep his business afloat.
• To make things worse, there were a few business deals where clients took the product without ever paying. He had to pay the manufactuerer himself!
• Now bills are piling up, and there's no income whatsoever. The bank wants him to pay up the mortgage but his home doesn't even worth what it was mortgaged for.

That's the highlights in 5 bullet points. I'm sure you all get the picture.

After learning what is happening to Rick, I thought to myself...

• Mom & Pop Businesses like Rick's are a dime a dozen.
• Business/Financial situation like Rick's is NOT unheard of either. My Father went through similar situation too!
• Yet, when you tell someone that you "run/own your own business", the general perception is (I'm generalized without prove here) that you are successful, talented, and maybe even admirable. But very seldom a gambler or a risk taker.
• But try telling someone that you are a Daytrader! (You all know where I'm going from here.)

Another thought is...

• I think I have read 10 or so books in Stock Trading so far, plus all those blogs.
• I have already read/learned/reminded that never re-finance your home for cash to stock-trade.
• Yet, using your home to as a lien to run your Mom and Pop business is fairly common, and perceived to be acceptable.

In Rick's situation...

• Could it be a lack of education? But hey, he's been doing this for the past 20-30 years, it worked!
• Which led me to my next thought... do MBA schools teach/tell you NOT to re-finance your home to run your business? I highly doubt it.

Stop-loss...

• With Stock-trading, I can set a stop-loss to limit my loss
• In Rick's situation, there were deals that he had to take at a complete loss! Where's the stop-loss for those deals? (Yes, I'm sure there are ways that he could have done to protect himself.)

So...

• Why is stock tading (for a living, I shall say) is viewed by so many as gambling, but not 'running a business'?

PS. My son just turned 6 months old. I'm beginning to get some more sleep. I'm preparing to 'come-back' (more like re-starting from scratch now) soon. I still have a large project involved at work, resulting in plenty of 'meeting room' time during trade hours. I shall return as soon as this project dies down. I can't wait!

Thanks to those who still kept me in their Blogroll! I'm still here! And... I'll be back... soon!

Mid-Air Restaurant

I was told that this restaurant is in Belgium. It serves breakfast, lunch, and dinner. It has 22 seats, and it is lifted to 50 meters above ground.

So what if I need to use the restroom in the middle of meal?

A Meeting with My Sponsor

My blog posting has been slow in the past few months partly due to my newborn son and my hectic work/travel schedule.  And it's a direct indication of how often I've been practicing my trades.  All this lack of activity has prompted a call from my sponsor.  Not only he wants to find out what is going on with my 'practice' and his money, he also wants to take this opportunity to meet my son for the first time. 

It turns out that since the winnings, my sponsor has been doing a lot of exciting things.  Focusing mostly on investments of various kinds, my sponsor has been keeping himself very busy. 

He's been reading my blog, of course, and he noticed that my postings have died down in the recent weeks.  He just wanted some face time with me to make sure that everything is okay.  I prepared some spreadsheets of both my (his) real money transactions (which I haven't touched it since switching over to Paper Trading), and my paper trade transactions.  He didn't look at my Paper Trade spreadsheet, but just briefly looked at the bottom line of the real-money account. 

By spending so much effort with paper trading, I think I have shown him that he can trust me with his money.  And that I only want the best out of his trust.  He assured me that he's not taking the money away because he doesn't need it at the moment.  He also confirmed that I can continue with his investment.  Even though it's more like a lack of investment.

Our conversation about his money and my trading was short.  He spent most of the time playing my baby. 

To my Readers and my Sponsor, I want you to know that I have not given up my goal yet.  Life has been unusual for me in the past few months, mostly because of my newborn.  I've been spending a lot of time with my son... that I can't even get to work on-time, let alone trading.  And when I'm at work, I'm dealing with a few major projects that require me attend many conference call and meetings. 

I will continue to attempt paper trading in the next few weeks/months.  Yes, my trading/posting will be light.  But this 'show' must go on!  I still have too much faith and interest in it. 

And to all my Readers, thank you for continually visiting my blog, even when there were no new posting.  And to those who still haven't dropped me from your RSS reader, thank you too! 

Rest assure, I'm still around.  I'm still reading all the other trading blogs.  And I won't give-up/leave without saying goodbye to you all.  So until you see/read my farewell post here, my mission is still on!

2 New Trading Blogs

Well, new to me.  I am not sure how long have they been blogging, but I have just discovered them in the past few days.  

TraderAM, and DaytradingPRD

By the way, PRD stands for Positive Range Divergence. Just in case you don't know.
(What do you think? Of course I didn't know either!! PRD Trader told me!)

Good Trading!

Lay Low until March!

I'm back in town but I have way too many morning meetings lined up this week. I have another business trip during the week of 2/25. Therefore, I don't think I will have time to trade until March.

I miss trading!

020808 - MFE - 15mins - Loss*Paper

Symbol: MFE
Type: Long
Result: Lost -1R

• The market hasn't closed yet, but I want to make this post now since I have tons of meetings this afternoon
• MFE gapped up this morning with a long Upper Shadow
• It tested the Opening Range High later in the morning but retraced
• I thought it found Support from the rising 5eMA, with an Inside+NR7 combo
• I entered Long during the 11:30 candle when prices broke the Opening Range High
• It retraced beyond my Protective Stop about an hour later
• An 1R lost
  
  

020708 - AKAM - 10mins - Gain*Paper

Symbol: AKAM

Type: Long

Result: Gained +1.52R

• Ooooouuuccchh!
• This hurts! Why? Read on...
• AKAM gapped up today but the first bar painted a long upper tail
• I gave up on AKAM in the beginning, but I couldn't spot any other decent setups, and when I reviewed AKAM again, the 7th bar, Inside, caught my attention
• I thought about entering Long, but chose not to because the 5eMA was just too far away
• The next 2 bars went all the way up to the 119% Fib., and I thought I just missed this one
• But prices came back down and since I still couldn't find anything decent to pay attention to, I turned my focus on AKAM
• When the 11:50 bar painted an Inside-NR7 combo, I decided to set a Stop Entry 2 ticks above the opening high
• I wasn't too confident in this trade because of the previous Resistance at the 119% Fib.
• But my entry was filled soon after, and the prices basically moved sideway in narrow range
• By 1300hrs, the prices started to rise!
• I wanted to exit half of my position when the prices reached the 119% Fib., but I accidentally exited my entire position! (This is where the 'ouch' came from!)
• As you can see, the prices continued to rise to reach my secondary target!
• It hurts! But hey, I didn't lose money, so I'm still happy!
  
  

020508 - UAUA - 15mins - Loss*Paper

Symbol: UAUA
Type: Short
Result: Lost -0.5R

• Ouch, ouch, ouch! What was I thinking? Why did I chickened-out before my Protective Stop?
• UAUA gapped down, my guess is, probably because of that stupid extra luggage fee
• Prices retraced and filled the gap... painted an almost Shooting-star at 10:30
• I entered Short when the prices break the low of the Shooting Star, during the 11am bar, with my target set to the Opening Range Low
• The 11:15 bar looked promising in the beginning, but formed a strong hammer, and closed above the 5ema
• I didn't know what/how to analyze the hammer... and the next thing I saw was a doji, which supposed to mean uncertainty
• Well, the only uncertainty was in my own mind!
• I thought I better cut my loss and exited my entire position during the 11:45 bar
• Well, my target was reached towards the end of the trading day
• Although I might have exited my entire position during that strong pull-backi during the 13:45 bar
• But still, at that point, I would still ended up with a gain, rather than a -0.5R loss
• I hope my readers had some better trades! Feel free to share!
  

020108 - ALTR - 10mins - Gain*Paper

Symbol: ALTR
Type: Long
Result: Gained +1.85R

• Picked up ALTR from Briefing/Jamie's Gapped-up list
• Prices formed a Cup-and-Handle formation, with the 10:50 bar closed strongly above Opening Range High
• The next bar (11:00) painted an Inside+NR7+Hammer(almost) combo
• The only thing that I didn't like about that combo is that it is a red bar, instead of a blue bar
• I decided to enter Long when prices break the high of the combo bar, with the bottom of the combo bar acted as my Protective Stop
• Upon entry, prices immediately shot up, but pulled back
• I didn't adjust my Stop and as long as the prices do not close under the Opening Range High, I was going to hang-in there!
• My patience paid off! At 1pm, there was surge in volume after another Inside+NR7 combo bar
• The prices went pass the 119% Fib. Level easily
• It painted a Shooting Star at 2:40pm, right at the Pivot Point / Resistance Level (see second chart.)
• I exited half of my position once the Shooting Star was completedly formed
• I moved my Stop to just underneath the flattening 5eMA
• My Stop was triggered 2 bars later
• My first winning trade of the year! I'm happy! Something positive going into the weekend!

Feel free to share your trades!

Cheers and Good Trades!

013108 - CNQR - 15mins - Observation

Symbol: CNQR

• Here is another trade that I would have taken had I been watching it unfold
• CNQR gapped up during opening, painted a very strong bar
• It followed by 2 consecutive Inside Bars. A weak bar followed by a stronger bar
• The 4th bar was a Hammer-wanna-be. The Upper Shadow was actually too long to be considered a Hammer
• And looking at it again now, I also noticed that the 4th bar also failed to closed above the Opening High. Something that I missed during real-time.
• But at that moment, had I been watching it unfold in real-time, my entry would have been the 4th bar, when it crossed the Opening High
• I would have Stopped Out by the 8th bar, and the prices did seem to have gain enough strength to go any further

013108 - HRS - 15mins - Observatoin

Symbol: HRS

• It was already more than an hour into trading before I came across HRS


• It was clear to me that a resistance level has formed slight above the Opening Range High


• A review of the Daily chart shows that a Pivot Point / Resistance level has formed (at the yellow line on both charts.)


• I set a Price Alert a tick below the yellow line, thinking that I would enter Long when prices cross the Pivot Point


• I don't know why, but I missed the Alert when it happened!


• When I've found out the prices have crossed the line, it was already in the red bar coming back down


• I seriously thought about entering Long, but decided against it


• The thing is, had I been watching the market more closely, I knew I would have entered this trade, which would result in another losing trade


• I'm still debating if I should record this trade into my spreadsheet as if I really did executed this trade. Because I knew I would, had I was watching it as it happened


• HRS is now also on my Watch List. Let's see how it works out tomorrow

013108 - JBHT - 15mins - Observation

Symbol: JBHT

• Remember my failed trade from yesterday on JBHT?
• For what reasons? I don't know! But I decided to revisit JBHT, not for potential trades, but to just see if there were any opportunities
• The first chart shows how JBHT performed today, along with notation of my entry and exit from yesterday
• As you can see, JBHT totally surpassed yesterday's performance and moved on to (almost) reaching my yesterday's target of 138% Fib (from day-before/yesterday)
• The second chart is a Daily Chart (kind of) showing why JBHT resisted at where it resisted today. Sort of like a Pivot Point.
• In fact, today's performance on the Daily Chart painted a very nice Bullish Engulfing bar. A very strong bull signal, if confirmed its run tomorrow.
• I have added JBHT to the watchlist that I have just started building. (Something that I want to start doing for 2008.)
• Please! Please feel free to comment on your observation. I would like to hear your opinion.

013008 - JBHT - 10mins - Loss*Paper

Symbol: JBHT
Type: Short
Result: Lost -1R

• First, congratulations to myself for making the first trade of 2008!
• Sadly, my first trade of the year turns out to be losing trade!
• I picked up JBHT from the Briefing gapper list found on Wall St. Warrior's Blog (daily).
• I wasn't really paying attention to JBHT in the beginning because of the first 2 weak bars, with the first bar left behind an upper shadow
• At approximately 10:45, JBHT painted 2 consecutive Inside+Hammer+NR7-bar-combo.
• That's when I thought it might worth a try!
• My Target was the Opening High, and my Stop was set to the low of the first of the two combo bars
• I entered long when prices cleared 2 ticks above the 2nd combo bar
• 2 bars later, I was stopped out.
• This is the only trade that I made today. Sadly, my first trading day of the year was cut short. Too short, in my opinion! I was hoping that it would at least go sideway for a while, to give me some false hope (and to get me excited.) A 1R lost for a few minutes of excitment (before it turns south) is too costly!
• What do you think of this trade? How would you have handled this trade differently? Feel free to leave me a comment to discuss.
  

012308 - PALM - 15mins - Observation

Symbol: PALM

Type: Short

• First, 'No', I didn't trade today! The only thing that I traded was a few shares of dirty diapers during Pre-opening hours!
• I'm assuming that there were tons of gappers this morning. I was just browsing different stocks to see their damages and I came across this one, PALM.
• It seems to be dummy setup with 2 consecutive Inside Bars + NR7 combo, formed right around the base.
• I would place my Protective Stop at the 5eMA level, since the prices never closed above it prior the entry point.
• Should be at least 5R profit. I just don't know if there were shares available to Short. (If you do know, please kindly leave a comment, just so I know.)
• I hope my readers caught this one, or the many other opportunities out there today.

Good Trades to You!

011808 - XLNX - 15mins - Observation

It is getting extremely challenging to even monitor the market, let alone paper trading these days. I don't want to bore my readers with (first-time) parenthood stuff, but taking care of an infant is no easy task! Yes, I'm supposed to be practising my trading, secretly, while I'm at work. But when I cannot even make it to work on-time, because of late-night baby/daddy duties, it makes it extra tough for me to watch the market while I have to catch up on my work stuff! To make things worse, I have been slammed with a very big project that even if I don't have a baby, or trading, I would still have to put in 50+ hours per week of work time! Now factor my lack of sleep every night... well, you get the idea!

Anyway, I did manage to watch some charts for 2 days from last week, and 3 days this week. Amongst these few days, I didn't really spot any setups... mostly because of my rusty skills and observation from lack of practises in the past few months.

Today, I ALMOST entered long on the following XLNX trade, but just like I mentioned, I was very rusty...


Symbol: XLNX
Type: Long

• I missed the first entry where the blue arrow. By the time I got to work, and started everything, I think was already 6 or 7 bars deep.
• A potential 2nd entry was at the white arrow. That is also the spot where I was considering a Long entry
• I didn't because I was just starring at the chart... wondering... and wondering.. and watching the prices blew right by me
• Anyway, had I entered Long, I would have Stop-out during the next red bar

Well, at least I got something started. The next few months are going to tough. There are even a few business trips lined up. So my posting will be light. Please bare with me. I'm not giving up because I am still very much interested in this! The fact that I've been paper trading for this long, should show you that my interest is for real. Thanks for hanging in there, and thanks for reading my blog!