Trade Recaps:


QLD - I entered a discretionary trade on 23Jul, buying QLD and setting a stop at -1 ATR (14d) or $3.00 from the executed price. The position size was set so that should the stop get triggered, the total loss would be 1% of total capital. At the end of the same day, I changed the stop to a trailing loss of 1 ATR. I was stopped out of the trade on 28Jul a $70.49.


Rationale for entry: The rationale for the trade was the bullish setup on the $NASI detailed in a post on 23Jul and mildly bullish COT data for the Nasdaq 100.


Reason for the loss: In retrospect I should have kept the stop loss at its initial setting until a positive trend was established. Changing the stop as I did caused me to be whipsawed out of the position.


Conclusion: When the 10 day low is equal to or greater than the executed price, the stop is changed to a trailing 10 day low.

DUG: Entered a discretionary trade on 23Jul executed price $35.94 with a stop set at -1 ATR (14d) $2.00 or $33.94. Position size set to lose 1% of total capital if stop was triggered. Doubled position size on 29Jul at $37.48. New stop set at $34.68 which was -1ATR from the average price of 36.68. Stopped out of position on 30Jul at 34.68.

Rationale for the entry: DUG had broken above $35 resistance on strong volume. Energy prices continued to break down and the trend appeared to be up.

Reason for loss: DUG dropped dramatically this morning taking out my stop and violating support @ $35. I suspect this is a short covering rally, but it remains to be seen.

Conclusion: Several things went wrong in my decision making process.
1. DUG is a volatile security. 1ATR may be insufficient setting for a stop loss. 1.5ATR or a 15 day low may be more suitable.
2. I had no good rationale for doubling my position other than the fact that the trade appeared to be working in my favor. I failed to use sufficient money management principles and ended up losing more than 1% of my trading capital on the trade. Actual loss was 3% of total.
3. The break above resistance on 23Jul was probably insufficient reason to enter the trade. Evaluation of COT data to support the trade should have been done.

Stopped out of DUG at 34.63. Net (-5.6%) on the trade.

Stopped out of QLD @ 70.49. (-2.9%). Doubled up on DUG at $37.48, average cost basis is $36.68. New stop at 14d ATR (2.05), $34.63.

rmcranie, aka The Old Fool at Clearstation and Investor Village's NASDAQ board introduced me to his Poor Man's Timing Indicator. I've added the bollinger bands in order to look for extremes. Coupling this with COT data for the NASDAQ 100 can provide some good insight into where the market may be headed. Right now, it looks like the bottom just put in will resemble Dec 07 rather than March 08. I'll be keeping my QLD long on a tight leash.

Added QLD @ 72.62, stop @ 69.12, target gap fill @ $79.

Added DUG @ 35.94, stop @ 33.94, target March high around $44.


AAPL retraced all of its losses from the earnings dip. That's pretty bullish.

As long as oil continues to fall, I do not want to step in front of this market's rise. Interestingly, investors are not repsonding well to big tech's earnings yet the NDX is leading the way today. Buying an airline might be a way to play the oil drop. I like DUG too, but buying a short fund in a rising market seems risky despite the price action.

Which one looks more like a buy?

I have a bunch of ideas pulled from other posters throughout the web. The Fly is long VLO which fits into my thoughts that energy has another leg up in it. No position though.

I'm watching SKF today to look for signs that the selling last week was just due to a short covering rally. Might add for a swing trade today.

Currently long GLD for the long term. I'll look to add DGP on a pullback to gain some leverage.