First week of 2013

Well it's a new year and this week was a shorter one with the holiday on Jan 1. The u.s. news was dominated with the last-minute agreement between lawmakers which essentially avoided the 'fiscal cliff'. I'm not 100% sure what all this meant but I do know that the markets rallied once news of the deal passing came through. First week of 2013 was decent for me in terms of trading, I managed to finish every day profitable with the exception of Monday which was basically a flat day for me. Hopefully some people follow my daily activity on twitter as it is there that I post most of my entries and exits on trades as well as other thoughts. To check out my twitter click here. I am trading a bit smaller position size just until I am back in the groove of things. When I am trading full size I am comfortable risking at the most $300 per trade (my share size is obviously based on where I decide I am risking to on a trade). Right now to start the year I have dropped that down to $100 per trade. I will probable be upping in a week or two. Right now the plan is to be home in Bermuda for the next few months so I really will have nothing to do except trade and play golf :). Anywayz this weekend is for catching up on spreadsheets and going over account statements from 2012 (the boring tedious part of trading). I'll be back in action next week from Monday onwards! Just want to note a few things about some trades from the week. My 3 main setups occured during the week, however not in textbook form (they are open to interpratation). I guess the key point I would make about the week is that going into each day, I have a trading plan laid out on a few stocks based upon potential setups and I look for them to develop. Sometimes, as I mentioned above, they will not set up exactly as I plan but it is good to recognize when they may still work. Case in point: MCP from Friday, I had it on watch going into the open as I knew the $10 area was support and it was a relatively strong chart, plus the market was up so expecting a push higher on MCP. Ideally I was looking for a weak open, then maybe a push just under $10, then some gearing and higher lows for a push up. Take a look at the chart, MCP opened weak and put in a base just ABOVE $10, not below as I had thought. It then proceeded to gear a bit and drift sideways, but always held above that $10 base. It put in higher lows (the blue dotted lines) and then once I had recognized this, I should have put on a first position long around $10.05 (the first blue buy arrow) risking to just under the support at $10 (maybe $9.95). So lets say 500 shares long at 10.05 risking 10c ($50)...once MCP started to perk up and broke the upwards resistance (higher red dotted line) that was the add-in around 10.15 looking for the pop. Lets say another 500 shares so I would be in 1000 shares at 10.10 avg and risking to $10 now as I know thats the base ($100 risk). As you can see MCP popped to around $10.35 so I could have easily taken 20c or so out of it or $200. I did NOT grab this trade as I was waiting for a pop below $10 but it goes to show that it is important to adapt to what sets up and not be stuck waiting for an exact setup.

It's also important to stay in tune to the market (news, events etc). I missed a great sell on a chinese stock LPH on Thursday when I was alerted by another trader that a report came out accusing the company of fraud. I was alerted when the stock price was around $2.10 and could have easily grabbed a short but did not bother. LPH then proceeded to drop over $1.50 and is now halted. Coulda shoulda woulda. Ah well here's the LPH chart just so you can see what I am referring to.