Stock Trading Services

Where do you get your edge in the markets?  Yahoo Finance chat rooms?  Twitter?  Pro trader alerts?  Hey, I'm not going to knock any of these, because I've tried them all.  Okay, okay...I'll knock the Yahoo Finance chat rooms.

I thought it would be good to create a post about stock trading alert services.  Most services will charge a monthly fee, typically around $99 per month. Some offer discounts if you sign up for a year.  A lot will have free two week trials, which are great to get exposure and see if the service is right for you.

I have tried five different services over the past three years.  Before I go on, I want to state that I have the highest respect for their skill, knowledge and profession.  Not only do they call out trade alerts for their subscribers to follow, they have to manage their own trades and ensure they do their best to protect their followers against big losses.  Trading is not easy if your doing it on your own, let alone worry about keeping 50-100 subscribers happy.

So...which services did I subscribe to?

• Fous Stock Picks http://fousalerts.com/
• I subscribed to Fous' service for over a year and was my first experience with a trading service.  I learned a ton over that period and still use his methods.
• @stt2318 (Keith Kern) via Twitter - Moved to TheFiveTradingClub
• Consistent Swing/Day trader. The biggest difference here was that he nearly always stated his intentions for entering a trade before getting in.  It allowed me to get the best entry and not chase after an alert.  I subscribed for 1 year.
• Bulls on Wall Street http://bullsonwallstreet.com/
• I gave BOWS a few months.  They have great traders with lots of education.
• TheFiveTradingClub http://www.thefivetradingclub.com
• I took the free trial and thought about subscribing mostly because of my experience with Keith Kern, but never did pay for a subscription.  
• StockHorizons http://stockhorizon.com/subscribe?r=353327939
• Automated alert system that I am currently subscribed to.

I quit most of these services for one reason or another, but ultimately what I found was that I needed to figure out how to succeed in trading on my own.  Here are some good and bad aspects of subscription stock alert services.

The good:

• Free Trials - Allows you to test the service, make some trades, get used to the flow and see if it works for you before you buy.
• Education - Many premium services offer great education materials. Take advantage of all the education offered by the service.
• Experience - Learn from the best.  Listen to what they say. Learn from their actions. Apply it to your trading.
• Support - You have someone to lean on for questions, if you need help
• Community - Chat rooms offer the ability for members to feel a part of a community of traders that are driven toward a common goal.  You don't feel alone.

The bad:

• Extra Expense - When you are trading and struggling to make a profit every week, the extra fee can be an added weight to carry.
• High Hopes - Traders in these services are VERY good.  They will realize profits of $1000 per day at times.  You cannot go into these services and expect to replicate the returns that these pros achieve.  It will never happen.  Don't get your hopes up.
• Accountability - You are accountible for your trades, your plan, your money.  There is no one else to blame except you.  You click buy and sell. You can't blame the other traders if you don't make money.
• Noise - I find it very distracting to have a trader sending alerts, reading chat room messages, twitter streams, news, etc.  

Bottom line: many services are good for many people.  They are a great way to learn and witness pro traders at work.  If you feel like you need to join one, find one that fits your trading style and personality. Keep your expectations in check. 

~JP

401k Updates

I decided to put more of my money to work in my 401k.  Previously, I was about 50% in cash (or money market accout) for the past year.  

My changes include 50% of my cash allocation (25% of account) into international/global funds.  I think that global markets, Eurpoe particularly, has bottomed in 2012 an will start a new bull market.  I expect it to outperform the US markets in the next year.

My other change was to reallocate more cash into small cap funds.  I took about 10% of cash (5%) of account and placed it into small cap value and growth funds.  Small cap indexes recently broke out to all time highs.  While there might be some short term pull-back, I think that small caps might lead and outperform the large cap indexes.

That's all for now.  I still have some cash that I will use to buy on a 5-10% dip in major indexes this year.

~JP

Worst Trading Week in a Long Time

There's no good way to sugar coat it....I had a bad week trading stocks.

So, what factors led to my poor performance?

When I review my trades for the past week, I noticed that I was taking trades that I normally don't take.  Day trades, short trades, and bounce plays caught me over-trading and racking up small losses.  Some worked, some didn't, but they all didn't give me a very good edge.

There were also a couple swing plays that failed big for 4, 5 and 10%.

I had too much risk going into Friday, which I had noted for a volatile day....quad witch, end of the world, fiscal cliff drama, etc.

What did I learn?

Be more patient....wait for the best setups and confirmation

Don't hold too much risk overnight, especially into big "event" days.

Stick with the setups that work for me.  I was trying to learn some new trade setups....I should have paper traded until i felt confident and showed some success in what I was doing.

Watch the market for signs....after two big bounce days, signs were there for at least a rest or slight pullback.

The end of the year is almost here.  Its been tough to trade because of all the political drama that hangs over the markets.  I don't think that will change anytime soon.  Last year, I set some goals for the return that I wanted to achieve in my accounts.  Those goals were not met.....however, I was profitable, which is never bad.

Soon, I will be setting new goals for next year.  These goals will include profit targets, but may also include learning new tricks of the trade, limiting dumb mistakes, developing better habits, etc.

I'll come up with a list of these goals for this next year...

Merry Christmas to all!
~JP

12/16 Watch List

12/16 Watch List
Some ideas for next week.

Stock	Entry	Stop	1st Target	2nd Target	Risk Reward	Notes
STP	1.09	1	1.16	1.5	1-4:1	tricky trader (volatility). 4 month base.
STRI	2.68	2.49	2.88	3	1-1.4:1	thin. 20/50ma cross coming. riding 13ema
ECYT	9.8	9.6	10	10.3	1-2:1	thin. 20/50ma cross coming. volume increasing. riding 13ema
DRYS	1.85	1.75	2	2.06	1.5-2:1	good vol friday. maybe r/g move for entry.
JAG	0.8	0.77	0.83	0.95	1-5:1	thin. low price. inv h/s pattern.
NG	4.73	4.64	4.85	5	1.1-2:1	50ma above at 4.78.

Sutter Gold Mining News (SGMNF)

Sutter Gold Mining (SGMNF) has been an interest and holding of mine for the better part of a year.  My stock position is small relative to my total portfolio due to the risk factor of small start-up companies.  The company appeals to me for a few reasons...

1) Gold price increase potential
2) Small miner close to production (December 2012)
3) California's history of gold mining in the foothill region (Gold Rush)
4) I live fairly close to the mining location and have an interest in local businesses (without this factor, I probably would have already sold my total position).

On Wednesday, Sutter released more news about its production progress and stated that it is on schedule to meet the December production deadlines.  That's good news and I am eager to see the first production report as it could strongly influence the direction of the stock price.  The press release also had some pictures from the site that shows progress in construction of the mining sites and mill.  These pictures are great to see because it provides some perspective to investors for progress, size and scale of the operation.

To my delight, everything is looking very good.  While I have ZERO experience with mining (only what I see on TV), it appears that the construction of mine sites (mine openings and mill) and equipment is high quality.  There isn't any rinky-dink equipment, like you'd see on some of the gold mining TV shows.  This is a real operations.

It all looks good so far.  So, we sit tight and see how it all plays out.

Check out the recent press release...HERE
~JP

Took the Big Loss in FSLR

Well....that FSLR trade didn't go as planned.  In fact, it's tough to see how it could have been any worse. I buy on Wednesday in anticipation of a breakout to the upside.  Two days later, I'm selling at a roughly 15% loss as the price knifed through my stop loss.  There happened to be a downgrade issues in the morning with some concerns of warranty issues on the companies products.  Next thing you know....down 10% pretty quickly.  This price action is why I rarely trade solar stocks.  On Monday, you could very well see the price recover 5-10%.

So what did I learn about this trade?

The bad....
1) I should have waited for confirmation of a breakout to the upside instead of anticipating the breakout.
2) I had an opportunity to stop out earlier...as the price action and volume (along with news) during the morning was indicating a bigger move downward.
3) Lost ~15%

The good...
1) I had a plan and stuck with it.  This plan prevents me from the potential to loose more than anticipated.  Even though the trade lost ~15%, that equates to only 0.6% of my total account.
2) I took the appropriate position size (risk) considering the type of stock and volatility. I only took a partial position.
3) I'm still in the game and live to see a new day.

Even though there are some good takeaways in this story, the goal is still to make money.  I don't mind making some mistakes as long as others (along with myself) can learn from them.

~JP

10/4/2012 - New Short Term Positions

Its been a couple months since my last post.  The stock market in past month has been really choppy and a challenge to find stocks that could be longer term swing type trades.  Since August, I've been holding some gold (GDXJ) and commodity (GCC) ETFs.  I also still have some Sutter Gold Mining stock.

I took a stab at First Solar (FSLR) yesterday ($23.28) as it is coiling nicely after a good run up in August.  I usually don't like buying solar stocks because of their random volatility, but this is not a long term investment. I expect this to do one of two things; accelerate to the upside or fail dramatically to the downside. My upside target is around $30. My stop is set at $20...or just under.  The 50 dma is rising under the wedge and the 200 dma is falling from above.  I'd like to see the price move through the 200 dma. These two moving averages should cross soon, which should be bullish.

I decided to buy some Silver Miners ETF (SIL) today ($25.28) due to the bullish nature of the chart.  Although I already own some gold stocks, I think that Silver might outperform Gold in the short term.  My target is around $28.  I will hold a pretty loose stop at around $22.  There is a possibility that the price can dip and a "handle" will form on the "cup".  If that happens, I might add more if ~$22 holds with the expectation that it moves up through the ~$26 price resistance.

Current Portfolio

Purchased	Symbol	Price
4/13/2012	SGMNF	$   0.347
8/16/2012	GDXJ	$ 20.520
8/16/2012	GCC	$ 29.350
10/3/2012	FSLR	$ 23.280
10/4/2012	SIL	$ 25.280

The market looks decent if it can continue to move above September highs. However, it can turn on a dime. With regards to my 401k adjustments, I've decided to hold off on changes until early next year.  Protect your capital and stay in the game.  I wish everyone the best!

~JP