NOG 2.5% in 4 trading days

A short and wild ride on a Bakken shale play Northern Oil and Gas (NOG)

Lots of volatility here. I entered to optimistically because there had been three bars within the lower bollinger band after a big selloff. But the day after my entry things went further in the downtrend.  When the third green bar in a row appeared on 3/9,  I got out with a profit at near the days high.

My 'third green candle' rule says that most volatile stocks won't last more than three days without a correction. For these short term swing trades, it might be a little conservative, but the goal with these trades is to make 1% per trading day, not 30% over six months. So every daily candle is significant.

The large green candle on the day this trade was closed is interesting The day started with a very low open because of some overnight trading, then jumped up to levels where I was more than happy to get out of a volatile trade with some profit. As you can see from the daily chart, there was a big sell off the day after I closed with a profit.

ZIP Reversal 5.2% in 8 trading days

Playing the ZIP reversal for 5.2% profit in 8 trading days.

Notice that I have tweaked my EMA settings. The green line is now the 5 period EMA, and the pink is the 13 EMA to provide better timing for entry.  After a string of losses , I'm trading very conservatively at the moment, hence the early profit taking.

Thanks to the Harvard Investment strategy for the insight into which EMA is most accurate for timing market reversals (They use the 200 day EMA on a monthly chart). Go figure how I got to changing my daily chart to the 5 day based on that...

Cloud Computing Research Report

Cloud Computing Research Report From Motly Fool
http://www.fool.com/fool/free-report/15/rbbillgates-audioexternal-67669.aspx?email=peter.j.hill@hp.com&iid=22402&repeatecap=&vsaid=4025&src=irbsittxt0900002

ZIP it up!

Overnight trade in ZIP realized 1.5 % profit.

Pandora's box?

What would you do with a Pandora's box of a stock chart?

Pandora (P), has showed wild volatility since IPO. I was stopped out of my technically perfect entry on 12/20 last month at $10.14, and then was too scared of the volatility,  and missed the wild 40% run.

Yep, a tragedy. That's the psychology of trading.

Now Pandora is on another run, and I'm worried again that it will crash quickly. The problem with a stock like this is that it is almost too volatile to even use stops. Most 'normal' stop loss strategies will get triggered when a stop is jumping up an down by 3-8 % every few days.

RSI is still at 70, so this rally could still go higher, but the risk of a sharp dropoff is considerable.  My broker won't let me sell short this stock, so it's long positions or nothing. I don't think the market really has a clue how to value a company like Pandora.

When should you take profits in an uptrend?

Even though CHKR appears in a consistent uptrend, my trading plan tells me to realize profit if a trade exceeds 1% per trading day. This trade was a profit of 3.3% in three trading days.

What do you think? Follow your plan or let a winner run to the end of the trend?

You can use a trailing stop to let a winner run, but a trailing stop will never get you out at the high. If a stock is moving at more than 1% per day, chances are that you will less than satisfied with the result of a trailing stop

If you use the green line (8 day EMA on this graph) it's a lagging indicator. By the time you've realized the line has peaked, the stock might have pulled back 3-5%. With these decisions, it's all about being comfortable with you trading plan and trading style.

With the sort of swing trades I normally do, when the candles penetrates the upper bollinger band (light brown line) for more than three daily candles, usually a pullback will occur, even if the overall trend continues.

So my rule of thumb for the ideal sell point is the high of the day on the third day when the bollinger band has been penetrated.

I'm following my plan and taking the profit, although I like this trend so will be looking for a re-entry point.

Some trading notes

1% per trading day is beating the market

If a stock goes up by 1%

With a $5000 investment, 1% is a return of $50
With a $10,000 investement 1%

There are many more opportunities available to make 1% in a day, than there are to make 10% in ten days or 100% in 100 days.

The 1% rule means we trade often, and take profits often. The positive psychology of this has a tremendous impact on our confidence.

Don't use trading stops. If you are thinking about using a trading stop, then your intuition is telling you that your want to take profit, and not stay in the game. So go ahead and take the profit, then  reenter the trade with the same stock if it is really still a good opportunity.