Stocks to watch for 12/20/06

Reported earnings after close yesterday: CHAP, PALM

Reporting this morning: KMX, FDO, FDX, PKE, PRGS

Reporting this afternoon: BBBY, COMS, NKE, PAYX

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SMART Goal Setting

Dr. Brett Steenbarger's new book (Enhancing Trader Performance) has a section on goal setting. A PDF of Chapter 1 can be found here on his blog.

The acronym SMART is used to summarize features of effective goal performance. Goals must be

1. Specific
2. Measurable
3. Action Oriented
4. Realistic
5. Timely

In this post, I will identify Specific goals.

As in my previous posts, I have stated that my goals are

1. FIND the perfect setups
2. Enter with the right size
3. Manage the trade to maximize gains and minimize losses

but these goals are a bit vague, so they "cannot guide specific actions and facilitate the development of positive habit patterns."

Newly revised trading goals-

1. Find X / Dummy setups . Charts must have the following patterns- 1. 2. 3.

2. Enter with the correct size. The correct size is deteremined by my R value, which is currently at $150.00 or ~0.5% of my portfolio. From the previous bar or in some cases the current bar, I use the following formula to calculate position size:

Long position
R/(High of bar - Low of Bar)

Ex: R = $150.00 (max loss on current position)
Bar High $150.00
Bar Low $149.75

150/(150-149.75) = 600 shares

Most of these have been memorized ($0.25 stop = 600 shares, $.50 stop = 300 shares, $.75 stop = 200 shares), so this should step should be the least of my worries.

3. Manage the trade to maximize gains and minimize losses

This is achieved by initially setting a hard stop that is far away enough to give the stock some wiggle room. The hard stop (actual order that is placed to exit the trade at specified price) is used in case of a freak emergency, i.e. internet outage, power outage, or if i get called into a meeting. This locks off my downside, so all I have to do is watch for continued price movement in my direction.

Profit targets are taken at various fib extension lines, but half the position will always be taken at 1 point of profit.

Fairly specific and simple rules. Now it's time to apply them.

Manna Korean BBQ RIMM, UAUA

Having to work a full time job and trading at the same time is really getting to me. Getting called into meetings during trading hours can be extremely upsetting. The UAUA trade below was one that I had put on maybe 20 minutes before I was called into a meeting. Luckily it didn't get stopped out all the way and I was out in time to manage it properly.

RIMM = D

UAUA = C


+167.20

Watchlist for 12/15/06

Pre-market earnings: None

S&P 500 ATL Stocks: GS, ATI, SHLD, BSC
Nasdaq 100 ATL Stocks: RIMM, SHLD, WYNN, AAPL

Going to try and cut my watch list down. Currently have charts up for different sectors and about 12 charts for gappers.

My job is to
1. FIND the perfect setups
2. Enter with the right size
3. Manage the trade to maximize gains and minimize losses

Mixed Leftovers LVS, AMR, WHQ, AMR, WYNN

Today was FRUSTRATING. The markets opened and ran hard and fast. I kept feeling like it was too late to catch a move up and had an overwhelming sense of uncertainty. I had pretty much missed everything before catching the short on AMR. Then I continued to have the pressure of not making a lot of money on a Dow +100 day. Seriously, I can't focus when I'm in that state. My job is to trade the perfect setups and didn't even come close to achieving that today. Also, the winning streak has officially ended.

I took another step towards swing trading, since a professional trader that I chat with keeps telling me: "The BIG MONEY is made from holding overnight". Entered with very small size and am up about half a point today. Looking for more upside tomorrow to build a cushion and "wiggle room" for the next move up. The second chart is a daily.




LVS = B


AMR = B



AMR = F

WYNN = D



-166.00

Turkey Masala XLE WYNN ATI OIH SU

Received my first A trade today, which was also one of my most exciting trades. I saw a range setting up in XLE and went long as soon as it broke. About 30 seconds later I hear the familiar ring when an economic report is reported on CNBC and I totally freaked out. Oil inventory numbers were out. Price jumped as soon as the report came out and I had to quickly change over to 1-min. charts. I exited the position at the first sign of momentum slowing.

XLE = A

WYNN = C


ATI = B


OIH = F


SU = B


+1.00 (yep that's one stinkin dollar for a day's trading, but the winning streak still continues)