The Babe's Trades

[riverbabe]

Neon

Forgot to post, sld NEON last week @ 6.04. Got out because I saw a good analysis of the patent claims and AAPL should be able to get around them. Don't see 30 for NEON any more. Got out with +1% green. I'm okay with that.

Currently holding:

AMRN @ 14.435, currently +3.57%
NUAN @ 25.94, currently -9.62%.

Sitting on boat load of cash.

[riverbabe]

Amln

Sold AMLN @ 30.72, +14%

[riverbabe]

Hey Babe, I’m not growling at you so don’t cringe. I’m barking to draw your attention to something that you may or may not want to take a look at.

PNRA was a great short @ 159.
Did you have a target in mind when you put the trade on?

I’m not trying to belittle you or embarrass you; I’m hoping that by reviewing your trade if you made a mistake we both might learn from it. I’m not saying that you actually made a mistake; it’s quite probable that you were following a well thought out plan and were willing to take on a defined risk to achieve additional profit. I’d just hoping you will be willing to share your thinking on that trade.

How much do you rely on chart reading to assist in exiting a trade? In hindsight there are all sorts of warning signs. Traded below the 200ma and didn’t close there on above average volume; bounce off the 200ma 7 days later; stopped making lower lows; Traded above an inside bar.

I know, charts are easy to read looking to the left. Where is it going Monday? I don’t know but I’d trade it in whatever direction it moves. I’d put in a buy and sell stop order above and below the high and the low. Which ever triggers; the other would be the stop.
I’d look for a$6.00 move in either direction for a 1:2.5 risk/reward ratio.

Barking dogs don’t bite! You might get licked a little.

Dog, I didn't even have to look at the chart on this one, as it has been burning into my eyeballs every day since I made the original trade. The gap down below the 200 was because of an announcement that Starbucks had bot some kind of bakery-type company and would compete. The fact that it didn't stay there, and stayed around 141+- for quite a while before moving up to around 150 showed too much support evident for my short risk, so I covered it as soon as I could. Not a good explanation, but my gut was talking very loudly. I think long would be the way to go here if at all.

[Deaddog]

Covered final 1/2 PNRA short @ 146.29, +8%

Hey Babe, I’m not growling at you so don’t cringe. I’m barking to draw your attention to something that you may or may not want to take a look at.

PNRA was a great short @ 159.
Did you have a target in mind when you put the trade on?

I’m not trying to belittle you or embarrass you; I’m hoping that by reviewing your trade if you made a mistake we both might learn from it. I’m not saying that you actually made a mistake; it’s quite probable that you were following a well thought out plan and were willing to take on a defined risk to achieve additional profit. I’d just hoping you will be willing to share your thinking on that trade.

How much do you rely on chart reading to assist in exiting a trade? In hindsight there are all sorts of warning signs. Traded below the 200ma and didn’t close there on above average volume; bounce off the 200ma 7 days later; stopped making lower lows; Traded above an inside bar.

I know, charts are easy to read looking to the left. Where is it going Monday? I don’t know but I’d trade it in whatever direction it moves. I’d put in a buy and sell stop order above and below the high and the low. Which ever triggers; the other would be the stop.
I’d look for a$6.00 move in either direction for a 1:2.5 risk/reward ratio.

Barking dogs don’t bite! You might get licked a little.

[riverbabe]

Covered final 1/2 PNRA short @ 146.29, +8%

[jiesen]

Didn’t mean to come across as if I were yelling. Sorry about that. God I hate to see you cringe.

With a stock like ARNA I would probably still be holding.

My process when my mental stop is hit is:

Don’t do anything for at least 10 minutes.

Place a hard stop under the low. ($7.75)

If the price recovers; keep moving stop up below swing lows. ($9.00 then 9.25)

I’ll keep moving the stop up until I get to my mental stop and then I’ll make it a hard stop.

Hope and Pray it keeps going up. But I now have a hard stop in place. No more emotion involved.

thanks for the idea, DD. that's a nice, solid plan. I find myself sometimes stuck, trying to figure an exit, and miss out big time just because of a lack of a plan...

[Deaddog]

Of course I do! I use the close pps and read the chart and make a decision. Sell next day if bad candles. Or, if market takes it positive next day, hang on a little and "hope and pray" for a better sell price. Keep watching chart. And try not to cringe when DD yells at me.

Didn’t mean to come across as if I were yelling. Sorry about that. God I hate to see you cringe.

With a stock like ARNA I would probably still be holding.

My process when my mental stop is hit is:

Don’t do anything for at least 10 minutes.

Place a hard stop under the low. ($7.75)

If the price recovers; keep moving stop up below swing lows. ($9.00 then 9.25)

I’ll keep moving the stop up until I get to my mental stop and then I’ll make it a hard stop.

Hope and Pray it keeps going up. But I now have a hard stop in place. No more emotion involved.

[riverbabe]

I gotta agree with you on that. Do you have a process in place on how to deal with a stock that violates your mental stop?

Of course I do! I use the close pps and read the chart and make a decision. Sell next day if bad candles. Or, if market takes it positive next day, hang on a little and "hope and pray" for a better sell price. Keep watching chart. And try not to cringe when DD yells at me.

[Deaddog]

Dodged the ARNA downside freight train this AM! All the stops got taken out. One reason I use mental stops, not solid ones.

I gotta agree with you on that. Do you have a process in place on how to deal with a stock that violates your mental stop?

[riverbabe]

Sold ARNA @ 10.16, +2.46%
Sold AMRN @ 12.62, +10.1%
Covered 1/2 PNRA @ 149.75, +5.8%
Covered CHK @ 18.83, -10.5%

Dodged the ARNA downside freight train this AM! All the stops got taken out. One reason I use mental stops, not solid ones.

[billyjoe]

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

Deaddog,
I'd drive you crazy but I'm getting more conservative with age. At one time 50% of my capital was in one stock. I thought "this is crazy" so I sold 80% of it. The stock was AAPL , that was nearly 300 points ago. Still have 15 stocks with a core of 4 that comprise 55% of the total. Reinvesting divs. is a big part of the current plan. It works real well in down years and none of the companies have lowered return or are in distress. And I don't short.

----------------billy

[riverbabe]

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

What I did yesterday was exuberantly buy biotech stocks, without realizing I was using the cash reserve I had put offlimits for buying back my two shorts. Nothing to do with what you're talking about. So I didn't have that reserve to cover the shorts. The margin call was no surprise.

[Deaddog]

Just a good exercise in getting rid of risk.

Risk control is my favourite topic for discussion. It’s the first question I ask when anyone tries to sell me a stock selection strategy or financial planning. How do you control risk?

Never seem to get a satisfactory answer.

Here are my risk control rules:

Define your risk as the difference between your entry price and your stop.

Never risk more than 1% of your capital on any one trade.

I will hold a maximum of 8 stocks in my portfolio and will not exceed more than 25% of the account value in any one position.

Follow those 3 rules and you will never get a margin call.

[riverbabe]

River,
It's heck getting old. Everytime you post AMRN I think it is AMLN. Got me twice already today.

----------billy

Go AMLN! The best offer better be above 30, not less than 27!!!

[billyjoe]

River,
It's heck getting old. Everytime you post AMRN I think it is AMLN. Got me twice already today.

----------billy