The Thing That I Fear Most

As I write this post I am traveling six hundred miles per hour, thirty-five thousand feet in the air.  And I am afraid.

The fact that I am in first class takes the edge off some as it is hard to reconcile the antiseptic luxury around me with a fiery ball of twisted wreckage strewn about a corn field. The Heineken and scotch help as well but only in a “Novocaine” type of way; a local numbness that doesn’t take my mind off the overall “procedure” that is going on.

It’s not worry that fills my mind.  Worry is wondering if you can pay all your bills this month. It’s questioning if your wife still loves you.  It’s hoping that the guy you went out with last night will call you.  Worry is to fear what pleasure is to happiness, a superficial and transitory state. What I am talking about is primal and pathological.

In the seminal book “1984” by George Orwell, a key scene takes place where the protagonist Winston Smith is sent to Room 101 for his final interrogation.  Room 101 is designed as a place where one is confronted with their worst fear, which is designed to break them mentally and fully coerce them into blinding acceptance and loyalty to the State.

There is no “Big Brother” looming over me at present, but I’m in my own personal Room 101.

Fear is a part of the human condition, ebbing and flowing as we go through life, following an inverse bell curve type of pattern.

Fear first visits us when we are young and vulnerable.  Irrational fears of things like ghosts or that we might be adopted.  Sometimes that fear is about potential loss.

I often remember when I was very young, waking up in the dark of the night with a fear of losing my parents.  I would get out of bed, sneak down the hallway, and wait at their door, not returning to bed until I heard the oddly reassuring sound of my father snoring.

Fear takes a holiday as we get older and the zeal of adolescence courses through our veins. Childhood fears give way to a feeling of indestructibility and a sense of life-line that’s infinite. We fear nothing.  I feared nothing.

Only when we have broadened and built up our lives up, both with things and with people, do we start to revisit the idea of fear.  That’s when fear crept back into my life.

In-flight fear medicine.

I’m a overdramatic dick right? What do I have to fear?  I’m not sitting in a foxhole in Afghanistan.  I’m not some poor kid waiting to see if his abusive dad is coming home drunk tonight.  I’m not sitting in the waiting room of a hospital wondering if my results are going to come back “negative.”  What right do I have to be afraid?

But that’s the nature of fear.  It doesn’t make sense.  It’s the innocuous event that takes you to an irrational result.  The sharp twinge in your chest that turns out to be heartburn.  The midnight phone call that’s only a wrong number.  The ambulance you’re driving behind that turns down your street but passes your house.

As I write this post in the jet stream of a coast-to-coast red-eye, I am fully embracing the irrational: trying to cathartically outwit fate, hoping that somebody actually losing their life in a plane crash while writing about losing their life in a plane crash is too ironic even for the grim reaper to stomach.

But it’s not flying that I fear.  For the vast majority of my life I have flown without a second thought to my safety.  Nor is it death that I fear for myself personally.  Nobody wants to die, but I am of the pragmatic mindset that if I die, well, I won’t be around to worry about it anyway.

What I fear about death is leaving my two children at such a young age behind without me.  I specifically fear a “sudden” death.  A death that prevents a last loving and concentrated period of life lessons and memories to sustain them through their lives.

I spent the day I left with my children.  To them it was just a normal day with their daddy, but to me it was a possible last chance to see their sweet faces.  To hear the laughter in their voices.  To hold them tight.  To give them a kiss on the cheek at night as they dreamt.

I wondered what they would remember of me if I did not come back.  Would they think I left them?  Would they think that they did something wrong?  Had I shown them both through words and action just how important they were in my life?  Would they think back on me at graduations, and weddings, and births yet to come as somebody who gave them a foundation from which they thrived, or as a hazy figure like some distant relative whose name they could never remember?

I sat with them both at breakfast that day and we talked.  About princesses, pokemon, and the cat that was playing outside.  We went to the park and chased a squirrel and had a contest on the swings to see who could go higher.  We ate pizza for lunch and I made a point of having their slices cut into thirds so they would be “size appropriate” for them.  I let them both have ice cream, a double scoop in fact.

And at night before they went to bed I laid down beside them, looked in their eyes, and told them how special they were to me, and that I loved them with all my heart.

If I did not return I wondered what their lasting impression of me would be.  I was playing memory roulette and trying to rig the game.

Desperately trying to create memories.

You never know what memory will stand out for you of a lost loved one.  At twenty years old when my father died, I had the advantage my three and six year old would not.  I had decades of memories to draw from, and an adult mind with which to remember them.  Yet with all my advantages, the memory that sticks out for me most is one of the last, and one of the least likely.

As the tumor in my father’s head progressed, it slowly cut off his ability to speak, until he spoke no more.  He was still there and lucid, but the mechanisms that made speech no longer functioned.  It had been a month since he last talked, and I knew I had heard my father’s voice for the last time.

I would sit with him by his bed at home during the day while my mother was at work.  We would watch TV, or listen to the radio, or I would read to him.  Some times I just sat there and held his hand.

One day we were watching the Phil Donahue show, at the end of which they would roll a sixty-second promo of sponsors.  One of the spots went, “Guests of the Donahue show stay at the Drake hotel when in Chicago”……

To which my father turned to me and said out of the blue, “I stayed at that hotel once when I was in Chicago.”  Those were the last words he spoke and he died less than two months later.  That is what I remember.

If you are reading this post now, then you know I am alive.  I will have made it home to my children who only know that daddy had to “work a little extra,” and that he squeezed them a little bit harder and a little bit longer when he got home.

I don’t live my life in fear.  I am grateful for all I have and thank my lucky stars for it every God damn day.  But moments like now, when the fear takes hold remind me that I have to build memories for my children every day.

Each day that I leave them with a feeling of joy, and safety, and love, and support, and family, and self-worth, and confidence, and a belief in themselves, I get closer to killing that fear in me.  To leaving it slaughtered, dead by the side of the road like an unholy demon.

Every day that I survive and give something good and decent of myself to my children, they have more of me to carry with them when I eventually do leave this existence behind.

But for now at least I am home.  I am home.  I am home.

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How To Know When You’ve Had Too Much To Trade

I have a really cool drink for you to try at your next cocktail party.  It consists of vodka, gin, tequila, vermouth, peppermint schnaps, creme de menthe, scotch, bourbon, Baily’s Irish creme, Campari, grenadine, and Kailua.

The recipe is very specific and it must be made exactly as I describe it.  Start with an over-sized plastic cup, then pour just enough out of every bottle in your parent’s liquor cabinet so that they won’t miss any.  It’s called a “Dumbshit-14”, named after my intellectual level and age when I first made it.

If you share this drink with friends it’s probably best not to get too detailed about the ingredients or you are likely to get a response similar to Socrates last words……

“I drank what…????”

This magical elixir of fun and eventual pukeattude was invented by me on the occasion of attending my first real high school party; and not just any party mind you, but a senior party.

Attending this type of party as a freshman presented a number of problems.  If you know anything about the laws of survival in high school you know that a freshman has almost no chance to come out of a senior party in tact.  In addition, selling this type of activity to my parents was likely to elicit a “you’re not old enough to go to a party” response.

Fortunately I had an multi-purpose ace up my sleeve in that of my best friend Ty Thomas.

Ty was a starter on our frosh-soph football team which already gave him some gravitas, but the clincher was that his older brother was in fact a starter on the varsity team, and thus he by extension was “OK”.  By a lesser and more tenuous extension it meant that I was “semi-okay”.

I knew there was no way that my parents would let me go to a party at fourteen, but I also knew that they idolized Ty who was a straight A student.  Because of that they would certainly let me spend the night over at his house, thinking of course we would be studying the night away while drinking soda and eating popcorn.

Here’s a tip for all you kids out there (except mine); when you have a friend who all the parents think is a well-behaved teacher’s pet type but is secretly a party animal, don’t be jealous or bitter, instead, leverage them.

“Hopefully some of Ty’s good scholarly habits will rub off on Brian,” no doubt was what was going through their parentally concerned heads when they said “yes” to my request.

Of course I never promised we would be studying.  And I never promised that the drink of choice would be soda pop.  Oh, and I did leave out the part about his parents being out-of-town and us planning to go to a party.  Oops….!!!

That first time drinking was a real trial by fire as I basically went from one extreme to another.  From feeling the beginnings of a nice buzz to ending the night by puking my guts out on the bathroom floor.  I had no experience with drinking and hence no ability to gauge or moderate my level of intoxication.  I didn’t know when to call it quits for the night.

The same experience can happen when trading, both on a micro and a macro basis.  How do you know when you have traded enough for the day, or the week, or the month for that matter?

Take the example of day trading.  Have ever started that day off with a big win or two, adding a nice percentage gain to your account equity, only to see it get chipped away on trade after trade the rest of the day?  Maybe you even ended up losing money at the end of the day.

What if you just stopped trading once you were up?

“But Brian,” you say.  “I am Johnny trading guy, I have to trade.  I can’t just stop when the market is still open.”  Yes you can, but you have to know when and when not to call it quits.

You do that not by looking at your P/L, but by objectively evaluating how you are trading.  My good friend Phil Ivey* has spoken of this concept in poker, and it applies exactly to trading.

Once when asked how he knows when to get up from the table, Phil remarked that if he was playing well, even if he was losing, he would stay at the table.  But if he was playing bad, even if he was up, he was more likely to leave, re-group, and play another day.

If you are trading well, i.e. following your methodology, taking good risk/reward setups, and correctly managing your trades, you should hang in there as long as there are valid opportunities, even if you are down.  Eventually you will make some winning trades and have a better chance of breaking even or even turning the day into a profit.

And the converse is true as well.  If you are trading badly, no matter up or down, you should pack it in for the day.

In the example above, if you are up big and trading good; keep crushing the market.  If you are up big but trading badly, either hit the eject button for the day or trade smaller for a bit, and then if you trading doesn’t improve, shut it down for the day.

*By “good friend” I mean that I have never actually met the man, but I feel like I have.

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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

Trading The Morning Star Reversal Setup

Let me first start off by saying I am not an expert in candlestick charting.  Sure, I’ve read a ton of books on the subject, including the granddaddy of them all “Japanese Candlestick Charting Technique,” by Steve Nisson.  I have also closely studied the different and colorfully named patterns shown in those books.

Patterns such as the “Three Black Crows,” the “Dark Cloud Cover,” and the “Bukakke,” but at some point they all just seem like a Rorschach test.  I’m not good with concepts in which I don’t understand or relate to the underlying mechanics, and that’s how most candlestick patterns seem like to me.

One of the patterns I do relate to and have written about before is the reversal hammer.  The other one is a pattern that I like and have traded numerous times as well, and was reminded of when my friend NYC Trader pointed it out to me yesterday; the Morning Star Reversal pattern.

There are a number of rules on how to determine and trade this pattern, and reams of statistical data on its success rate, all of which I will read for you right now…..Zzzzzzzzz!!!!

Instead let me show you what I look for in the pattern and the ways I have traded it in the past.

In the chart of $AIR above you will see the most important factor when determining a morning star reversal pattern; a definite and extended down trend preceding it.  How extended is up to interpretation, and though it sounds perhaps too subjective, I have just found that if it visually jumps out at you, it’s probably valid.

The pattern starts with a large red down bar, and the key here is that you want to see a spike on volume on that bar.  It’s an indication after an extended downtrend that the last remaining longs have thrown in the towel and sold.  The next bar of the pattern is designed to confirm this.

The second bar is a doji, and preferably a tight range doji opposed to a gravestone or dragonfly doji.  The thought behind this, for me at least, is that it shows after the large down red bar, buyers and sellers are in perfect equilibrium.  This action is key to setting the stage for the last bar of the pattern which determines if it is a true reversal or just a pause in the direction of the previous trend.

With the last bar we want to see a strong green body that closes right around the level of the top of the first red bar.  The more symmetrical the pattern the more valid it is.

Volume does not have to be as large on this green bar as it was on that first red bar or even the doji, although if it is that’s a plus.  It is really just price action we want to see on this bar because the next one is the “action” bar.

You would buy the next bar as it breaks above the high of the first red bar on a daily chart if you are swinging it, or drill down to the 5-min chart to find a good entry if day trading it.  You definitely want to see more volume on this bar than the previous one.

This pattern works best when the first of the three bars starts at support and the last bar finishes just at or above resistance (the previous support).

The morning star reversal pattern works across all different time frames and a good variation on it for day trading is to wait to see if an inside consolidation bar forms after the third bar.  This gives you a tighter range and a better risk reward to work off of, although you might miss the trade if the bar doesn’t form.

So to recap:

1.  Established downtrend.

2.  Large red bar with volume spike.

3.  Tight range doji.

4.  Large green bar finishing near the top of first red bar.

5.  Look for symmetry in the pattern.

6.  Buy the break of the first bar high.

7.  Strongest if formed at a support level.

8.  Optional to wait for “fourth” inside consolidation bar.

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5 Things That Can Freak A Trader Out.

Forty or fifty muscle-bound, testosterone filled neanderthals were surrounding him, yelling the worst things you could imagine, just inches away from his face.

“YOU SUCK ASS,” shouted one.


Adding a slight twist, his friend piled on, “YEAH…AND I BANGED YOUR MOTHER TOO.”


The target in the middle of it all didn’t pay any attention to them  He just kept drilling fifty yard field goals right through the center of the uprights.

The object of all this venom was the place kicker on my high school football team.  What the hell was I doing playing football in the first place?  Well, that is a story for a different blog post, but in this story, what we were trying to do was mess with his head.

In practice he would make kicks all day long, but come game time he was shank city.  It got so bad that we had given up even trying extra points altogether, opting instead for two-point conversions.

Our coaches were desperate and thought that maybe if we tried to distract and unnerve him in practice he could learn to steel himself, and that would translate to the playing field.

In essence this was once giant X-rated version of the “Noonan” scene in “Caddyshack.”

Suffice to say it didn’t work.  No matter how coolly he handled abuse in practice, once he got under those stadium lights he choked like the choking choker that he was.  Nobody knew exactly what it was that made him freak out, but the same thing can happen to you as a trader.

What might cause you to go off the rails?  Who knows, maybe you are one of the greats that doesn’t get phased by anything?  But just in case you aren’t, here are five things to keep an eye on that can freak a trader out.

1.  Scaling up –  I’ve known traders who can shoot that lights out all day long in the market as long as they don’t go over a certain position size.  Once they do, they then start to change their approach.  Their methodology goes out the window.  They begin to make novice-type mistakes, and ultimately their profitability drops.

2.  Personal problems –  Many traders can focus and stay profitable while their desk is on fire, but if they have problems closer to home, it can knock them off their game.  Maybe their child is struggling in school, their best friend lost his job, or their wife is sleeping with the front line of the Philadelphia Flyers.  No matter the cause, until a resolution to the issue is found they will often struggle.

3.  Being in the spotlight – This one is my Kryptonite.  No matter how hard I try, when I put my trading in the spotlight it always suffers.  It makes me want to teach.  To show how smart I am.  To be a big swinging dick.  All to the detriment of my P&L.

4.  Running Money –  If you take a hit in your trading account and the family has to pass on the summer vacation, that sucks.  If that “hit” is prolonged and you can’t send the kids to Harvard, well, there is always community college.  If you blow your account out and lose the family house, not the greatest thing but there are plenty of rental properties out there.  If however you are the cause of those things for another family, the guilt can be overwhelming. Always having that possibility in the back of your mind for some is too much to handle.

5.  Changing asset classes –  This one is the dark horse.  Often successful traders assume if they can trade one asset class well, they can trade them all.  And some can.  But many find that different asset classes move in ways they are not used to or have greater volatility than they can handle.

Ninety percent of successful trading is mental, and a large component of that is being comfortable in how you trade.  Make sure if you attempt any of the things above that you monitor yourself for any signs that you are coming out of your comfort zone, or your trading may suffer.

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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

Are You A Ring Toss Or Coin Pitch Type Of Trader?

Some things still turn me into an angry jerk.  That’s how it is when you are a recovering A-hole.

Everything used to turn me into an A-hole.  Bad service.  Long lines. Politicians.  Talk radio. My mom.  Employees.  Customers.  Bank tellers.  Slow drivers.  The list was endless.

The pennies in the ashtray of my car were not to make exact change, they were to huck at drivers who lingered too long at a four-way stop.  Yes, I had issues.

It’s not a good way to go through life, being an A-hole.  I always say I am “recovering” because like with alcoholism, you are never too far away from falling back into your bad habits.  Nowadays fewer things turn me into an A-hole and I pretty much have it limited to cruelty to children, aggressive stupidity, and salsa music.

One of those things recently caused me to almost backslide.

A couple of weeks ago I had to volunteer at my daughter’s school carnival.  You know the type; a weekend event filled with food, rides, games, and those salt-of-the-earth folks who in any other context would be picked up for vagrancy, carnies.

My job was to man one of the game booths, but unfortunately I didn’t get to pick which one it would be.  I went to the school office to find out which one I had been randomly assigned (please be the paintball game, please be the paintball game), only to find out I got the ring toss.

This had to be the most bizarre version of that game I had ever seen.  My job was to stack cans of food and soda into towers, and then give customers six rings for a buck which they then tried to throw over the towers, winning whatever they ringed.

People lost their friggin’ minds on this game.

Mind you, I am not talking about a demo of impoverished folks excited about winning basic foodstuffs; but more like middle-aged ladies wearing designer clothes and enough jewelry to sink a battleship.

“OH YEAH….I GOT IT!  I GOT IT!  WINNER, WINNER,” they would shout, pointing to the fruits of their successful throw.

You’ve never seen someone get so excited about winning a jar of off-brand peanut butter, a can of hearts of palm, and a diet Shasta cola.  But despite the excitement, once somebody got a successful ringer or two and gathered their booty, they would inevitably move on.

The next day I returned to the school office, assuming I would be put back in the ring toss, but fate is a cruel mistress and I was re-assigned to the coin pitch.

As you can see from the photo above, the coin pitch board is laid out with various squares containing “3’s,” “4’s,” and “5’s.”  The goal of the game is to pitch either nickels, dimes, or quarters onto the board where you get paid back the number of coins indicated in the square your coin landed in.

There are a couple of “rubs.”  The first is that the coin has to completely rest inside the square; even a hair outside it and you lose.  The second is that if you pitch a dime for example and land in a “5,” you get back a total of five dimes, not your original dime plus five more.

I thought that this game would get a few sideways looks from passers-by, and the occasional teen upstart trying to impress his girlfriend, but I was wrong.  Boy was I wrong.

This booth was packed all day long, so much so that at times I couldn’t keep up with the action.  And unlike the ring toss, people were losing and losing badly.

I did a mental calculation and figured that on average, a “winner” came up once out of every twenty pitches.  These odds were so incredibly bad I could not believe it, but people were eating it up with a spoon.

Guys were dumping five, ten, twenty dollars worth on this con-game.  This is where ole’ “A-hole Brian” started to come out.  It’s stupid I know, I mean the point of the game is to make money for the school, my daughter’s school.  I should have just kept my mouth shut and let the cash pile in.

It’s my weakness, my “A-hole weakness,” and I have had it for as long as I can remember. Ignorance.  Stupidity.  Imbecility.  Doltishness.  Asininity.  Whatever you want to call it, it’s always been my hot button.

I’m not talking about a general lack of knowledge or an understandable naivety, but a boorish ignorance mixed with a desire to stay ignorant when the opportunity to learn is offered.

You want to know how compulsively fixated I could be on it?  Even during my high school years, when the hormones of a young man are raging worse than masked anarchists at a G7 meeting and every living moment you have is about getting laid, I would actually take myself out of game if a girl showed herself to be an idiot.  For example….

Me on date with hot chick who might let me get up to bat.  Hot chick mentions she loves the “Spanish” food we had at dinner.

Me:  Uh, well Don Jose’s is actually a Mexican restaurant.

Hot Chick: Mexican, Spanish…what’s the difference.

Me:  Well Mexico is a country to our south, that was discovered by Europeans who mixed with the native population and created a new and distinct culture.

Hot Chick:  But they both speak Spanish right?

Me: Yes technically, but there are dialectical differences, and using language as the litmus test to compare cultures is a bit stupid.  The UK and America are quite different even though we both speak English.

Hot Chick:  Are calling me stupid?

Me: Well you do seem kinda ignorant.

Fast forward to me driving home alone and needing some quality time in the shower.

So by the fourth or fifth toss, if these guys didn’t hit a winner on the coin pitch they were already so far behind the 8-ball there was no way they would ever get even, let alone get ahead.  I started to needle people a bit, trying to explain to them the futility of their quest.

Some wised up and moved on, but oh so many, the majority in fact just dug in and bought in for more.

But like I said, I am a recovering A-hole.  Years of therapy were worth it and I became self-aware that my “dick meter” was approaching ten.

I was able to reign myself back in, let people pitch all the coins they wanted, and just smile and say to them “thanks for playing.”

I am not good with expectancies, that is more Kid Dynamite’s area of expertise, but it didn’t take a rocket scientist to know that the expectancy in the ring toss was better than the coin pitch, and only a few smart players knew it.

It’s the same when picking your setups to trade.  No matter how sexy or enticing you think a trade is, if you don’t have a reasonable expectancy compared to your risk, the more you trade, the deeper in the hole you will get.

You can’t let the “action” or the thrill of the trade blind you to low probabilities of success like at the coin pitch.  You should always strive instead to find the high probability, lower risk setups like the ones at the ring toss.

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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

A Poem For A Trader

Oh trader of the South you are so “Magical.”  You’re buys are never higher than the low tick, nor your sells less than the top….

Time and logic are no match for you, as you buy and sell in dimensions mere mortal traders long to access, silly fools that they are…

Like the angels, the “right” side of the trade you always find, slaying the demons of draw downs like the paper phantoms they are…

Though those who can’t be “fixed” vex you at every turn, you sail on to a golden river of profits, “resting” on your studious throne…

Many have beached themselves on the jagged rocks of trading, but you peel away the mysteries of the markets for your minions…..

From the tip of Alaska to the end of the keys, I do believe a soul as true and honest as yours nay shall be found…

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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

5 Steps To Better Focus Your Trading

You’re a new trader overwhelmed with where to start.  You’re a seasoned trader who has been experiencing “indicator creep.”  Or you are just an ADD mutant like me who gets distracted when the wind blows.

Whatever your scenario, it is important to have a methodology that keeps you focused on good trade candidates and the setups to trade them.  There is no way a blog post can cover every nuance of that process, but if you feel that your trading has gotten too convoluted and complex, starting from scratch and following these five steps will put you back on the right path.

Lists – This is where it all starts.  You need to have a “go to” list of stocks to consider for trade candidates.  The list does not need to be that large; in fact 200-300 stocks is optimal.

You can arrive at that list two ways; top down or bottom up.

The top down method just filters the universe of stocks until you get to a manageable list. Filtering by things like price, liquidity, and market cap drastically chops the list down.  Then take out industries you don’t trade like biotech or porn, and just keep using progressively narrower criteria until you get to the size that works for you.

Bottom up is just building a list based upon what stocks are the most actively traded ones currently.  You can start with the usual suspects like $AAPL, $AMZN, $SPY, etc. and then just look at the streams to find other candidates.

This then becomes your list to visually scan each night.  You will prune this list from time to time, removing some stocks here or adding some stocks there, which can come from the occasional updated filtering of the broader market or from changes in trader sentiment on specific issues.

Levels – Once you have your list together for the first time it is now time to go through each stocks and draw levels.  These are horizontal support and resistance levels that you will draw on the daily charts.

First start with obvious areas like gaps, and then look for spots where price has repeatedly found support or been turned away.  You should go back a number of years when doing this as price has a long memory.

This process will make it very easy when scanning through your charts at night to see which stocks are coming into areas where potential setups may form.

Lines – Now go back through the charts and start to draw lines.  These can be trendlines or channels, or they can indicate patterns like wedges, flags, or triangles.  Once again you are trying to make it very easy to graphically see areas where prices might react or where price is consolidating as you do your visual scanning.

Curate –  Okay, I lost the “L” theme here but that’s okay.  Each night as you go through your list you are going to look for those stocks that have setups that might trigger during the next trading day.  Flag these stocks and have them ready and loaded in your intra-day charting software as well as your trading platform.

The size of that list will depend on a number of factors, most importantly the current state of the market in general.  But even in times where good setups are plentiful I think that it is best to focus on twenty stocks at most.  But don’t worry, the next step will help make sure you don’t miss one that’s not in your intra-day list.

Alerts –   I have written extensively before about setting up trade alerts, but the point here is that you are tying to focus and somewhat simplify your trading.

You have your list of stocks, each with their charts marked up to easily find key areas where trade entries might occur.  Now by setting alerts just below those areas (or above for shorting), you do not have to constantly monitor every stock worrying that you might miss something.

You have pulled twenty or so of those out and put them in your intra-day set up and they can be your main focus, but if one from your larger list triggers, you will be aware of it as well.

The first three steps, Lists, Levels, and Lines will initially take a bit of time to complete, perhaps a weekend, but the beauty is that once you do that, you will rarely have to revise them.  This is the same with Alerts, once they are set you don’t have to worry about them again until they are triggered.

That leaves just the process of visually scanning your stocks each night to Curate out the best candidates for the next days trading.

In trading you will never be able to catch every stock that sets up each day, but you don’t need to do that in order to be profitable.  These steps will provide you with a simple and efficient way to get a good core of trade candidates each day.

Once you have internalize this process you can then add the nuances of indicators and studies into (or back into) the mix to better fine tune your trading success.

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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

Why Gold Will Eventually Go To Zero

On Monday I was fortunate enough to appear on the “Business for Breakfast” radio show.  It was there that I repeated my long held and controversial prediction that gold will eventually become worthless.

Of course this is an ultra-macro call that won’t be proven or disproven until long after I am dead and buried, which coincidentally makes it the perfect type of call for the morning business shows.

Please keep in mind this was from Monday when you hear price and market action references.

(click image to start audio)

Why not subscribe to for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

10 Trading Terms That Sound Like Sex Acts

In no particular order….

  • Blowoff Top
  • Bottom Bounce
  • Shorting Against The Box
  • The Piledriver (Ooops, sorry.  Actual sex act)
  • Inverse Hammer
  • Kissing The Trendline
  • Rolling A Position Forward
  • Getting “Cramered”
  • Churning
  • Spread Trading

Why not subscribe to for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).

Love And The Markets

I was in love once.

Not the deep, mature, soulmate type of love I have now with my wife, but the stupid, obsessive, retarded puppy type love of youth.

I was twenty years old, what did I know?

I used to think about her all the time.  Remember those illustrations from back in Galileo’s day that showed the whole universe revolving around the Earth?  If you replaced the Earth with her beautiful but vapid face, that was the picture constantly being shown on my internal flat screen monitor.  I’m not bitter, she was vapid.

Often times as I was laying in bed late at night I would quietly free associate about her.

“I wonder what she is doing right now?  What is she thinking?  What are her dreams? Should I call her tomorrow?   Did she think those jeans I wore last week were cool?  Who does she like better, Wham or Depeche Mode?  Did she notice when I smiled at her?  If we got married, where would she want to go on our honeymoon?  How many children will we have?”

I imagine that at the same time, on the other side of town, she too was laying awake, deep in thought.

“I think I like vanilla more than strawberry.”

The relationship between us traders and the markets is the same.  We obsess over the markets, dreaming of a day that we will join in a perfect union with them, and feeling bitter and spiteful when they do things to hurt us.

The thing is, when it comes to our relationship with the markets, just like mine with Evil Enchantress (not her real name), there really is no relationship.  It’s an imagined affair with contrived conflict.

John Cusack said it best in the movie “Grosse Pointe Blank.”  While attending his ten-year high school reunion, he runs into “Bob”, his former nemesis, who tries to start-up shit all these years later.  To which Cusack counters….

Why would you want to hit me, Bob? Do you really believe that there’s some stored up conflict that needs resolution between us? We don’t exist. There’s nothing between us. So who do you want to hit, Bob? It’s not me.

Just like “Bob,” too many traders personalize the markets and end up acting like they are in a dysfunctional relationship.  For example…

The market flirts with everyone at the bar causing the trader to leave in a jealous rage.  The market then calls up drunk at 3:00am wanting to come over.  The trader lets the market in, but ends up getting in a big fight, breaking stuff, and waking up the roommates.

Then when the trader is at work the next day, the market breaks in through the back window, goes into the bedroom and cuts up all the trader’s new clothes with a pair of scissors.

When the trader gets home and sees the carnage, he calls up the market’s mother and tells her that she is related to a “whore” who will “do it” with anybody that pays for a drink.

Of course the market finds out about this and storms over to the trader’s house. Thinking ahead the trader has locked all the doors, however the market just climbs up the outside trellis while wearing a mini-skirt.

But the trader has already planned for this contingency, spraying the market with a garden hose from the balcony and calling it a “slut” while all the neighbors watch.

This is no way to trade.

Don’t fall into the trap of personalizing the markets.  It’s a non starter and will only work against you in your quest to be a profitable trader.

It is best to realize that the only struggle you have is with yourself and not with an entity that has no idea that when your parents told you they would get you anything you wanted for your 21st birthday you asked for tickets to the ballet because you thought that she would like it DAMMIT….!!!