Sunday, April 27, 2008

How I Find Possible Trades

Hello everyone and thanks for stopping by. I hope you are all having a good weekend and enjoying some rest away from work. Today I want to start going over in detail the key points of my trading plan. Hopefully by doing this we can all gain a little more insight in how to better pick stocks.

First up is how do I find prospective stocks that I would like to put into my watch list. You may recall from my last post on "My New Trading Plan" that I like to pick possible trades out of the top daily percentage gainers or losers for the day. The reason I do this is only the strongest stocks or weakest stocks are going to make the biggest moves. Now we could just follow any group of stocks and find some trades but most likely the breakouts would not be very strong and without any conviction. Now by reviewing the top gainers and top losers we find stocks that are most likely moving because of some sorta of catalyst, such as earnings or revised guidance or even news regarding the industry that they are in. Also stocks can make very strong moves because the sector they are in happens to be the flavor of the week. The commodities sector is a good examples of this.

One key point to make is you have to make sure you have a solid idea on why a stock is moving before you consider it for a trade. If you don't know whats going on then you will have no idea when a stock might reverse and leave you holding the bag.

So thats it for now on that subject, as always please don't hesitate to send any comments or suggestions my way at or its always good to leave a comment.

Thursday, April 24, 2008

My New Trading Plan

Hello and welcome back to my little trading blog. As I said in my last post I have updated my trading plan and hopefully have a new strategy for success. As I have in the past I hope to use this blog to detail my daily trades and ideas and use this space as a detailed trading journal. Of course I hope to also get feedback from all of you out there on my ideas and trades.

So without further ado I present my new plan. This plan is much different than anything I have done in the past and is much more short term in nature than my past strategies. First I continue to get new trade ideas from the top daily percentage gainers and losers in the NASDAQ and NYSE. From these I build a watch list that I monitor on a daily basis. Currently this list contains 38 companies. On a daily basis I monitor these companies and trade on a variety of indicators. Currently I am baseing my trading on mostly technical signals as my trades are short term in nature, consisting of a few days to a few weeks. Currently I try to trade stocks that are at support or resistence and looking to break out. I also look for stocks that are breaking trend lines as well. As verification on these trades I use a combination of MACD, MACD Histogram, RSI, Stochastics, and Moving Average Envelopes.

Once I have selected a stock I only place orders after the market close, this way I take any emotion out of the trade. For this type of trading I place a contingent order to buy just on the other side of the resistance or support, usually try to put it about 4 cents or so over resistance. If in fact the stock moves as I hope my trade will trigger and I will automatically be in the position and hopefully on my way to riches. Once in a trade I place a stop below the average range of the stock to protect myself from any big losses. Once the stock moves up a little I move the stop up to break-even thus protecting myself from loosing any money on the trade. If the stock continues to move up I will continue to move my stop up and locking in more and more gain.

So there you go that is the basics of how I trade. I hope to dedicate at least a post on each key item and give more detail on how I use each indicator. I also will list my watch list and detail every trade I make and why I have made it.

As always please send me any questions or comments you might have on anything I post, I am far from perfect and love to get new ideas. This way we can hopefully all improve our trading and make a little more money!

Wednesday, April 23, 2008

I'm Back!

Its been so long since I last wrote on here and I have missed it. I hope everyone is doing well and making tons of money in the markets.

Now that the crazy tax season is over I hope to start blogging a lot more often now. I have changed up my trading plan as the markets have turned into a sideways trading market and because of this I have had to rethink my strategies and plans. I will follow up this post with one detailing my new ideas and I hope you all will comment on it and tell me your ideas.

Also just wanted to say thanks for all your support and emails trying to get me going again, I appreciate it.

Thursday, February 14, 2008

Be My Valentine

Since its Valentines day I thought I should dedicate a post to the person who I dedicate my life to. Without the constant love and support of my wife I would have never achieved even half of what I have in life. She is the most patient and loving person I have ever met. So thank you Kristen for putting up with me everyday and inspiring me to be the best I can be at everything I do.

Monday, January 7, 2008

New Years Resulotions

Hey everyone thanks for stopping by. I hope everyone had a good new year and managed to survive last weeks carnage in the markets.
Even though I am 7 days late I did want to list a few things I hope to accomplish in the new year.
1. Work on developing a concrete trading plan.
2. Work on following my own trading rules and not deviating from the rules no matter the situation. This one seems to be real hard for me as it is for most people.
3. Try to remember to through my ego out the window and just take a loss.

Well those are my top 3 goals for the new year, hopefully I can get a little more disciplined in my trading.

If you have any questions or comments on anything in my blog please don't hesitate to email me.

Tuesday, December 25, 2007

Merry Christmas!

I hope all of you have a Merry Christmas and get some rest and relaxation from the daily grind. It is days like these that I am so grateful for the wonderful family I have. Regardless of how I do in the markets and how frustrated and angry they might make me sometimes. I am grateful I have such a wonderful supporting wife and daughter to come home to.

I haven't wrote in this blog for a few months as I have been very busy with school and work, but I will be back writing every few days now that school is over.

Thanks everyone for reading.

Sunday, October 28, 2007

Graham Corp (GHM)

Hey everyone thanks for reading my blog. I hope everyone is having a good weekend. Its been awhile since I last posted on here and I apologize for that. Work has been busy and I have been studying for the Certified Equities Professional test, (CEP) for the last few weeks as well. However I thought I should get back to it and start posting more.

Today I am going to be talking about Graham Corp, a company I found while looking over the top gainers for Friday. Graham reported there 2nd quarter fiscal earnings on Friday. Earning per share came in at $1.10 compared to just $0.14 a share last year! They also declared a 5 for 4 stock split effective on November 30th. They also increased there quarterly dividend to $0.05 from $0.03.

What do they do?
Graham Corporation (Graham) manufactures and sells custom-built vacuum and heat transfer equipment to customers worldwide. The Company’s products include steam jet ejector vacuum systems, surface condensers for steam turbines, vacuum pumps and compressors, various types of heat exchangers, including helical coil heat exchangers marketed under the Heliflow name, and plate and frame exchangers. Graham’s products produce a vacuum, condense steam or transfer heat, or perform a combination of these tasks. Its products are available in a variety of metals and non-metallic corrosion resistant materials. The Company’s has two wholly owned subsidiaries, Graham Europe Limited in the United Kingdom and Graham Vacuum and Heat Transfer Technology (Suzhou) Co., Ltd. in Suzhou, China.

Fundamental Quality?
I like to rate stocks on 3 different components, the first being fundamental strength. First thing that strikes my eye is there trailing twelve month return on investment of 22.1 up from 16.4 this time last year. Another good sign is there gross margin for the trailing twelve months is up to 42.9, from 27.2 in the last quarter. That is a huge improvement!

Current Operational Trends
The second category I like to rate a stock on is what I like to call Current Operational Trends. Or more simply, how strong is a company's most recent sales and EPS growth.
One way to gauge this is by using the sales growth for the most recent quarter. For Graham its 41% increase for the latest quarter. I also like to look at the EPS growth for the most recent quarter. For Graham its a 45% increase, that is very nice to say the least.

Technical Strength
The final aspect of a stock I like to look at is, Technical Strength.

Taking a look at the chart we can see the huge gap up on earnings day to set a new 52 week high. Both the 50 and 200 day moving averages are up and very high volume on Friday. Both the RSI and MACD are both trending upwards and I see no weakness in the charts, even after such a huge day on Friday this stock should continue higher.

Based on the fundamental and technical strength of this stock I am rating it a buy.

This Stock (GHM) Is Rated A Buy

As always view my latest picks and current return at