Take things slow and easy and try to gain experience and knowledge from each new trading day.
This reminded me of a quote I once read comparing a person with one year of experience with another with 10 years experience. It turned out that the guy with one year of experience was much better at his trade as a result of continually learning and developing his skills. The guy with 10 years experience was found to only really have one day of knowledge that was forgotten and relearned each day for 10 years!
It might be a good time for us all to reflect on what, if anything, we learned today. If you can't think of anything, then you probably didn't learn much! I must confess, I'm having difficulty thinking of anything myself. Maybe I need to start a traders journal as Steve suggests.
Probably my biggest learning experience today was finally learning the details of the "Turtle Soup" setup that I have heard mentioned by so many people. It is all explained in the book, Street Smarts(expensive, ~$120), which I would highly recommend from my preliminary review. Let me share what I learned about the Turtle Soup setup and perhaps others will pass along some piece of knowledge that they picked up today as well.
The "Turtle Soup" setup was named after the traders trained under Richard Dennis. These students were called the 'Turtles'. They all used momentum systems whereby they bought securities (actually, futures) as they were making new 20 day highs. Unfortunately, while profitable over the long run, these setups often quickly reversed and caused frequent small losses. => Thus the name Turtle Soup was coined.
To profit from this frequent occurrence, the Turtle Soup setup waits until a stock reaches a new 20 day high. Note that the prior 20 day high must be a minimum of 4 days old. Once new high ground is crossed, you wait for the stock to reverse (on the same day) and trade back below the previous 20 day high by at least 1/8 point. This is your trigger point for entering a short position. => The idea being that this must have been a 'false breakout' since it didn't follow through to the upside. Therefore, the stock will likely head lower... Anyway, the reverse can also be done to enter a Turtle Soup long position after a failed breakdown below a 20 day low.
All together an interesting entry system. I'm going to program it into the Pristine ESP package as an additional alerting strategy. Maybe as I learn more about it, I'll be able to implement this strategy successfully.
Anyway, have a great weekend and keep on learning from and sharing with others.
-Eric
P.S. After you scratch your heads for a while, I'd like to challenge everyone to share something you may have learned recently. Nothing dramatic needed, just any tiny piece of knowledge that you may have picked up and would like to reinforce by sharing with others. |
