Tuesday, April 9, 2019

Invest4Success

What is Invest4Success?

Invest4Success is my premium Stocktwits Room for select members from my 55,000 followers.

The aim of the room is to provide practical information of potential trades (breakout and #sectorbreadth) from my free Stocktwits feed.


Paid subscribers get access to this spreadsheet which has a summary of all featured trades. 

I post a subset of the featured stocks in a free-for-all Stocktwits room here.

So how does it work?

With experience I have found it's best to limit the number of active trades. So at any one time I will not cover more than 10 stocks. In any given week, there will probably be one or two new stocks for new members to follow, trade and invest.

For each trade I will offer a sample number of shares to buy depending on your account size; this factors a sustainable risk metric to prevent you from burning your account to zero.


When to Buy?

Below is a sample post from the Stocktwits room:


.
Charts are reviewed regularly and updates posted to the room. For example, Odonate Therapeutics ($ODT).


What's the Risk?

Two risk measures are employed:
  1. A set stop defined by price support
  2. A suggested number of shares to trade based on account size
Together, this will prevent you from overexposing your account to any one stock.

When to Sell?

I track all trades to an endpoint. I include some milestones for traders who want to exit at pre-determined points; for example a 3:1 risk:reward worked off the opening stop, a 10% , 15% or 25% gain, or a trailing stop hit. These milestones can be used to take partial profits; e.g. sell a third at a 3:1 risk:reward hit, another third at 25% gain, and the final third on a defined exit or trailing stop hit.

What's the Goal?

I'm looking for an annualized account gain of 15% from the stock picks. If successful, I would be outperforming the vast majority of hedge funds and the typical S&P CAGR of 6.8%. I plan to use subscriptions to fund a trading account which will feature these stocks. 

Still Interested?

Try the 14-day free trial.  Don't forget to email me to gain access to the spreadsheet after you subscribe. 


Sunday, March 31, 2019

Trading Books to Read


General Investment:

Start with “Reminiscences of a Stock Operator”; paperback runs under $20 but the Kindle edition is selling for less than $2! It was first published in 1923 but it’s a good introduction to market psychology https://amzn.to/2FN1IAT

Investors.com has a good newspaper for stock ideas (excluding the Editorials) which is supported by two books, “How to Make Money in Stocks” and “Become a Successful Investor”. The books run for under $20 on Kindle and are available here: https://amzn.to/2U6n2KE. If you want hard copies, then “Become a Successful Investor” should be bought first: https://amzn.to/2HOBujJ, then “How to Make Money in Stocks”: https://amzn.to/2UnN6Ab.  These books give a good introduction to the CANSLIM method, mixing fundamental and technical ideas and each book can be found for around $15 each, so they won’t break the bank.

Technical Analysis

I’m a big fan of John Murphy’s clear and concise writing. His book, “Technical Analysis of Financial Markets: A Comprehensive Guide to Trading Methods and Applications” is a must have. The book can be found on sale for around $50: https://amzn.to/2YBdw0t .  If you are looking for a little more then his other (harder to find) book, “Intermarket Analysis: Profiting from Global Market Relationships” looks at relationships between asset classes but there is no rush to buy this: https://amzn.to/2Wzf2hZ

I use Japanese candlesticks in my charts, for more on this all you need is Steve Nison’s book “Japanese Candlestick Charting Techniques: A Contemporary guide…” found on Kindle here: https://amzn.to/2YDe8ml or paper copy here: https://amzn.to/2WAa5Ft

The other book to consider is “Encyclopedia of Chart Patterns” by Thomas Bulkowski. What I really like about this is it gives you statistics on the success (and failure) rate of each pattern in bull and bear markets. The book is not cheap (even on Kindle) so it’s a bit of an investment: https://amzn.to/2U9c076 . If you don’t want to pay this, there is his cheaper book “Getting Started in Chart Patterns” for under $20. https://amzn.to/2WE5LoV

Bonus Material

You will have a good grounding with the above materials. If you like these style charts – good for long term price targets – then “The Definitive Guide to Point and Figure: A Comprehensive Guide to the Theory and Practical Use of the Point and Figure Charting Method” can also be considered, but this runs at $50 for the eTextbook so I wouldn’t be rushing to get this: https://amzn.to/2YNsKQi

Thursday, March 8, 2018

Who Am I?

Qualified with a B.A. (Mod) Natural Sciences II-I; Zoology - Parasitology, Ph.D. Nematology. 

Currently employed as a Dashboard Solutions Specialist, UI and UX Developer, Dashboard client solutions, training and documentation for Kx Systems.   

Seventeen-year experience as a Market Technician across financial markets; completed all three examinations towards CMT designation (final sponsorship required). 

Financial Blogger; featured on Forbes Best-of-Web & Top-20 Blogger by Instantbull.com and Finviz.com. Blog published daily, and receives a total of 11,000 Visits (15,000 Pageviews) from 5,000 Traders every month. 

@fallondpicks is Stocktwits Recommended; followed by 57,000 Traders with an additional 1,900 followers on Twitter. 

Former contributor to the Motley Fool. Current contributor to Seeking Alpha

Qualified Zoologist / Parasitologist / Nematologist. Research in sustainable methods for control of plant-parasitic nematodes and invasive insect species using antagonism and parasitism strategies. 

Graduate and undergraduate teaching experience. Former graduate committee member (2 Ph.D.s and 1 M.Sc).

Successful competitive grant funding ($241K) & peer reviewed publications. 

Former grant reviewer for U.S.D.A. (National Research Initiative and Small Business Innovation Research)

Former peer reviewer for Biocontrol Science and Technology, Journal of Nematology, Nematology, and Journal of Insect Pathology.

Specialities: Technical Analysis, Nematology, Social Media, Parasitology, Strategy Developer, Community Management, Project Management.

Tuesday, May 10, 2016

Trading on eToro Review



I have been trading with eToro for the last 3 years and have found eToro to be great way to scratch the trading itch without having to risk large amounts of capital - thanks to its finely-tuned trade ticket.  Details on how best to get the most out of eToro trade ticket I have outlined below.  At the end of this article I have included a list of (low-key) performers on eToro you should consider following or copying.

You can start by registering with eToro. I recommend starting with the minimum deposit of $200 and using the 1% risk rule of available capital; this means if your starting capital is $200, then your first trade will risk $2. So in risking $2, what is the initial position size to use?

The eToro Trade ticket will default to a standard $25 lot, with a 50%(!) stop, usually on x100 leverage. You will not want to enter your first trade this way. First thing will be to change the leverage to x1, then change your stop loss to $1 just to avoid any errors.

The short video (no audio) will show you how to use the Trade Ticket to calculate the trade size based on your chosen stop:

1. First set the stop you wish to use
2. Set Leverage to x1
3. Adjust Levarage and/or Amount until you get to your selected risk (here, $1).



The Golden Rule is to only ever risk 1% of available capital.

If you follow the Golden Rule the risk of burning your account to zero is minimal. Why? Depending on your starting capital, and by following the Golden Rule, you will reach a point where you can't put on a trade because you won't meet the minimum requirements for a trade. The one (important) exception to this is if there is an external shock to the market, such as the Swiss Franc adjustment, where there is a big gap and the market moves against your position and outside your initial risk assessment. This can lead to a greater than 1% loss, but if you manage your trade amount and maintain a low leverage you can mitigate against this, even if this means a larger than expected pain. Whole companies (Alpari UK) went down on these shocks, but your account doesn't have too.

What does the Golden Rule look like in practice?
  1. You open an eToro Trading Account with $200. 
  2. For your first trade you are allowed risk up to $2 (1% of $200).  You decide to enter a EUR/USD trade with a Stop Loss of $2. To achieve this $2 risk your trade has a starting amount of $50 and used x10 Leverage - calculated by following the steps in the video above.
  3. You next decide to enter a DAX trade, so how much can you risk?
  4. Well, your first trade tied up $25 of your starting capital, so you are now left with $175 ($200-$25). This means your next trade can risk $1.75 (or 1% of $175). Here, you take a $50 trade at x1 Leverage, with a $1.75 Stop Loss.
  5. You then consider a third trade. Well now you have $125 ($200 - $25 - $50) left in your trading account, so your next trade can only risk $1.25 as a Stop Loss (1% of $125). You take a look at the market and find no suitable trade which would allow for a $1.25 Stop Loss, so you decide to sit on your existing EUR/USD and DAX trades to see what happens.
As a helpful guide, the table below shows how much leeway you can take for a $1 risk, at different trade sizes of $25, $50 and $100, for a range of assets on eToro. You will notice for certain Leverages it isn't possible to risk $1 at certain trade sizes; for example, there isn't sufficient room based on the spread to risk $1 on a $25 EUR/USD trade at x50 leverage, but many do try to do it...



Remember, if for your first trade, the amount of capital used was $50 to generate a $2 risk, then your second trade will only risk $1.5; i.e. 1% of $150 ($200 - $50).

Start by trading assets like FX which have tighter spreads, DAX is good too, at x1 and x2 leverage and don't go beyond x 25 leverage, but always stick to the 1% capital risk rule.

Never let a trade lose more than 50% of the capital size of the trade. When you copy traders it's not uncommon to see traders rack up 300% losses, albeit on a $2 trade, but it's bad practice.

Still confused. Try following and/or copying some of the low risk traders on eToro. Below are details of my trading.


February's loss was particularly galling as January's lows marked a capitulation, which led me to enter a long stock trades, but the volatility was too high for them to survive their stops.

I would also recommend going it alone with some, if not all of what you deposit. For those who want to go it alone, you can follow my postings on Stocktwits or Twitter for ideas and independent opinion.

Here are eToro traders with solid two-year performance on low risk. Don't be concerned by the lack of copiers for these traders, they are doing things right - away from the limelight:



Be Realistic...

You are not going to achieve 10% or 25% gains a month; if you achieve 10% a year you will be outperforming 80% of professional traders and hedge fund managers.  For a $200 account that is an annual return of $20. This may not be much in real terms, but if you can achieve this and want more, then look to increase your available capital to trade - but don't look to increase your risk. eToro regularly run Deposit Bonuses for new and existing members throughout the year.

As a final note, do not copy anyone who promises or sells to you a return on a monthly basis. That's pure BS which will see your account turn to $0 in weeks.

Remember - Golden Rule - 1% of available Capital.  No cheating!!!

Now Go Get Started Here.


Wednesday, December 4, 2013

How to use my Stock Pick List

I keep a running track of my breakout scan as a delicious bookmark list. You can take this list as a feed, directly follow it on delicious, or follow me on Twitter or Stocktwits to get the stocks as they are posted. I also maintain a tumblr featuring some of the charts of stocks on the list.

The list is a watchlist of opportunity for stocks making new highs on volume.  It's not meant as a direct 'buy' list, although some stocks may feature which offer low enough risk opportunity, to take the leap on the next open (at the right price). 

I like to look back at stocks which triggered 2-3 weeks ago. I'm looking for stocks which have retained the bulk of their gains, but where the volatility has dropped - facilitating a low risk entry.  I also like stocks that don't violate the breakout gap (if any). 

For example:

If we take the stocks which featured between Nov 13th - 20th we have the following list:

Nov 13: M, PEGA, ELOS, TPH
Nov 15: GIB, CREG, FNMA, TTEK, FMCC
Nov 18: ASX, A, LFC, CVV, FONR, GFF, HCSG, HMIN, MJN, CAF
Nov 18b: AEC, KIRK, FONR, ASX
Nov 19: ADP, AWRE, HOLI, POZN
Nov 21: BONT, CSII, GPT, YZC

We can then collate this into a Watchlist. I do this for charts first, but it's also handy for building an alerts list in Zignals

This gives a summary which looks like this:



From there, it's a question of eyeballing opportunities.  

In the above list, interesting stocks include: BONT, CAF, CSII, CVV, GFF, HMIN, KIRK, MJN, PEGA, and POZN

At this point, you can use Zignals Stock Alerts (Zignals HTML5 is due to launch in February 2014, and will include Technical Alerts) to set the triggers for entry/stop protection, or eyeball on a chart during market hours for movers. 

**Use all information provided at your own risk**

BONT:  Very tight action. Stops on break of $17.50. A move above $18.00 would probably be enough (on at least 20K shares in a 15-minute period).  It's illiquid, and the initial breakout turned into a +$6 gain from $12s. A push to $20-22, where it traded in the summer, does not seem outlandish.  

CAF: Stop on close below $23.50, although I would let an initial intraday break of $23.50 slide as there is likely to be lots of preset stops down here which could be knocked out for a cheap entry (both 20-day and 50-day MAs are below to provide support). A move above $24.50 offers a $26.50 initial target. 

CSII: Moving up in gap-steps. Stops can go on loss of $32. A close above $34 should be enough to see this push higher. Target of $40. If there is a downside, it's that technicals suggest it may take longer - and base deeper - before moving higher. A move to close the gap would not be ideal, but GTC-Buy order fishers could try and net some in the low $31s, with a stop on break of $29. A Zignals alert is ideal for the latter set up. 

CVV: Maybe still a little too volatile. It has shaped a $12.50-14.00 range which offers entry on break above, protective stop on drop below. However, past few days suggest it could venture into the gap and touch $11.50. Technicals also look to point to this.  If it dropped below $11.50 it would lose the base set-up, so consider $11.50 the last-chance saloon. 

GFF:  This is the kind of stock buy-and-holders should like. It's not going to do much day-to-day, but over time it could reward you.  Wouldn't want to hold as a trade below $12.25, but if you were looking to accumulate over time, then this looks like a stock to consider. 

HMIN: Much more of a trader's play. Great volume action. A solid looking support level at $38. Yesterday was a first attempt at getting past $42 since the original breakout trigger. Technicals in good shape.  The Santa Rally contingent could see joy here. Look for a move to $48. 

KIRK:  A similar proposition to BONT. A near $9 move from $17s has tightened considerably. A pop above $26 could see a big short squeeze.  Potential long term buyers would want to see a new base form (of 2-3 months duration) to consolidate these big gains.  Day traders can be less picky on this. 

MJN:  Lacks the buzz of a HMIN, but bidders seem keen to get this into the high $80s. It doesn't look like $82 is going to see a test, so stops could go on a loss of this price (which is also below the 20-day MA).  Big uptick in accumulation and bullish technicals. A sleeper bull play. 

PEGA:  This is more an example as to what we want to see happen in the above. November's big gap consolidated into very tight action, before it took another push higher - taking the stock above the psychological $50 barrier.  This $50 zone is again getting tested, this time from the top, in tight action. If there is a concern, it's that a close below $50 would generate a 'bull trap'; effectively trapping the people who bought the push from $48 to $51.50. This kind of action is the downside risk to watch in any of the plays listed here. For a stock like PEGA, a 'bull trap' offers a swing traders short-play to fill the gap down at $42. Risk for a short is on a move above $51s. Such counter plays can be more attractive than the initial long play, and should be viewed as alternatives if the initial long position goes against you (and not try and convince yourself the long-side is the right-side to be on).  

Even if your preference was to play the long-side, a scramble to the exit style sell off could see you pick up a bargain using GTC-buy orders/alerts. In PEGA's case, $40-42 should be significant support. 

POZN: Another stock in the KIRK, HMIN set up. A big move higher, followed by a tight consolidation at the highs. Also lacks liquidity. A break above $8 sets up an opportunity for a measured move to $11. Technicals and volume firmly in the bulls camp.  Once it's looking like the stock will close above $8, stops could be adjusted to a loss of $7.75. 

If all of this sounds like too much work, I also maintain a tumblr blog of stock charts I come across. 

Please visit my parent blog, which keeps track as to what the broader market is doing, and identifies sectors which may be of interest to traders.

All of my content can be found in my Twitter/Stocktwits feed, including content on Biotechnology stocks I do for the Motley Fool. I recommend a follow if you like what I do. 


Sunday, September 1, 2013

Visit markets.fallondpicks.com

I have this as a holding page until I figure out what to do.

In the meantime, visit my blog at markets.fallondpicks.com