MOJO Day Trading is quickly becoming a name on Wall Street for stellar stock picking and trading education. ProTrader Mike will show you exactly how to become a profitable stock trader even if you're an beginning trader. The blog contains valuable information for both day and swing trading styles. Main Website = www.mojodaytrading.com
There are one or two big breakout winners every day, but how do you number find them and how do you get into them as they are breaking out and before they make a big run up.
Well I will give you one of my secrets. I trade with Alerts & Triggers. For example on this DNDN trade below - I set my system to alert me when DNDN reached a Level 1 bid of 4.90 or greater. At that mark my system triggered a buy order of predetermined shares I set in the alert. I instantly was long. The reason I set the alert was DNDN tested 5.00 earlier in the week and sold off. I knew it would retest that and go thru. Just a matter of when. So instead of watching it all day - I watch over 20 stock setups - so it's impossible to watch all 20 I set up an Alert & Trigger - I then averaged up on DNDN after it broke 4.95 and bought more at 4.98 - selling at 5.10 - DNDN followed thru to 5.50
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By Cecile Vannucci and Liz Capo McCormick - Sep 14, 2012 12:22 PM ET
Investors are boosting options and futures wagers based on U.S. equity-market volatility to a record to protect gains after the Standard & Poor’s 500 Index jumped to an almost five-year high.
The number of futures on the Chicago Board Options Exchange Volatility Index, or VIX, has more than tripled to 411,407 this year, according to data compiled by Bloomberg. Outstanding options on the gauge, which tracks the cost of insuring against S&P 500 losses, has more than doubled to 7.48 million in 2012. The level is close to the peak reached last month.
“It’s a newer strategy, people aren’t as familiar with it,” Paul Britton, chief executive officer of New York-based Capstone Investment Advisors LLC, which manages about $1.7 billion and focuses on volatility trading, said in a phone interview. Photographer: Jin Lee/Bloomberg
Investors are turning to securities based on volatility to hedge against losses after the S&P 500 surged 16 percent this year, putting it on track for the biggest annual gain since 2009. Funds that bet on market swings attracted almost as much cash in the first six months of this year as in all of 2011, data from Hedge Fund Research Inc. show.
“Volatility has become more attractive now as an asset class,” Nikolaos Panigirtzoglou, JPMorgan Chase & Co.’s European head of global asset allocation said in a Sept. 12 phone interview from London. JPMorgan has $2.3 trillion in total assets. “When you have a crisis, volatility spikes. So buying volatility provides a generic crisis hedge. VIX (VIX) futures and options open interest has increased sharply as hedge funds have become more heavy users.”
Volatility Trading
Investors are using options to buffer against losses in other assets. In the strategy, known as volatility trading, fund managers buy the contracts to improve the odds that the value of their fund will be preserved during a market rout. When the S&P 500 plunged 38 percent in 2008, the VIX soared 78 percent.
About $874 million was added to volatility funds in the first half of the year, according to data compiled by Chicago- based HFR. That compares with inflows of $914 million for all of last year and withdrawals in 2010 and 2009. Investors poured $1.35 billion into the investments in 2007, the highest since the start of the data in 1990.
“It’s what I call a bull market in fear,” Christopher Cole, founder of volatility investment-management firm Artemis Capital Management LLC in Santa Monica, California, said in a phone interview. “There’s a tremendous amount of shock risk between deflationary events and the unintended consequences of the actions of global central banks and policy makers. As long as these issues remain unresolved, investors will continue to bid up volatility.”
Fed Stimulus
The U.S. Federal Reserve said yesterday it would buy mortgage-backed securities, adding to the $2.3 trillion of stimulus that the central bank committed to spur growth in the world’s largest economy. The HFRX RV Volatility Index, which tracks 40 funds that bet on stock swings, climbed 4.8 percent this year through the end of July. The broader HFRX Global Hedge Fund is up 2.7 percent in 2012. Volatility is a small part of the fund industry, with inflows this year accounting for 4.3 percent of the $20.4 billion added to hedge funds during the first half of this year, HFR data show. “It’s a newer strategy, people aren’t as familiar with it,” Paul Britton, chief executive officer of New York-based Capstone Investment Advisors LLC, which manages about $1.7 billion and focuses on volatility trading, said in a phone interview. “If we can educate people on the matter, then we have a chance to make them comfortable with the asset class, and where it would fit in with their overall portfolio.” Volume Drop U.S. options trading is poised for the biggest annual drop since 1988. The number of contracts changing hands fell 13 percent to 2.70 billion during the first eight months of 2012, according to data compiled by Chicago-based Options Clearing Corp. Should the pace continue, that would mark the second- biggest drop since OCC data began in 1973. The VIX slid 11 percent to 14.05 yesterday, the lowest level since Aug. 20. That’s 31 percent below its historical average of 20.50 since 1990. It rose 2.4 percent to 14.38 at 12:20 p.m. in New York today. The European counterpart, the VStoxx Index, a measure of Euro Stoxx 50 Index option prices, lost 10 percent to 21.11. The number of shares outstanding for exchange-traded funds that profit from volatility gains in U.S. stocks has also increased. Shares of the Barclays Plc’s iPath S&P 500 VIX Short- Term Futures ETN, the biggest of the securities, jumped almost nine-fold this year and touched a record 192 million on Sept. 7, data compiled by Bloomberg show. “People are fundamentally worried about uncertainty,” Kathryn Kaminski, chief investment officer at Alpha K Capital, a fund of hedge funds, said in a phone interview. “More pension funds are starting to wake up to the tune of either selling vol or getting involved in vol, which means that this space has a lot more growth potential for the next few years.”
Wondering why Protrader Mike is #1 on StockTwits.
SOMX – picked at .28 cents sold next day in AH at .62
REED - picked at 4.05 traded to 6 in a week
SWHC – picked day before earnings at 9.14 sold 10.72 in AH and 11.00 next day
VXX – picked 2 days ago at 9.25 traded to 10.00
EGHT – picked up today at 6.11 sold 6.34
CTIC – picked up this morning at 3.00 sold 3.24 went to 3.55
And so many more….
Two weeks ago, I set up a group on Skype – just a few people that follow my trades. I got to know little about each by speaking to them on the phone. After that they joined me on Skype which I am on during market hours. I started a Trading Group. I give them the buy entries with share amounts to buy, stop losses that are in effect and profit targets which can be raised or lowered depending on how that stock is acting in the level 2. I tell them how to sell to on the offer in pieces when it runs and how to be strong and buy when it sells off. Most importantly are the losses which I control and try not to let you get caught in a bad trade. Bankroll management is very important and there are many rules in place with me.
The goal is to make (depending on the size of your account) $500 to $1000 everyday.
The best part for these guys is they get to actually see my computer screen and me live trading during the day. The actually see it happening as I am chatting about it. Once in the stock, we all cheer it on and it’s fun because I hit many winners. I cut the losers and try for my singles and doubles. No homeruns for me. Occasionally I do hold one or two for swing trades as I continue to build position in the stock, but for the most part 95% time I am flat at the end of the day. I did hold a few thousand PPHM at 4.45 when it closed up on 25MM shares. Sold I next morning up .40 cents.
If you are interested in joining my chat group just send me an email to richlender@gmail.com and I will give you details on how to trade with me.
$ALXA - this one could be the one Tuesday - it's on the top of my radar looking to buy at 4.85, 4.89, 4.94, 4.98 - start selling 5.10 to 5.50 - next day goes to 6.00
