Followed the ETDE, got in for 100 shares at 16.04 and then 100 more at 16.33. Stock topped at 16.50 odd and reversed, had a high of 16.65 for the day. The play was to sell at over 16.50 but I got greedy and I think there is more in it. Etrade is being put on the auction blog by their largest shareholder Citadel. Buyout premiums run around 20-30% and there are alot of buyers for brokerages (in my mind). This adds the possibility that I am trying to be right, as I have held this overnight. I’ve had some success with merger plays in the past. M&A talk brings a different kind of action to a stock, for starters it gets pinned to where it was trading before the speculation, so if the market goes down it will be resilient as there are buyers establishing positions and so many hedgies who run merger arb funds that even if it’s not a good bet, there will be someone who thinks it is. I don’t really want to be holding things overnight so I will try and not hold it for too long.
Tuesday 26 July
Etrade trade still going, opened at 16.50 and never got higher, didn’t spend much time in the loss zone.
Got into NOV at 55.59 as i thought it was being locally rangebound and poised for a higher move. Got out at 55.29, briefly thought about getting short since the tape looked bad and a retracement is an option after a gap up and a large upmove but it moved into the low 54 range quickly. NOV closed in the high 52 area… coulda woulda shoulda
I found this an interesting post about psychology for developing traders, although I think that consideration of how much you really can make it could be a good way to push you towards higher goals.
I saw a blog post today that argued that reading lots of trading books is not a good idea, making the salient point that they will mislead a novice trader. I disagree, I’m on the side that one should be able to filter out garbage without having any domain knowledge. If they lead you down the garden path then you are going to struggle without them. As always, don’t follow anything/anyone hook line and sinker.
Howard Lindzon and http://www.pragcap.com had a “discussion” about trading real money v paper trading. They basically agreed with each other and then cross promoted their blog posts, confusing. They say that you will only learn real trading by really trading, insightful…
I say paper trade in order to feel comfortable operating in the market or until you have the money. the 25k margin T requirement weighs heavy on people without full time jobs, but the fact is if you turn up and say these are my paper trading records you have to know they would have been easy to fake and that psychologically you treat money different from pretend money.
tradefornyc 