One of the most important aspects of trading is keeping a log of your trades. The amount of work involved with tracking data can be overwhelming. Google Spreadsheet is a great solution since you can access it from any where. The interface is easy to use and you can embed Google Finance functions. These functions will grab today’s stock data or historical data. Let’s cover the basics on building out a trading log:
First we want to add the headers to the document: Date, Symbol, Purchase Price, Current Price, Change, Total Shares, and Gain/Loss.
After you have added your headers, Freeze row 1 by going to the View Menu and click “Freeze Rows: Freeze 1 row” from the drop down menu. This prevents your headers from moving off the screen when your log begins to grow.
Now with the headers set, it’s time to review a few of the basic Google Finance Functions.
To get the Current Price of any stock: =GoogleFinance(B2 ; ʺpriceʺ)
Just like excel you can reference the Cell that contains the ticker symbol. In this Case B2 which is “CSU”.
To get the Open Price of any stock: =GoogleFinance(B2 ; ʺpriceopenʺ)
To get today’s volume: =GoogleFinance(B2; "volume")
To get today’s high: =GoogleFinance(B2; "high")
To get today’s low: =GoogleFinance(B2; "low")
To get a historical price use: =INDEX(GoogleFinance(b2 ; ʺpriceʺ ; ʺ3/25/2013ʺ) ; 2 ; 2 )
Once you’ve inserted the Google Finance functions you can use a few basic formulas to calculate Change and Gain/Loss.
To calculate total change: =D2-C2
Total calculate Gain/Loss: =E3 * D3
Google spreadsheet is easy to use and the integration with Google Finance is a big plus. You can access your spreadsheet from any device across the internet. If you have not started that trading log, now is the time. Below is an example to help get you started.
You can find the complete list of Google Functions here.
We've been quietly sitting on the sidelines while the market works through this range. During this time I've been working on a few tables that slice and dice our existing data sets.
Listed below are industries ranked by percent of stocks with an earnings thrust in the past 90 days. The industry needed at least five tickers to be included in the list. Click the link to see a breakdown of stocks within the industry.
|Home Furnishing Stores||42.86%|
|Healthcare Information Services||40.00%|
|Catalog & Mail Order Houses||33.33%|
|Industrial Equipment Wholesale||33.33%|
|Publishing - Newspapers||33.33%|
|Semiconductor- Memory Chips||33.33%|
|Staffing & Outsourcing Services||30.77%|
|Discount Variety Stores||30.00%|
|Housewares & Accessories||28.57%|
|Specialized Health Services||28.57%|
|Internet Information Providers||27.08%|
|Textile - Apparel Footwear & Accessories||26.32%|
|Lumber Wood Production||25.00%|
One of the biggest challenges in trading is to narrow your pool of stocks to a number that is more manageable and tradable. In Bluefin, we use things like fundamentals, relative strength, volume, and sector to weed out the weak from the strong. You can add another layer to this by applying a Bollinger bandwidth scan to find stocks in a consolidation. During any given week a handful of stocks will rest after an initial thrust, setting up for the next leg.
Bollinger Bandwidth is the difference between the upper and lower Bollinger Bands divided by the centerline of the Bollinger Bands. As a stock moves sideways the bands contract and the value is smaller compared to a stock that just had a large move where the bands have expanded.
In charting software such as TC2000, you can apply this indicator to your chart and then sort your watch list on the results. Below are instructions on how to apply this filter to your watch lists.
Xcel energy is the ideal pattern we’re trying to find. The stock was in an uptrend, consolidated for a week or more. We want to catch it as it moves above that consolidation.
1. First click “Add Indicator” found on the chart pane in TC2000. Once the “Select Indicator” dialog box appears, type “Bollinger” into the search field to narrow down the results. Click “Bollinger Bandwidth”.
2. The Bollinger Bandwidth indicator will be added to the bottom of your chart pane.
3. Click the title “Bollinger Bandwidth” and select edit to bring up the Edit Bollinger Bandwidth dialog box. Adjust the Period to fit your timeframe. I like shorter time frames so I use a 10 day period. Many traders use a 20 period. Play with it and see what results work for you.
4. Click the title “Bollinger Bandwidth” again. Now, click Show values in WatchList.
5. The column should appear in your watch list pane. Click the column header “BBandW 10 2 Daily” to sort the list from lowest to highest.
Finally, just tap the spacebar to toggle through each chart. Stocks in tight consolidations will appear first.
No scan is perfect, but hopefully this article will give you a way to find consolidation patterns quicker and easier.
We've seen a breadth flip to a sell signal on the BPNYA renko chart confirming the selling this week. Take this time to review your trades and see where you could of done better. Give yourself a pat on the the back for the trades you executed to plan.
If you follow Twitter, Stocktwits, or any other A.D.D. driven social media, you’ve probably seen ‘I own this, but don’t chase here’. What a kick in the balls eh? You feel like a total idiot because you didn’t catch the stock while this other genius brags about the money he’s printing. Suddenly, you tweet back “I own it too!”. What the hell just happened? You knew the stock was extended, the guy even told you not to chase…but your fingers took over and entered a buy order.
Lately, quite a few stocks have had significant moves past their reasonable buy point. When the market is in an uptrend and breadth is supporting the move, your cat can look like a super trader. When market breadth begins to deteriorate, that’s when the bad habits will come back to bite you. In an effort to help those who can’t or won’t recognize an overbought stock, below are a few examples of reasonable entry points versus chasing.
The next time you see some guy bragging about his latest big winner follow these steps:
1. Take a deep breath.
2. Bring up the chart.
3. Ask yourself “Is there a better entry in the past 5 days?” If no, you’re good to go, otherwise you should just let it go.
The best way to avoid chasing stocks is to refine your skills in identifying the best entry point. If your using a tool like Telechart apply a relative strength scan (C / C252) to all common stocks and sort from highest to lowest. This will give you a list of high flyers to browse and identify the lowest risk entry point. You can even do it across different time periods using the Custom Date Sort function. Increasing confidence in your own ability will make you less likely to chase that next tweet. Good Luck.
Over the past 30 days, Home Construction and Home Builders have outperformed. Listed below are the components that make up each ETF.
ITB - iShares Dow Jones US Home Const.
XHB - SPDR S&P Homebuilders (ETF)
With the market sitting in overbought territory, it’s been a bit tougher to find some pristine setups this weekend. Below are a two stocks that broke out last week and spent the rest of the time absorbing the move. If we see more upside in the market this week, they may offer an opportunity on the follow through.
Domino's Pizza, Inc. (NYSE:DPZ)
Sirona Dental Systems, Inc. (NASDAQ:SIRO)
The market started off the year with some heavy buying with 659 stocks up four percent or greater compared to 34 down. Most breadth indicators are sitting in over bought territory, focus on stocks breaking out of a consolidation and avoid over extended stocks.
With yesterday’s breakout small caps lead the pack with a 5.38% gain over the past month. The Nasdaq 100 is trailing the Russell at 4.02%.
Price has been consolidating on the Russell since Nov 29th. We're seeing mixed signals across our breadth indicators with a few in buy signals while others sitting in sell signals. Follow through on breakouts has been low. A defensive stance is the best option until we get a move in either direction. Watching 827 and 815 on the $Rut.
Heavy selling today with over 400 stocks down on the daily breadth indicator. Lack of follow through to the upside has been the primary symptom of this market. Cash remains king.
The market put its first brick in place in forming a new uptrend with 306 stocks up four percent or greater. With most of our breadth indicators in a sell signal, we need to see some more follow through.
Not everyone can monitor the market on a tick by tick basis and jump in and out of securities at the markets’ whim. Actually, most people probably fall into this category. How many times have you walked into that meeting only to come out an hour later to see that breakout you bought sunk back below your entry point, way below. Life just gets busy.
If you’re in this boat, maybe basket trading is a better approach. Think of a basket of stocks as your own Micro ETF. A smaller pool of stocks working for you based on your own criteria and investment allocations.
First you decide on a timeframe; weekly, monthly, quarterly. It’s up to you on how active you want to be in managing your basket. Next, you select a list of stocks based on criteria such as earnings, sector, momentum rank, short interest, or any other attributes you’re looking for in a group of stocks. Then you decide on how you want to allocate funds across those stocks; fixed dollar amount, percentage, or equal number of shares are just a few examples. Finally, you prune and add stocks based on your selected timeframe. For instance, if you want to manage your basket on a monthly basis, you could sell all positions on the last day of the month and create your new basket on the first day of the month. Are you one of those people who hate to take profits and never take a loss? This type of method would help force you to take those gains and cut your losses.
This method is not totally hands free because you do need to add some rules to protect against any catastrophic losses. Distributing your money across a pool of stocks will help, but you still need to plan for any individual position moving significantly against you. Adding a max 8% loss rule would protect you. For example, you are holding Stock A in your September basket. On September 14th it drops 8%. At this point you would sell the stock. You do not immediately replace that stock but wait until your basket reallocation on the first of the month.
On the flip side, you may want to add a profit taking rule. This time Stock A releases some positive news on the 14th and is up 20% for the month. In this case, you could have a ‘take 50% off’ rule where you sell half the shares at 20% and hold the second half for the rest of the month. You can make these rules as complicated or simple as you like. In the end, it comes down to how much participation you want to have in managing the basket.
Two of the brokerage services I use offer basket trading enhanced functionality.
Fidelity will let you create a basket and monitor the entire basket as a single entity.
Fidelity will calculate total shares to be allocated for each stock based on your chosen method of distribution and total dollar amount. They also have a watch basket function that will let you assign a specific purchase date for that basket. You can even run multiple baskets side by side.
Ameritrade users need to go to the Portfolio Planner found under the Accounts tab. From there, click “Develop a Target Allocation”. Once there, click “Basket of Securities” on the top right.
Once you’ve selected your securities, you will assign target percentage allocations for each. You will then be able to automatically set orders based on those target allocations.
Ameritrade even offers and option to turn on or off margin usage:
When your allocations are set you can monitor your basket through the portfolio planner.
Most brokerage services offer some type of basket capabilities with their service. Normally, a quick search for “basket trading” should get you to the help documentation for your brokerage.
Overall, basket trading gives you a way to build and manage your own Micro ETF. Allowing you to take a hands off approach to the market while letting you allocate your money across a highly focused set of stocks built on your own criteria. Adding sell rules protects your gains and limits your losses which will help you to outperform the indexes over time.