Sunday, June 24, 2007

Stock picks for Monday June 25, 2007

The Dow Jones index ( ^DJI ) is dangerously close to the 50 day moving average.

If the Dow Jones Industrial Average Index goes below the 50 days moving average, we shall assume that the trend has turned bearish and concentrate more on finding stocks to shorts.

Here are some stock picks ( Both long and shorts)

DREAMTAI Software Daily Report

as of : 2007_06_24

Stock List sorted by Power Rankings

Legal Note: For Education and Entertainment only

Please do more research before placing buy or sell orders
Usually stocks with Power ranking above 3 have a strong uptrend
Usually stocks with Power ranking below minus 3 [-3] have a strong downtrend

Usually stocks take support at 20 day moving average and 50 day moving average
Then either they resume their trend or crash through the Averages. Do not ignore the 20 and 50 day moving averages lines

Please... please... please... please... do not risk MORE THAN 2 percent of your capital on ANY SINGLE trade... THANK YOU!!

Stock Ticker Name	Power Ranking	Last Closing Price	Strategy	New Buy New Sell
NVDA	8.98	43.62	BUY 41 shares at 43.89 Put Protection Sell Stop at 39.03 First Profit Target=48.75 Total Investment=1799.49
EXPE	8.76	29	BUY 48 shares at 29.2 Put Protection Sell Stop at 25.09 First Profit Target=33.31 Total Investment=1401.6
DO	5.9	107.13	BUY 23 shares at 107.31 Put Protection Sell Stop at 98.87 First Profit Target=115.75 Total Investment=2468.13
RIG	4.97	109.2	BUY 29 shares at 109.22 Put Protection Sell Stop at 102.46 First Profit Target=115.98 Total Investment=3167.38
SLB	4.81	89.2	BUY 34 shares at 89.22 Put Protection Sell Stop at 83.4 First Profit Target=95.04 Total Investment=3033.48
GW	3.56	8.6	BUY 370 shares at 8.62 Put Protection Sell Stop at 8.08 First Profit Target=9.16 Total Investment=3189.4
NE	3.44	98.75	BUY 49 shares at 98.84 Put Protection Sell Stop at 94.83 First Profit Target=102.85 Total Investment=4843.16
GSF	3.36	73.7	BUY 68 shares at 73.79 Put Protection Sell Stop at 70.89 First Profit Target=76.69 Total Investment=5017.72
^DJI	-0.03	13360.26	SELL 0 shares at 13359.67 Put Protection Buy Stop at 13735.1 First Profit Target=12984.24 Total Investment=0
USB	-0.97	33.42	SELL 180 shares at 33.36 Put Protection Buy Stop at 34.47 First Profit Target=32.25 Total Investment=6004.8
RF	-1.85	33.52	SELL 157 shares at 33.44 Put Protection Buy Stop at 34.71 First Profit Target=32.17 Total Investment=5250.08
SBUX	-4.1	25.54	SELL 78 shares at 25.48 Put Protection Buy Stop at 28.02 First Profit Target=22.94 Total Investment=1987.44
SEPR	-5.35	42.91	SELL 55 shares at 42.8 Put Protection Buy Stop at 46.42 First Profit Target=39.18 Total Investment=2354

NVDA
Go to Top

EXPE
Go to Top

DO
Go to Top

RIG
Go to Top

SLB
Go to Top

GW
Go to Top

NE
Go to Top

GSF
Go to Top

^DJI
Go to Top

USB
Go to Top

RF
Go to Top

SBUX
Go to Top

SEPR
Go to Top

Sunday, June 17, 2007

Question by Rajesh

From Rajesh:
Dear Sanjoy, Pl send me the best book for trading for Indian Stock market Conditions

Answer:
Hi,
All the stock markets regardless of which exchange they are traded in, behave the same because the underlying human emotions - fear and greed

One of the books I like is :

"Trading for a living" by Dr. Alexander Elder.

It stresses the importance of risk management. Many people think that position entry is the most important aspect of a trade. Actually it is just one of the aspect. How you size your positions, how you manage risks and how you exit from a trade, your psychological state of mind, your discipline all factor to determine whether you will be successful trader or not.

At present I am reading the book
"Trade you way to Financial freedom" by Van Tharp.
(See the review in the article just below this one )

In that book, he makes entry into a trade by a Random trading system...that is the system just enters randomly..but still manages a positive return by risk control and position sizing.

Using Dreamtai system, we enter trending stocks with high liquidity. We manage our risk to less than two percent of total capital and position size our trades to reflect that.

Another book I love is "Market Wizards" by Jack Schwager
It gives interviews with top traders. If you read that, you will notice that many of the traders stress more on risk control than on any other secret systems or formulas.

Hope you find this information useful.

Sanjoy

Sunday, June 10, 2007

Prasan's Choice book

Our DreamTai member Prasan recommends the following book :

PRASAN : "One book I would recommend for the fundamental traders is " Frank Cappiellos's New Guide to finding the next superstock
It should be in all traders library." .

Book Review: Trade your way to Financial Freedom

Here is a reviw of an excellent book I have read recently.
The book name is "Trade your way to Financial Freedom" by Van Tharp.

From the book's title, it sounds like a typical get - rick - quick "How to make millions in a month" type book

Actually, the book is quite informative and interesting and is meant for serious investors.

The main focus of this book is on developing your own trading system, discipline and risk control.

May investors are looking for the Holy Grail....that secret entry technique ..that exact point at which the market will turn in their direction. They neglect other parts of a trading system as setting risk management, setting stop losses, deciding when to exit and how many shares to buy or sell.

He shows with examples, that it does not matter what system you use, - fundamental analysis, swing trading, scalping, following news letters, but as long as you have proper risk control, you can have positive returns in the market.

This book is filled with sound trading ideas.
In short: I recommend that you buy it, study it and implement the ideas given in this book.

Read the ideas about position sizing: that is, you vary the amount of shares to but or sell depending on the risk.
In DreamTai, we employ position sizing to keep risk less than 2 percent of the capital.

Short Selling Stocks

Here are some really good articles about shorting from Trader Mike blog

1. The Very Basics of ShortSelling

2. How to make Money selling stocks Short

If you have read our Stock Kisses article, you will remember that if a stock goes below 50 days moving average line ..that is the pink line in DreamTai, then it is an ideal candidate for shorting

Stock Kiss Article 1

Stock Kiss Article 2

Saturday, June 09, 2007

Risk Control and Monkey Behaviour

One of the most important aspect of trading is Risk Control.

No matter which system you use, you must be able to control your risk.
Sometimes, it becomes very tempting to bet the farm on a trade that looks like it is going to win big time.
At this time, you have to control your instincts. The ideal amount to risk in any trade is maximum two percent of your capital.

Here are some interesting articles about monkey behaviour which leads us to wonder about human behaviour and how we can use the "herd behaviour" and profit in trending stocks.

Gambling Monkeys Compelled by Winner's High

Ancient Behaviors Hard-Wired in Human Brain

Monkeys Pay to See Female Monkey Bottoms