Robert Weinstein Trading Blog

Hi Robert,

Like your approach..Any views on LVS..I feel it is still a cheap buy but getting mixed views..interested in your view Read the rest…

Hi Robert,

I’ve been following your posts on P&L and i’d like to congratulate you on good performance. Keep it up.

You seem to be a good trader so i’ll allow myself to ask you a few Q’s if you don’t mind;

I’ve been trading for about 5 months now. Been doing relatively well. I was flat for my first 3 months, made 30K on my fourth and am at slightly less than 15K for this month. Problem is I’ve been getting shakin out alot this month, more so than i’d like, and so i get in/out of positions way too much and end up feeding commissions and ECN fees galore! Over 75% of what i’ve made this month is gone to ECN fees. That is simply killing me.

How do you manage not overtrading/getting shaked out?

Do you trade ALL day?
I’ve been really thinking of trading the morning only and leaving my trading station afterward….it’s just easier said than done. But if did do that, my ECN fee’s would be atleast 50% lower than where they are now.

Any feedback would be appreciated….

Many thx for any help,

Be well

——–

Hello,

RW

Hi Robert,

Can you tell me what software you use with IB to do your trades?

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You posted: AFG gapped up in a very strong over the top way and I became very aggressive in capturing as much of the anticipated move down as I could. I Sold on the bid and kept pressure on with the ask.

What exactly do you mean by that?

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Hi, Bob.
Nice numbers lately.  Just a quick Q.
Just wondering if you used many of DeMark’s indicators in your trading.
I agree that market making is the way to go.  It is what my API is based on, but it has been so slow lately, I thought I’d look into other areas.
Good trading.  Jeff

Hello Jeff,

Thanks for the kind words.  Like so many I used the ideas and concepts of Tom DeMark to provide a new way at looking at the market.  So many look to buy value when prices are low or short when they think prices are overvalued.  Others use trend following to find their entries.

Any method has the possibility to be profitable if done right.  I have taken the concept of overbought and put it into a formula that a computer can scan for and alert me when the result is TRUE.  Basically its a mechanical trading system.

I don’t actually use any of his indicators and feel that right out of the book they are not effective.  They need to be adjusted to work (I do think they can work).  I also think that by spending the time with Tom  Demark’s books will greatly improve your trading and give you new ways at looking at the market.  Mr. DeMark is also from Wisconsin so he can’t be all bad either  : o )

I just read you article on oil prices. Is there a reason you prefer to trade the USO instead of OIL?

While I am setup to trade the electronic mini oil QM and the full contract CL I choose to trade USO because the lower contract size allows me to scale in and out more precisely and at an overall lower cost.  My cost to trade stocks is an average of about .0015 per share (less than 1/5 of a penny per share) and I pay 75 cents per option contract.

When actively trading we deal with small (+/-) edges that add up over time in many ways like a casino.  It is my belief that for me using USO to trade oil gives me an edge over the futures contract.

Glad to see you were able to lighten most of you SQNM without too much pain.
Two questions from this SQNM trade:

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Hello Robert – I really enjoy your easy to read blog.  One question – where do you find your stocks to trade?

Thanks for your kind words and I very much enjoy writting about my trades.

As of this post I currently use TradeStation Radar Scanner that scans in real time about 1000 of the most active stocks looking for setups that are highly accurate.  Most of the time I spend just waiting for the next setup as I only get a few signals per week.

Many of my trades that I make while waiting for the next setup is  discretionary and the jury is still out if that is actually profitable or not.  Almost all of my losing trades if not all in the last six months are from discretionary trading.  Of course much of the gains I have in the last six months are from discretionary trading as well.  My abilities to scalp stocks continues to improve so 2009 should be very interesting.

Thanks again and best of trading to you.

Hi there,
I came across your blog in the message board on yahoo finance.

I decided to check it out because you had positive outlooks on LVS which I recently bought shares in.

I am a new investor, I’m 20 and a junior at the University of Connecticut.

I deposited $750 to an etrade account and decided to buy stocks and essentially play around and see how well I can do.
Obviously $750 isn’t a lot of money by any means but being a poor college student that’s all I could afford.
Because of the fact I have such little money I began looking at stocks trading below $5 a share. I started to look into penny stocks.
What is your opinion on penny stocks? Are they worth the risk? I bought 400 shares of PUDC.

I read a lot of positive things about the stock, what do you think about it?
Any of your advice would be helpful for this young/new investor.
Thanks

I am bullish on LVS but hedged with call options.  I would not want to try to time LVS to the day much less the hour as to when to enter.  I also think that it will take some time for LVS to make the kind of gains that make it worth.  LVS while having a huge debt load to maintain is a quality property in a beat up industry.  Unlike the airlines and the auto makers, the gaming industry really has quality talent in management.  As a result of the quality management, along with the quality and leading property that LVS offers means that if LVS does not go BK it has the ability to be a 5-10 banger when the market turns around.

I went and spent several hours last month looking at and talking to staff at LVS and its hurting no doubt but being down is not the same as being out.

I recall in the 80s before the internet and online brokers looking through small paperback books of stock listings.  The would show some of the basics like PE and recent pricing.  I would look through them trying to find stocks under $5 because back then I didn’t have any more working capital than you do now.  The one thing that I remember very clearly about finding cheap stocks is that I lost money almost all the time.  Most of the time cheap stocks are cheap for a very good reason.

When a stock moves below $5 (or never gets beyond that price) its priced at going OUT OF BUSINESS.  I have  a very low opinion of penny stocks for the same reason why most do.  They are high risk, and often manipulated in many ways.  Management is usually very weak and the ability to withstand mistakes is generally very low.  You have to do a lot of work before you put your dollars to work before you can invest in any stock and you can double that or more with penny stocks.  There are those that make money with penny stocks but the only ones that I know are traders that only SHORT them.

I dont follow PUDC but just taking a quick look at the stock it appears that it is a Chinese company and after making over 10 trips to China and seeing over a hundred factories I would be extra careful.  China is not mature yet in terms of finance and accounting.  Companies can make the numbers look just about anyway they want without fear of a government body causing trouble.

I really think you will do well to read William O’neils book “how to make money in stocks”  and also  a book about Jesse Livermore.  Both will get you thinking in new ways and allow you to seperate yourself from the average investor that is walking around blind.

Best to you

Robert Weinstein

Q. I am not clear on your LVS positions.
I have been following you when you started buying and you bought at a high levels (around $6.80).
It was down as low as $5.10 and you did not buy any at that price. Instead you bought more at a higher price.
I would imagine that you would stop your losses at around $6.
I also noticed that you don’t have small positions on it.
You bought a whole 2400 shares. Same scenariou for Rick. Please comment. Read the rest…