I just love CF

At one time I loved POT (fertilizer folks OK?) until they spun off and made IPI. I have hated it for a trade ever since. So I looked for another fertilizer to trade. You just can’t go wrong with fertilizer when we are using corn to fuel cars. Corn takes A LOT and I do mean A LOT of fertilizer! I found CF and L-O-V-E to trade this stock.

When CF fell after their earnings I knew I was going to strike it big. So on May 4 I purchased 4 May PUT contracts (yes May) for 6.90 = $2,775.04. I saw the gap down on my daily chart and the long red candle pierce the 50 moving average. Generally I do not follow the daily chart during this zone but I do look at the weekly, daily and 233 chart regardless of the zone I am in to see if the strong trend is in the direction I see for the trade.

In trading one of the things I noted professional traders follow is the direction of the gap. I decided to do a very rare thing and hang on to my PUT. I watched CF closely because I decided if it rose half way up the red candle on the daily chart I was “outta there”! It never did so I remained in my trade even through the weekend. My get out point was half way up the red candle on the daily chart on May 4.

This morning I reassessed my trade. I decided to get out with a 127% profit because the candle was resting on the 200 moving average on the daily chart, and I felt, although I could probably get a bit more, I was happy in Hawaii. I sold CF for 15.85 which yielded me $3,549.77 profit.

So how and when did I enter the trade? Here we go....

In this crazy market I use the 5 minute chart (I call this chart my small chart) for an entry as well as 3 MOVING AVERAGES! I use a 5 and 10 moving average crossing a 20 moving average. When I have a fairly large distance of the 5 and 10 moving average from the 20 moving average I wait for a pull back to the 20 moving average. If the 5 and 10 cross above the 20 moving average but my trend is down I either do a sniper trade (Gary WIlliams) or I wait. On CF on a 5 chart I entered my trade on the candle close @ 11:50AM, May 4, 2012 when the 5 and 10 moving average pulled away from the 20.

I have 2 separate 21 charts. One built and developed by Gary Williams (gotta take his classes to get it) and the other is nothing but a 20, 10 and 5 moving average with the only study of ‘MONEY FLOW INDEX”. That chart is my small chart which I found in "Technical Analysis for Dummies" pages 220 - 222 and switched from a daily chart to a 21.

Read about money flow index at investopedia.com which BTW is a great informational and study site. I use it often.

Darcy,
Thanks for sharing! I'm a student of WSB 1-5 and advanced and it's nice to hear from others. Still a beginner.

Jeff

Gary Williams classes are great. If you are a beginner I recommend reading his book list...the entire list. My fav was Market Makers Edge and I keep it by my side every single day.

The hardest thing to overcome in trading is FEAR!

After you get past that stage reading charts is a whole lot easier.

Darcy, how did you get over the fear? I'm a Gary Williams student, so I have the knowledge, but fear holds me back.

Okay let's start with....

"What are you afraid of more?" Losing money or being wrong?

If you have set back X amount of dollars THAT YOU DO NOT NEED to pay bills etc. why do you care if you lose it? What if you had it in your wallet and your wallet was stolen? If it is money that is your fear then you have to decide which is more important.... 1 - 2 percent interest in the bank or 5 to 100 percent interest in a day or week. I will tell you this...If your goal is ONLY for you...your goal isn't enough. If your fear is money start giving away $20.00 a week to someone…anyone…buy someone’s dinner, give your server a $20.00 tip, throw $20.00 out your car window, buy $20.00 worth of toys and give them to needy children, give it to someone in the hospital. This will help you see what good increasing your trading basket will be.

If you trade the market you will lose at some point you just want to be sure you win more often than you lose. Never trade with money you can't afford to throw in the fire and forget about.

If your fear is being wrong welcome to the club! Try to trade virtual not less that 26 times in a row and those trades need to be right. (That was my fear...I hate being wrong) If you do that and you still aren't over your fear then I would say your fear is money.

Everybody...and I mean every single person who trades the market LOSES at some point. I would suggest, if you can, watch CNBC @ 5PM or record it. Those expert traders talk about their winners and losers. It helps you realize even champions lose.

I heard that Thomas Edison was asked how it felt to be wrong over 5000 times on his invention of the light bulb. He replied that he wasn't wrong he just found 5000 ways it wouldn't work."

You have to develop a positive attitude...an I can do this attitude...a belief in yourself...and an understanding every single person is NEVER 100% correct.


When I first began I lost half my basket in 2 months. I went back and practiced, practiced, practiced and built my basket back up with extra money I made. I traded again and lost half my basket. I realized I traded easier with fake money than I did with real. Why was this, I asked myself. Fear of being wrong, that maybe I didn't really see what I thought I saw made me hesitate which made me lose.

So I had to ask myself what was I more afraid of? I was more afraid of being wrong. To over come this I had to set a loss limit which was $300.00 and then I practiced pegging my entry with REAL MONEY. Some of my first trades brought me $20.00 but I learned when to get out. I was so excited about the $20.00 that anyone would have thought it was $20,000.00.

I wrote down Gary's entry point rules and taped them to my screen and again practiced with real money until I got the entry right. Please note I said practiced with real money. It simply helped me over come my fear because practicing with virtual...well you could cheat and reset your virtual account any time which wiped out your errors. You can't do that with real money. My practice with real money was ONLY to peg the entry point first. I knew if I got that right I could let it ride like I did my CF trade.

Next I read every single one of the books on Gary's list but read the books on his MIND SET list 3 times. Every single positive book I can get my hands on I read and the one I found the best has been the Bible. Wow this book is full of losers who became winners.

The truth is you can get to the point where you read the charts perfectly BUT if your mind says "Yeah but what if I am wrong" you will NEVER trade or be successful. You must find a way to get beyond that point. My overcoming came through trading with real money and using it to peg my entry point.

Plan how much you are willing to lose if the trade goes against you and stick with that plan. If it goes against you GET OUT. EVERYBODY even the experts lose. You just want your losses small and let the winners fly.

It helped me to talk to other traders. To hear how they were doing. I have friends who have lost all their trading money because they were foolish and gambled not traded. I also have friends who have traded and took their accounts in 4 weeks from $2,500 to $15,000.00. What was their secret? It wasn't a secret they simply traded with money that didn't matter and they believed in what they had learned. They pegged their entry and when they did they knew they could let it fly. They set a loss limit and abided by that limit. Never stay in a trade with the HOPE that it will turn around.

Break the habit if you have it of saying "I play the market" to "I trade the market". This is not a game. It is a job and treat it like one.

Finally be careful about staying in the virtual trades. You can get stuck there and never leave. Remember that saying: "Nothing ventured …nothing gained".

Hope this helps. Let me know if it does.



Edited 1 time(s). Last edit at 05/16/2012 10:14AM by Darcy.

More reasons for me to love CF.

This morning I noted that CF was below the 20 moving average. I had a signal from Gary’s 21 chart. I also had a signal from my special 21 chart with only the 5, 10 and 20 moving average. I got in a PUT @ about 11:34.

I bought 10 May PUT 3.30 Contracts = $3315.00 and sold them just a little bit ago on the formation of the candle @ 1:42. I sold 10 PUT 6.05 Contracts for a profit today of $2745.95. I am done for the week.

Next week using RTT I will be watching AMZN and FFIV as well as my favorite…CF.

Hi, great job and information. I am also a WSB student. How exactly are you using the money flow indicator to help you? Thanks

Darcy Wrote:
-------------------------------------------------------
> Okay let's start with....
>
> "What are you afraid of more?" Losing money or
> being wrong?
>
> If you have set back X amount of dollars THAT YOU
> DO NOT NEED to pay bills etc. why do you care if
> you lose it? What if you had it in your wallet and
> your wallet was stolen? If it is money that is
> your fear then you have to decide which is more
> important.... 1 - 2 percent interest in the bank
> or 5 to 100 percent interest in a day or week. I
> will tell you this...If your goal is ONLY for
> you...your goal isn't enough. If your fear is
> money start giving away $20.00 a week to
> someone…anyone…buy someone’s dinner, give
> your server a $20.00 tip, throw $20.00 out your
> car window, buy $20.00 worth of toys and give them
> to needy children, give it to someone in the
> hospital. This will help you see what good
> increasing your trading basket will be.
>
> If you trade the market you will lose at some
> point you just want to be sure you win more often
> than you lose. Never trade with money you can't
> afford to throw in the fire and forget about.
>
> If your fear is being wrong welcome to the club!
> Try to trade virtual not less that 26 times in a
> row and those trades need to be right. (That was
> my fear...I hate being wrong) If you do that and
> you still aren't over your fear then I would say
> your fear is money.
>
> Everybody...and I mean every single person who
> trades the market LOSES at some point. I would
> suggest, if you can, watch CNBC @ 5PM or record
> it. Those expert traders talk about their winners
> and losers. It helps you realize even champions
> lose.
>
> I heard that Thomas Edison was asked how it felt
> to be wrong over 5000 times on his invention of
> the light bulb. He replied that he wasn't wrong he
> just found 5000 ways it wouldn't work."
>
> You have to develop a positive attitude...an I can
> do this attitude...a belief in yourself...and an
> understanding every single person is NEVER 100%
> correct.
>
>
> When I first began I lost half my basket in 2
> months. I went back and practiced, practiced,
> practiced and built my basket back up with extra
> money I made. I traded again and lost half my
> basket. I realized I traded easier with fake money
> than I did with real. Why was this, I asked
> myself. Fear of being wrong, that maybe I didn't
> really see what I thought I saw made me hesitate
> which made me lose.
>
> So I had to ask myself what was I more afraid of?
> I was more afraid of being wrong. To over come
> this I had to set a loss limit which was $300.00
> and then I practiced pegging my entry with REAL
> MONEY. Some of my first trades brought me $20.00
> but I learned when to get out. I was so excited
> about the $20.00 that anyone would have thought it
> was $20,000.00.
>
> I wrote down Gary's entry point rules and taped
> them to my screen and again practiced with real
> money until I got the entry right. Please note I
> said practiced with real money. It simply helped
> me over come my fear because practicing with
> virtual...well you could cheat and reset your
> virtual account any time which wiped out your
> errors. You can't do that with real money. My
> practice with real money was ONLY to peg the entry
> point first. I knew if I got that right I could
> let it ride like I did my CF trade.
>
> Next I read every single one of the books on
> Gary's list but read the books on his MIND SET
> list 3 times. Every single positive book I can get
> my hands on I read and the one I found the best
> has been the Bible. Wow this book is full of
> losers who became winners.
>
> The truth is you can get to the point where you
> read the charts perfectly BUT if your mind says
> "Yeah but what if I am wrong" you will NEVER trade
> or be successful. You must find a way to get
> beyond that point. My overcoming came through
> trading with real money and using it to peg my
> entry point.
>
> Plan how much you are willing to lose if the trade
> goes against you and stick with that plan. If it
> goes against you GET OUT. EVERYBODY even the
> experts lose. You just want your losses small and
> let the winners fly.
>
> It helped me to talk to other traders. To hear how
> they were doing. I have friends who have lost all
> their trading money because they were foolish and
> gambled not traded. I also have friends who have
> traded and took their accounts in 4 weeks from
> $2,500 to $15,000.00. What was their secret? It
> wasn't a secret they simply traded with money that
> didn't matter and they believed in what they had
> learned. They pegged their entry and when they did
> they knew they could let it fly. They set a loss
> limit and abided by that limit. Never stay in a
> trade with the HOPE that it will turn around.
>
> Break the habit if you have it of saying "I play
> the market" to "I trade the market". This is not a
> game. It is a job and treat it like one.
>
> Finally be careful about staying in the virtual
> trades. You can get stuck there and never leave.
> Remember that saying: "Nothing ventured …nothing
> gained".
>
> Hope this helps. Let me know if it does.


AWESOME post. Thanks Darcy!

I have a simple 21 chart that I have set up beside the 21 chart developed by Gary Williams. This chart has the following a 5, 10, and 20 moving average AND the only study I have on this chart is "money flow".

A while back I heard Jon Najarian talking about using money flow to decide whether a stock is a good trade. If money flow goes into a stock then the stock will rise. If money flow leaves a stock then the stock will fall.

Using Gary's words :

“You need a stock that moves". Money flow assists in seeing this movement.

So here's what I do.

On my 21 "small chart" and Gary's 21 chart which I have side by side I look at the 5 and 10 crossing the 20 in either direction. I look to see if money flow is going into, out of, or is flat in that stock. I want my money flow index to be going in the same direction as my moving averages.

I look at Gary's charts to see what his studies say as well as his designed signal that he taught in 1-5. IF both charts are confirming a TRADE... I trade. I generally use a 5 minute chart to enter the trade. I wait for a pull back to the 20 moving average (generally) but there are times when I look at the 5 chart and can see that the time to enter the trade is RIGHT NOW. Peg your entry and you will be happy with your results.

If my money flow is moving in an opposite direction than my moving averages as well as Gary's chart I do not get in no matter what. If the money flow is flat I do not get in no matter what.

In other words I use the money flow to affirm the direction of the move. I ONLY use a money flow on a 21 chart. I want to trade stocks that move $2-$5 in a day. Depending on what I see on my daily I MAY hang on for several days. Most of the time with this nutty market I am in and out within one trading day seldom holding over night.

Let me add this...I use smaller charts because that is what my schedule allows. Sometimes I stay in a trade because I can see the daily. BUT if you look at the daily charts ...scroll through and look at the moves on 3 of my favorites...CF, MA and FFIV.

IF you learn how to peg the entry you can see these stocks would have brought you big $$$$'s.

Remember what Gary taught after you enter a trade. You'll have to dig out his books or CD's and find out what he said.

BTW I listened to his CD's so much that I think I have worn a groove in them. I still yank them out and hope they'll play. You'd be surprised at what you miss when you listen the 50th time ...

Darcy, Thank you so much for your response. This is just what I needed to hear. Although losing money is never good, my fear is absolutely that of being wrong. I'm going to use your method of getting over "what if I am wrong". I'll check back in with you soon to let you know how it goes. I'm tired of being on the sidelines... Thanks again, and keep posting! You are an inspiration.

Thanks Darcy! The information you provided is so valuable. I will print your postings and study your strategies. My problem is, I am over anxious. I often jump trades. I REALLY jump trades after losses or big wins.

I simply could not afford to take Gary's Advanced Class. I have practiced for about 9 mos and did well in the Fall/Winter. This trading zone was butchering me, until recently. I clearly realized some critical things about this trading period.

The question I have is, can I be a successful trader, if I do not have the knowledge from in the advanced class? The 21 minute chart setup by Gary is foreign to me.

Last question: Is there someone you used to help set your multiple screens? I have the Q-Charts manual, but I do not want to "mess something up" by setting my screens up wrong. I flip back and forth from one screen to the other. Thanks again for your help.

Rabbit,

I am a 1-5 student. I repeated 1-5 four times. I have taken 1 Advanced Class but I do not do any of those trades. I had to retype Gary's manual because I actually wore the other one slam through by writing all over the thing. Whenever I listened to his CD's I would write something I heard but didn't remember. I bet on one page I had listed 100 times one instruction.

Yes I had a friend set up my multiple screens. You could probably get some computer geek to help you. What I know about computers you could fit on the head of a straight pin. Zero knowledge of that. I follow Murphy's Law when dealing with computers...."It works better if you plug it in".

I do search the web for information when I have a question and have found Investopedia the best help in learning. I am on Briefing.com and I do kick around ideas with family and friends. I also have Qcharts but my family and friends have Strategy Desk. I kept Qcharts because of all the information I have on my charts...stuff like gaps, 52 week highs and 52 week lows, stock splits, news information, information about the company I get from Yahoo...just "stuff". I have read other books about the market and success other than those on Gary's list.

As I had said I do lose but I sell quickly when I hit my mark. I then leave my trading area and find a good movie until the next day. I often have CNBC on mute...they get on my nerves after a while of hearing the same thing over and over and over....like FACEBOOK what a stinker! I just don't need all the talking head hype. I like to listen to the noon hour guys and I like to listen to CNBC at 5 PM. I get a lot of tidbits there.

I have 22 stocks in one quote sheet. I also have a quote sheet listing only stock splits and a quote sheet for possible stock purchases, a quote sheet for indexes, a quote sheet that gives me the date, close, open, and volume on the stocks I click on, a quote sheet for the point losers and one for the point gainers. I found I can do this with Qcharts but not strategy Desk.

I also record every single close in the Dow, Nasdaq, and S&P along with the volume. There comes a time when you have to set in your mind that either you are going to play at playing the market or you are going to TRADE the market. I chose trading.

As for today NO THANKS...I am studying and doing some research. Good Luck!

Darcy,

This goes back a way, but you stated that you have 22 stocks on one quote sheet. Other than splits, do you ever stray from that list? Or is your list a constantly evolving thing based on what's happening? It seems to me that it may be easier to stick to a list to keep the distractions to a minimum. I find myself always looking for the best thing out there then not doing anything.

I refer back to your post to me frequently and it is always inspiring. I always look forward to your posts and hope that you'll continue to let us know what you're doing!

Dash, I am with you. That has been my issue. When there is not an obvious trade in one the stocks that I am familiar, I tend to start loooking for a trade within stocks that I have only glimpsed. This discipline thing is a "beast". I have to remember, the market is going to give me what it is going to give.

The other thing I have been forced to realize is, I have much less knowledge than most of the these people trading. They know strategies and techniques that I will only learn from continuing to study. For an example, I just learned something so big this morning. I am amazed that part of a technique was so simple, but I have been dancing all around it. It finally- JUST CAME TO ME! I know you know you are familiar with what I am talking about When hours and hours of time is put into this a week, sometimes an "ah ha!" moment hits. It makes it all worth it all over again. Thanks God we have people out here who are willing to share a little light on a few things. Some of this stuff, I would have never gotten with out guidance.

Yes Rookie, discipline is key. Thanks for your response, and thanks for sharing your ups and downs with everyone. I'm curious - what was your "ah ha" revelation?

Do not ignore the significance of VOLUME AND MONEY FLOW!!!!