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Posted by MartZee December 03, 2009
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Stock screening: ASIA,RSG,RAX,PRGO


I ran my screening and the following stocks fit my criteria for buy: ASIA, RSG, RAX, PRGO

When further researching the selected stocks, ASIA provided the best results and I decided to buy an initial position of this stock at tomorrow’s market open. Per my loss control calculation I can invest $690 and buy 25 shares of this stock.




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Posted by MartZee December 02, 2009
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Visa added to portfolio


Visa (V) broke from a short, three week long consolidation today. It also reached my decision point for addition of a new position. Tomorrow morning I will buy additional 9 shares of Visa.

This morning I have bought Visa at this price:
12/02/2009    09:31:08    Bought  9  V  @  83.05




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Posted by MartZee December 01, 2009
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Medifast (MED) added to portfolio


Today I added to an existing position of MED to my portfolio:


12/01/2009    10:14:13    Bought  6  MED  @  27.65




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RINO added to portfolio, JADE sold


I decided to get rid of JADE, which doesn’t fit to my trading strategy. As I mentioned earlier, this purchase was a deviation from my rules. This is the reason why every investor or trader needs to remind his rules as long as he remembers them.

11/30/2009    15:36:47    Sold  34  JADE  @  3.0805

I also added 3 shares of RINO to the portfolio:

11/30/2009    09:30:16    Bought  3  RINO  @  33.49

Why I added only 3 shares? As the Reverse Scale Strategy dictates, you should add only the same amount of dollars to the position as your initial investment was. When I ran my portfolio loss control calculation I could add 15 shares of this stock, but RSS rule says not to do it. The reason is simple. If this new position turns against me and I will be stopped out, I will lose the second purchase, but the first purchase will make up the loss and I will end up equal. If however I would have purchased more than the first position, the second position loss would easily wipe out the first position gain and get me into a loss. For example:

My first purchase into RINO was $100 (per the loss control plan I could not spend more).
My second purchase into RINO was also $100. If this position turns against me and I will lose money, I will lose $28 on this purchase. But my first position is already making me $38, so I will end up with $18 gain. If I have purchased 15 shares instead, I would lose $150 on the second position and the whole trade would send me into -$112 loss.




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Review your portfolio and get rid of junk


When I realized recently how much I was ignoring my trading rules I used those last couple days working on getting back on track. I learned again, how important it is to have rules and follow them no matter what. Of course, you still can be working on improving or modifying those rules to fit your trading style, but you should stick to them. Otherwise you soon start buying junk and losing money.

Today, I reviewed my portfolio to check, how many stocks fit into my stock selection rules and I found that LJ International (JADE) and Netezza (NZ) do not fit. If you ask me why I bought those stocks, I do not have an answer. I just had a feeling. But feelings will lose you money. Both stocks didn’t surprise with earnings, both stocks have negative sales growth ratio, none make new 52-W highs, JADE doesn’t even have minimum required trading volume and it trades below $5 (another wishful thinking about getting rich quick).

I decided to give those stocks a chance. However, I moved my stop loss order tight to the price for both stocks. If they won’t go up only, they will be sold.




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Posted by MartZee November 24, 2009
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ORS sold


It seems, somebody was lucky today morning when I decided to sell ORS. I was sold first thing in the morning:

11/24/2009    09:30:24   Sold  67  ORS  @  0.78

Since then, the price was falling like a rock, because ORS filed worse than expected 3rd Q results. The outlook is not bright as well, even though it was packed into nice words. I am not interested in this stock anymore.




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ORS removed from portfolio


I decided to sell Orsus Xelent Technologies Inc.(ORS). This stock appears to me as a complete junk. It doesn’t fit almost none of my criteria, it doesn’t trend and I do not want to block my money on something like this.
The truth is, I just picked up this stock in euphoria of making money by buying a penny stock, which for sure will rise to $40 a share and makes me a lot of money. Heck no! This is not how I want to trade stocks. I might be watching this stock and if it shows momentum and price movement I might buy it back.

So far, it violates almost all my rules:

  • It doesn’t make new 52=W high
  • It has negative sales growth
  • It trades below 50 day MA
  • It has choppy trend with no progress
  • Daily volume is below 300k
  • Its market capitalization is below limit
  • its price is below $5 (for a reason)

I don’t know why I even bought such stock. This is another lesson, why I need to stick to my rules and stop buying stocks based on feelings.

I placed an order to sell this stock tomorrow at market opening.




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