Trader's Mind

 Five books about philosophy and psychology of traders, written by or about some of greatest investment minds of all time. It's like getting mentorship from an Olympic champion.

1. "Reminiscences of a Stock Operator" by Edwin Lefèvre.

Typically, the first choice is a timeless classic written about 100 years ago about life and financials adventures of (allegedly) greatest trader of all time - Jesse Livermore. Written very nicely by popular financial columnist of the Roaring 20's. Original text from good publisher is hard to find - they all out of print.

I found this:

https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Lef%C3%A8vre/dp/1640323368/ref=sr_1_1?crid=21EQPOV86DT4J&keywords=reminiscences+of+a+stock+operator&qid=1685024612&sprefix=reminis%2Caps%2C112&sr=8-1&asin=1916054501&revisionId=&format=4&depth=1 

 

There were several attempts to publish Reminiscences with modern day commentary and explanation of historical backdrop. I think the best one is by Markman. It contains original text, his annotations and many photographs, which helps since book covers important historical events and prominent people of that time.

https://www.amazon.com/Reminiscences-Stock-Operator-Commentary-Livermore/dp/0470481595/ref=sr_1_5?crid=21EQPOV86DT4J&keywords=reminiscences+of+a+stock+operator&qid=1685024612&sprefix=reminis%2Caps%2C112&sr=8-5

2. "How to Trade in Stocks" by Jesse Livermore

This book is definitely not my first choice, but if you really liked Reminiscences, you will love this short book written by Livermore himself near the end of his life. It corroborates stuff Lefevre wrote, adds more color and includes last iteration of his trading system with notes and records. Jesse Livermore wrote this book for his son. Original text is tiny - less than 100 pages, but I was never able to find one. I have this variant with modern commentary, that is completely unnecessary imnsho and can be mostly disregarded.

https://www.amazon.com/How-Trade-Stocks-Jesse-Livermore/dp/0071469796/ref=sr_1_1?qid=1685027571&refinements=p_27%3AJesse+Livermore&s=books&sr=1-1&text=Jesse+Livermore

3. "How I Made $2,000,000 in the Stock Market" by Nicolas Darvas

A true story about non-financial guy (he was a dancer!) going thru every "circle of hell" of professional trading, figuring out an elegant, repeatable and teachable approach to speculation ... known today as Darvas Box. Written in light and playful style by Darvas himself, it's a short and fun read... and works today with only slight variations ;)

https://www.amazon.com/gp/product/1684226287/ref=ppx_od_dt_b_asin_image_s00?ie=UTF8&psc=1

4. "Pit Bull: Lessons from Wall Street's Champion Trader" by Martin Buzzy Schwartz

The most current of five, this one takes place in 80s-90s, when Buzzy was (and still is) an undefeated champion trader. Guy #2 lost his mind (literally went crazy) trying to beat Pit Bull. He still lives, now in Florida, breeds champion horses, trades differently than before. Periodically he can be found on YouTube, giving interviews to independent channels mostly about "old times". Although his methods don't work as well in modern markets, alot of it still applicable, but stories themselves are pure gold and written very well. Incidentally, this book was quite popular and loved by trader's wifes and daughters lol.

Of note: reading description and editorial reviews on AMZN, I am convinced that either none of those people read the actual book or they are tasked with character assassination (for whatever misguided reason).

https://www.amazon.com/Pit-Bull-Lessons-Streets-Champion/dp/0887308767/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1685028011&sr=1-1 

5. "The Complete Turtle Trader" by Michael Covel

Last but not least, this story is probably one of the most amazing, unbelievable, controversial episodes of financial markets in second half of 20th Century. A $1 bet that speculating can be taught and traders can be bread like turtles in Asian farm. Shrouded by secrecy to this day, many Turtles went on to become some of the biggest money managers nobody ever heard of. This story is told by one of original Turtles (supposedly the failed one), and although he broke NDA agreements and vows of silence, he wasn't sued or made to stop selling trader's "educational products". People involved usually neither confirmed nor denied, and nobody afaik ever disputed the tale of Turtle Experiment and its results, as Covel described it.

https://www.amazon.com/Complete-TurtleTrader-Investors-Overnight-Millionaires/dp/0061241717/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=

MatrixCV Chart Book

ChartBook post will be continuously updated with latest analysis for issues in current MatrixCV watch List.

 ...developing...

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SPY 2022-2023 Box is better defined un-adjusted for dividends. There have been several payouts since the War began in February 2022, that moved prices far out of alignment.

Below is previous version of SPY War Box, drawn in early March

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TAN Solar Box 2021-2023

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Uranium etf URA in this post (link) - "Case of Uranium"

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 Buying half of position SHOP in this post (link) - "Shopify on the fly"

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ETSY vs AMZN 1 year drawn up

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Shopify on the fly

 SHOP developed this 8 months long 40/30 Box after a huge 80% drop off of November 2021 high.

I attempted to buy first breakout and wrote about it on August 2022 in this post (link):

"July-August rally in SHOP was impressive 50% advance that failed spectacularly on August 11. Since then, price returned into the box and sliced 50dma on the way down like it wasn't even there. 40 area remains as resistance and still can be used, but 42-43 is better to be sure. I bought half position in simulator on August 3, just as it was advancing over 40, and sold it today for 20% loss. Original stop was under 30."

October collapse from the Box was quickly reversed, accompanied by impressive volume. Price went for another breakout attempt, but run out of steam in 40-45 area by early December. What followed was only a partial decline on December tax-loss selling - it didn't reach the bottom of the Box at 30, and eventually found some support at 50dma in first weeks of 2023.

If price finally broke-out of 40/30 box on January 23-25 with big volume, then what we are having right now is a first re-test of prior resistance, that now expected to act as support.

Word of caution - SHOP is really fly' - this thing is crazy volatile and moves 20-30% monthly for no good reason at all.

On this move, it can go to 36 and still be bullish, or open at 46 tomorrow and never look back.

 

Case of Uranium

 

 

 

 

Matrix CV. "When to Do It" Q&A

 Although these Questions are few days old and alot of fortunes changed dramatically since last week, many of these levels remain actionable and require ongoing analysis.

There are 3 main buying points within MatrixCV framework on Daily chart :

- Breakout from base or formation (box), or breakout above support/resistance line. Daily candle has to close above the line, thus producing Buy Signal. Put 'stop' order to buy few cents above the high of Signal candle.

- Retest of breakout, or return to support/resistance line from above. This happens because "price has memory". Often, after breakout occurs and price rises strongly for days and /or weeks, eventually it will encounter overhead supply, selling will overwhelm buying and price will come down to about breakout price. Look for Down Day or two with high volume, followed by Up Day that will close higher. That's your Signal. Set 'stop' order to buy few cents above. Alternatively, you can just buy At The Market as the price falls into vicinity of your Line - really, the stock just recently broke out and rallied hard - it already proven itself. Also, if you happen to miss the breakout, this is your chance to buy close to that price.

- Retracement to rising 50 Day Moving Average. When stock breaks out of formation or above established support/resistance line, it is expected to develop a rising trend lasting months to years. At this stage it will not be making many boxes, but it will return to 50DMA every couple of months (or so), providing additional buying points along the way, as well as helping to trail a protective 'sell stop' order. 50dma is one of most widely used trade triggers, and often produces violent reversals.

Remember, that all this geared towards Bull market - price above 200 Day Moving Average and making a succession of Higher highs with Higher lows. When buying in ongoing Bear market (hoping to catch a bottom), bet in halfs or wait for better days.

Landing Page for MatrixCV

Matrix (Compact Version) is a relatively simple way to research, organize and manage a concentrated discretionary portfolio of ETF's and common stocks. This page is the compound of it.

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Weekly 5 Year Chart   https://schrts.co/pkEUZMGF

 

Daily 1 Year Chart  https://schrts.co/WhRRGwIK

 

CHART BOOK        https://ibergamot.blogspot.com/2023/03/matrixcv-chart-book.html

 

FINVIZ

 

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Shopify

http://ibergamot.blogspot.com/2023/03/shopify-on-fly.html 

 

Uranium

http://ibergamot.blogspot.com/2023/03/case-of-uranium.html 

 

"When to do It?" Q&A about Price Movement and Trade Management 

https://ibergamot.blogspot.com/2022/08/matrix-cv-when-to-do-it-q.html

 

Original article from November 2021

http://ibergamot.blogspot.com/2021/11/matrix-cv.html

 

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Watch List (best to view 4 across)

Trade only your own watch-list. Exceptions are futile!

 

Main List : https://stockcharts.com/freecharts/candleglance.html?SPY,_VWINX,TAN,UBER,ONLN,AMZN,SHOP,ETSY,GDX,URA,IYR,XHB|B|J[spy]|0

 

Secondary List: https://stockcharts.com/freecharts/candleglance.html?META,ABNB,CRM,GILT,CHEK,AAP,BABA,MSFT,UPS,FDX,NVDA,BA|D|0

 

Solar Industry (discussed in video here:  )  https://stockcharts.com/freecharts/candleglance.html?SPY,TAN,ENPH,SEDG,FSLR,RUN,SHLS,SPWR,JKS,NOVA,ARRY,CSIQ|D|J[tan]|0

 

S&P Sectors and their performance in relation to S&P500  https://stockcharts.com/freecharts/candleglance.html?XLF,XLK,XLC,XLI,IYT,XLU,XLB,XLE,IYR,XLP,XLY,XLV|D|J[SPY]|0

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 Videoteka

 

#4  https://youtu.be/uQYcIFCtOhg

 

#3  https://youtu.be/XxBdjCZqdkI

 

#2  https://youtu.be/HdBbaeRnWBc

 

#1 https://youtu.be/CfMYhpqPqfo

 

 

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MarketWatch Simulators

 

MatrixCV for ETF's            https://www.marketwatch.com/games/matrixcv---etfs

MarixCV for Single Stocks https://www.marketwatch.com/games/matrixcv---single-stocks

 

The purpose is to buy 5 equal size positions, in order to practice portfolio management, and to later transition from simulator to real money.

 

Rate T of 2021-2023

 A new Rate T has developed. 

T-Theory uses 30-Year Treasury Yield $TYX to estimate future dates of meaningful lows, major corrections and periods of softness (sideways volatile consolidation) in broad stock market ($SPX, $NYA). Although dates are known in advance, it is not possible to predict what kind of a low may occur, at what price level, whether it will be higher or lower low or even last correction low before rally starts. Plus, there is a margin of error of no more than 10%.

Over the past 10 years or so, it has been prudent to lighten up portfolio of stocks well before Rate T projected dates hit, so ample funds will be available to do some buying on downlow. Spread your bets, reduce size, widen stops - we are already in the midst of historical bear market, that may get whole lot more historical.

21-23 Rate T started with high in 30yr Yield of 2.5% on week of March 15, 2021. There are two minor highs of 2.4% - first one happen 3 weeks prior and last high was on week of May 10. (As of this writing, "last high" already hit one of its projections)

There are two possible placements for centerpost of  the T - Time Symmetry Projection - producing 2 sets of time targets for when a low in stocks may occur. 

The Low of this move in rates at 1.67% on week of November 29, 2021 produces 37 weeks Rate T with target on week of August 15, 2022 (July 25-Sept 6, considering margin of error).

Last Low Before Breakout at 2.07% on week of February 28, 2022 produced 50 week Rate T with target on week of February 13, 2023 (Jan 9 - March 20, considering margin of error).

IMNSHO, this relatively small Rate T has so many wiggles so close together - its practically a guarantee we gonna have a non stop volatile circlejerk (punctuated by few moments of sheer horror) from here and all the way to Spring of 2023.

Projections of 21-23 Rate T:

June 21, Aug 15, Aug 29, 2022.    Dec19, Feb 13, Mar 6, 2023.