CHEETAH TRADING SYSTEM

DBLE Double Eagle Petroleum on Life Support–Cheetah Trading System

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DBLE, the second trade of the Cheetah Trading System is on life support right now.  The Cheetah Trading System is currently suffering a very heavy draw down of 16 to 18% because of an entry at 10.5 many weeks ago.

I really find myself in an unusual situation and it may speak to one of the flaws of this experiment.  I mentioned before that trading with an initial small amount of capital probably requires that in the early going not too many top losses or actual full round trip trades are triggered because it can really start to hurt an account with a starting value of $1000.

But this thinking at the same time has caused me to take a much larger draw down than I would ever even normally consider in the past.  Usually in the past I am out very quickly at the slightest hint of under performance.

But with DBLE I have been sitting on my hands and watching it crater perhaps because of my stubbornness to avoid commissions and the desire to get the account moving up in the early going.

Anyway, so here I sit now still in DBLE and today it did a hammer reversal.  The recent decline has been on light volume.

The other problem is that earnings are coming out tomorrow in the AM. So there is a real risk that this drawn down can turn into a disaster tomorrow.  If we break below the low of 8.67 tomorrow then I have to qualify DBLE as being in a new down trend.

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Cheetah Trading System Update DBLE

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The second trade of the BestOnlineTrades Cheetah Trading System DBLE is failing to move so far and I am currently under water on the trade.  I am still in this second trade of the BOT CTS and currently intend to stay long the trade.

Clearly I was too early on this trade.  In hindsight I can see that it would have been better to enter this trade TODAY, instead of 7 days ago.  Today the trade is doing a slightly higher low double bottom retest on low volume.

I am hopeful that DBLE is at the bottom of the current trading range and will oscillate back topside to the 10.75 range within the next week or two.  I would like to exit the trade on a possible breakout in a few weeks.

As indicated in a previous post, I want to be long TLR and am watching it for signs of ‘the move’.  So for now I sit and wait in DBLE hoping for a profit to be realized within the next few weeks.

dble20110427

I may have to add the rule that as part of the Cheetah Trading System I can only enter trades after double bottom retests, or tests back to trendline support.  This appears to be ‘more safe’ and but better odds on my side.  I want to avoid if possible being stuck in a trading range for 7 days.

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Cheetah Trading System Big Pattern Strategy Update

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DBLE, the second trade of the Cheetah Trading System seems to be performing well after two days of draw down after entering the trade.  Yesterday 4/21/2011 DBLE had a pull back on 75% less volume and as a plus managed to avoid exceeding the 4/20/2011 high by one penny.  This is good because I like to see strong volume contraction on pull back days without touching the previous days high.  In this case DBLE managed to avoid doing so by one penny.

DBLE is not really a ‘big pattern’.  But I only recently decided to focus this first Cheetah trading system on big patterns.  So I am stuck with DBLE for now and if all works according to plan will hope to exit DBLE in the 12 to 13 range?

If I can get an exit on DBLE within the next month or two, I would then like to consider a long entry in TLR, a possible big pattern I have been watching.  Ideally TLR will wait for me until the DBLE trade is finished.

TLR is a highly speculative gold exploration company with transitional potential to a production company by early 2012.  I have spotted TLR as a potential big pattern and will now start to study it like a cheetah in the tall grasses.

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I probably do not have to inform you that the gold price has been hitting record life time highs and will maybe continue to do so for a while longer.

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The Cheetah Trading System Large Pattern Strategy

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After further contemplation it has occurred to me that there probably ought to be two trading strategies for optimized chances of longer term success.  The 5% and 10% Cheetah Trading System strategy being the first, and then a 30% Cheetah Trading System ‘Big Pattern’ Strategy as the second.

At this point I am thinking it better to continue with the second ‘Big Pattern’ Strategy going forward.  Depending on how it works out, I will then make the next attempt the 5% and 10% Cheetah Trading System Strategy.

The reason why is because I am slowly coming to the firm conclusion that fewer trades out of bigger patterns is the best approach to long term trading success.  If you are reading this then you are probably familiar with a man named Warren Buffett.  If you are not, then just know that he is probably one of the top 10 investors of all time.  I would not consider him a trader.  But he has sold positions and bought them over very long periods of time.  His tendency is to buy and hold for a VERY long time.  By doing so he has become extremely wealthy.  He has bought brand name companies with very strong long term sustainable economics.

So as crazy as it may sound, I like to think of the Cheetah Trading System 30%er strategy as a ‘Mini Warren Buffett Swing Trader’ type strategy.  It is a strategy where targeted trades are made out of big patterns and are then ‘held’ but not ‘forever’.  Only for targeted time durations.  So I am applying part of the principle of Warren Buffett’s success except that I am doing it from a trader’s mindset, not a fundamental one.  I am also applying the principle of compounding (which Warren Buffet always credited as key to longer term success), but on my own terms, not on annual buy and hold terms.

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Taking Some Heat on DBLE Double Eagle Petroleum

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I am taking some downside heat on DBLE, the second trade of the BestOnlineTrades Cheetah Trading System.  I don’t intend to sell out based on today’s action for now.  I have to be careful about accumulating too many trades in the early going without enough profit to work from.  10 round trip trades at my current commission rate of 7.95 would be about 16% of $1000.  That is quite problematic and does show how excessive trading can really damage an account just on commissions alone.

So for now I will stand ground on DBLE as I still believe it will work into a breakout.

I will say though that I realized that I have made another mistake with regard to my entry on DBLE.  I entered DBLE at the time it was appearing to break out north from the downward trending resistance line during the day.  But the mistake was that at the close it was NOT an official break.  In fact by the close of the day it closed right under the resistance line.  So this was the type of day where waiting until 3:59PM would have been very useful as I had written about before.

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The BestOnlineTrades Cheetah Trading System

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I decided to change the name of this ‘project’ I am working from BestOnlineTrades Mastermind Project, to the ‘Cheetah Trading System’.  I think the later is a more appropriate title.  A mastermind project implies a coordinated effort of the mastermind, in this case a group either small or large of many traders. I suppose such … Read more

BestOnlineTrades Cheetah Trading System Trade 1 Review

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This posting is a review of trade number one of the BestOnlineTrades Cheetah Trading System.  The first trade of the BOT Cheetah Trading System was not the way I wanted to kickstart this project.  It started with a loss of 1.71% and it was an absolutely silly loss and I can already see that I broke two important trading rules on the first trade of the project!!

I don’t know if this is a bad omen or not, but I will shrug it off in the hopes that this first posting offers something to be learned for FUTURE trades of the project.

By the way, I am also making it a requirement that before I initiate the next trade of the project, that I MUST read the postings of the previous trades to see if there were any important lessons that can be used to improve the next trade.

The first trade going long VG I made two very important mistakes which I hope will never be repeated again.

Mistake 1

First, I went long VG after it was already moving upwards for 6 straight days !!!!  This is a statistical probability that goes against anyone wanting to go long.  Going long any stock after a strong of advances like that is always a mistake, ALWAYS.

Instead I should have WAITED for the stock to retrace.

Mistake 2

This brings me to the second mistake I made with VG (Vonage Holdings Inc.).

The stock was fast approaching two very high volume swing highs.  In that situation there is almost always a pull back and is another reason to WAIT before going long the stock.

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How to Trade One Thousand Dollars into One Million Dollars

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The answer to this key question, “How to trade one thousand dollars into one million dollars” is very interesting to me and I have been thinking about this a lot lately.

Now you might be wondering why I am choosing the 1000 dollar level as the starting level for such a question.  The answer is simply because it is a nice even round number and it is reasonably ‘low’ and also somewhere close to what initial minimum deposits are at several popular brokerage houses.

What got me first interested in this question were those ads for Forex Trading where they offered starting accounts at only 250 to 300 dollars and then promised the ability of high leverage.  After seeing those adds, it occurred to me how great it would be if someone could start with 300 dollars in a forex account and then trade it into very large amounts.  It seems like an impossible feat, especially with the complications of leverage in forex.

But a starting brokerage account of 500 to 1000 dollars is quite common these days.  We see ETRADE showing commercials with a baby and a kitten trying to woo new trading customers.  It would seem that a TV ad showing a baby and a kitten is targeting a more general widespread audience.

So there are likely millions of trading accounts out there that are starting at these minimums.   But even if they are not starting out with a 500 or 1000 dollar minimum, most people can usually scrape 500 to 1000 dollars somehow.  A lot of people at all income levels still somehow manage to spend 1500 per year for an iphone or a $1000 60” HD TV.

So Why Not Set Aside $500 to $1000 into a Brokerage Account with the Intention of Trading it Into 1 Million Dollars ?

It seems like an enticing goal.

But is it possible?

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