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Dusting off the Cobwebs

As mentioned in my non-trading blog, I recently started trading again.

It has been a long while.  In the past, my main problem has been my inability to control my emotions when a trade I make turns out to be a losing trade.  I’ve never had trouble making money from trading, I only start losing money when I lose control, when I am unable to stay out of trouble, and all the patience and discipline that I’ve practiced goes flying out the window for that moment.  It’s like a parasitic demon within me that won’t go away any time soon, so I may as well adapt and try to manage the demon.

Hopefully I will be more successful this time around in controlling my emotions.  I know what I need to do differently this time around.  Follow my rules:

  1. Wait for the chart to tell me what it is doing
  2. Stay out of trouble
  3. No more rushing into a trade, especially without first assessing, preparing and planning things out.  Drawing lines on the chart helps me to assess where things are at.
  4. Practice becoming more comfortable with entering bracket orders.
  5. Visualize myself accepting a loss, should it come to that.

Let the games begin!

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NASDAQ: ARMH signal

Went long Arm Holdings (NASDAQ: ARMH) @27.5, stop 26However, it was only a 1/2 position, as I am anticipating lower prices.

More analysis later tonite

NASDAQ:BIDU trade post-mortem

Despite having a trading plan for Baidu (NASDAQ: BIDU), I sold and exited my position for the following reasons:

– market context: Trend day to mark the first day of a sell off / pullback

– Baidu gapped down and could not recover above yesterday’s open

– inability to reach 139, or even Friday’s hi.

– Baidu is overbought on the daily chart

I gave my trade the benefit of the doubt by not selling the opening gap down.  But the inability to recover above the open, and the ensuing weakness led me to sell.  I believe Baidu is preparing to fill the gap.

I will look to buy back between the gap fill (133) and 131.

NASDAQ: BIDU update

exited all of my Baidu (NASDAQ: BIDU) position at 137.more analysis later tonite

NASDAQ: BIDU analysis

Here is a chart which captures my trades made in Baidu (NASDAQ: BIDU) yesterday.

The rationale for making this trade was simple:

a) Baidu is in an uptrend
b) There was an unfilled gap from last week
c) Google (NASDAQ: GOOG) reported earnings above expectations, and was widely expected to gap up.  On that event alone I was expecting the majority of stocks in QQQ, Baidu included to act strong on the open.

My plan was to buy on a pullback.

My first long entry turned out to be too soon.  Luckily I recognized the pattern of market weakness.  Sell off on the open, bounce and weak recovery.

I exited half of  my position to reduce risk.

I continued to monitor my position, looking for signs of strength, but could not ignore the signs of weakness.  When it became apparent that 136 would be challenged by the bears, I decided to cut my losses altogether.  The pullback move was unfinished.

However, my plan was unchanged.  I still wanted to buy on a pullback, but picked a support level this time.   I had previously identified 133-135 as support, but was unsure as to whether Baidu would pullback to that area.  So, I decided to look for selling exhaustion near 135.  It dipped down as low as 135.1, and when it reversed, I bought, got filled at 135.52.

At the time I made the screen capture above, I was not sure whether the Low of the Day was in or not, so I decided to place my stop at 135.  Fortune favours the bold, my stop was not hit for the rest of the day, so now I am holding a full position long over the weekend.
Going forward, I am fairly confident about my swing trade.
My stop will turn into an alert at 135, if Baidu drops below that, I will sell 1/2 of my position, and look to buy back 1/2 position at lower prices, with a new stop of 131.
1st Target for my swing trade is 139, at which point I will sell 1/2 of my position.  For the remaining half, I will attempt to time the highest price between now and when Baidu reports earnings (Oct27).

How NOT To Raise A Generation of Android Users

So, Google (NASDAQ: GOOG) killed it this week, reporting earnings that were way above any analyst expectations.  Larry Page must feel smugly good about his short time as the king of the next generation money making castle.

Well, Mr. Page, I am here to tell you that the deep moat that you think you have  may turn out to be more shallow than you think.

As previously mentioned, I had bought an Asus EeePad Transformer tablet as soon as I discovered how engaging it was for my kids.  But that was only because I had previously worked with Android tablets and was thus, able to “evangelize” it to my kids.

When it comes to selling a product, features and functionality are in many cases, less important than the effective marketing of the product.

As an example, let’s take a look at how Apple (NASDAQ: AAPL) is currently approaching the marketing of tablets to the younger generation:

1.) First develop a marketing program and a business plan that is targeted at students, like the one that Apple has here.

2.) Next train evangelists to evangelize your program in schools.

3.) Next, promote and support developers and SME’s (such as this one) to develop apps targeted for school aged kids.

4.) Use social media (facebook, twitter, YouTube, blogs, AdWord campaigns, etc) along with conventional media (tv, magazines, newspapers) to promote your program, with the objective of gathering enough of a critical mass of supporters to promote on your behalf.

5.) Create additional targeted publicity for your program by holding a contest similar this one.

6.) Finally plan for world domination by strategic selection of schools to convert all across North America, one school district superintendent at a time.

With any kind of committment to the above 5 steps, it shouldn’t be too hard to achieve some sort of success.  Success is measured by the number of kids who adopt the company’s devices as their own.  There’s actually an education ecosystem at work here:

Teachers / Parents:  They have the ability to choose what technology products to incorporate into their classrooms / lives.  The indirect customers.

Developers/SME‘s:  They have a vested financial interest in producing the best apps for the students

Students:  the basic consumers of technology products and apps

Platform Provider:  Google or Apple

Once the kids becomes used to using the iPads, they then bring that comfort with the technology, along with Apple’s new found mindshare into their post graduation lives.  Voila, you now have a new generation of loyal followers to evangelize your cause on your behalf.

The Army recruits students out of high school, trains them, and prepares them to be soldiers.  They then march out into the world, ready to fight for the cause of the General.  It’s not that much different of a process to raise a generation of tablet users.

Now let’s take a look at what Google is doing:

1) marketing program and business plan targeted specifically to students:

I did a search for Google in education and Android in education.  Unlike the Apple search results, the results were just despicably pitiful.  Apple’s criticism about fragmentation is not off base.  Five different google sites talk about five different aspects of education with no coherent theme, let alone strategy.

2) Train evangelists to evangelize the student oriented business plan.

Nope, no matter how hard I searched, I could not find anything.

3)  promote and support developers and SME’s (such as this one) to develop apps targeted for school aged kids.

I had to search long and hard in the android marketplace for some learning apps for kids:  Talking Kids Math, Slice It, Math Wiz, Math Practice

The iTunes store, on the other hand, has way more selection and categories of apps for different students.  The vast choice of iPhone/iPad apps available for students makes android look like a two-bit amateur.

4) Social media to promote the business plan:

Google doesn’t have a plan, nor any semblance of an education program therefore, there is nothing to promote

5) Create additional targeted publicity for your program by holding a contest:

On Google.org, you have to apply to them to obtain technology products in your school.  So, basically, they see placing Google products into schools as a philanthropic activity.

On all counts, Google has utterly, completely, and most sincerely failed on absolutely all counts in raising a generation of Android Tablet users.

Meanwhile, Apple has spent all the upfront marketing expense and other expenditures;  it now has a steady supply of loyal fanbase to buy whatever products it wants to flog.  Apple could probably stamp its logo on a bunch of pet rocks and sell it for an obscene profit.  Android, unfortunately, is now at risk of being marginalized to niche markets like techno-nerds, and sophisticated users who don’t mind pressing the screen 3 times (or more) just to turn off WiFi.

NASDAQ: BIDU signal

I just went long NASDAQ: BIDU @136.45, stop 132, initial target 143.

More analysis later tonite