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Since FAZ is a triple leveraged Financial short fund, its daily volatility attracts a lot of market gamblers. I am still trying to get used to trading it. It perfectly fits my day trading profile

• volatility
• superb liquidity.

We need volatility since stocks with volatility move fast and big. We need liquidity since when you need to get rid of it, it can not be like a piece of gum stuck on your shirt. The only con of liquid stocks is that it is hard to trade since there are a lot of professionals trading them. But it is worth your while to practice with all these liquid stocks since one day you might want to scale to a much bigger size once you have full confidence in your system. For example, the market should not have any problem absorbing a single shot of a million dollar position in FAZ. Hopefully you and I will be able to trade positions of that size in the future. That is why I never trade penny stocks or thin stocks. Nor should you.

I only took one trade shorting FAZ today. It was a fine opening trade. Here were some indicators i used

• StockTwits
• Candle sticks + Volume
• Chanting

Let’s go though them one by one.

1. StockTwits is the best indicator. I go there everyday to check out what other traders/investors think. Here is the link http://www.stocktwits.com/t/FAZ. Today I saw there were so many people trying fervently to go long on FAZ. I decided it was about time to fade it. Here is one simple most important reason. A stock goes up only if there is lots of buying power. If most of the buyers are prepared for the pop, that means it is going to die very soon. there are just no one left to push it up. You must think I am kidding….. Go flip through the pages on Stocktwits. You will see how many people there went long on FAZ for various reasons that I would never care.

2. Some people might think my system has some fancy magic indicators. No It does not. I use 2 very simple indicators. They are candle sticks and volume. Of course, it takes a lot of pratice to master them. As you can see from my portfolio, my sentiment is cautiously long. I do not have any short position. That is another reason why I shorted FAZ. Look at the bar where i shorted it. It does not have a tail. Other people like to call them upper shadow and lower shadow. A clean red bar like that means there was no resistance at all from the bulls. Coupled with slightly enlarged volume, it was a go signal. did I know It was sure fire? No. But I thought the odds were in my favor.

3: Right after I placed the trade, i started chanting “FAZ, show me some love”. I did that three times in a row. And it started to drop. Give it a try. It works! LOL……

How my swing positions are doing..

POT, Fantastic Little Runner. I give it 5 stars out of 5. There is nothing bad about. The way it moves is gold.

WLT, Not Too shabby. 4 Starts. Its moves are not as smooth as POT. It chopped a bit. But this stock would shoot up like a rocket if there is some fuel.

HES, Not Too shabby, 4 Starts. Solid oil company that moves at its own pace.

Leap, Nothing fantastic so far, nothing bad. It is just floating with the market. 3 Stars. This stock is like WLT. It is a rocket when it moves. There is nothing I can do to prod it. Maybe I should start chanting my magic words.

STP, what a lazy guy so far!. I do not like how it behaved today. It is perhaps because it went up too much yesterday. 2 starts. It is on probation. If it does not move up in 2 days, it will go to my garbage collectors.

New Member SOHU. I have a small position in it since I have already had quite a few long positions. I have been saying to long Sohu on Twitter for the past 2 days. Talk is cheap. So I am in.