All posts by Sami Abusaad
I’m Bullish and Not Ashamed of It
Sami was bullish last week… and he’s still this week. See the details here: Jump in and find out: Why Sami is STILL all out bullish Why almost everything is a buy What is different about a very bullish market Why APO may breakout The name that may be copying ACAD The other names Sami wants to buy and sell And more!
Continue Reading -->I’m Bullish and Not Ashamed of It
Sami put on a red shirt… but he sure doesn’t hate the market. Tune in to this week’s Double Watchlist as Sami Abusaad shares why he’s bullish on the market. Jump in and find out: Why Sami is bullish How to use the 20 ma to judge the market’s bullishness Why Bitcoin looks so sloppy Entry triggers for Ethereum and Dogecoin Where ACAD might be going next Which names are still extending from next week The name Sami’s giving a new target Why GE could be the next Chipotle (CMG) And more!
Continue Reading -->Caution Up Ahead
The market triggered a weekly buy setup, but the daily chart is still waiting for the 20 day ma to turn up. But there’s still a bit of danger that’s possible. Find out what you should be looking out for this week. In this video, Sami explains: – When a breakout failure could be identified – Which stocks could have pullbacks this week – How he typically would have played BGCP – What he didn’t like about CDEV (and what he likes about it now) – Why EPC is better as a long term play
Continue Reading -->A Line in the Sand for Bullish Sentiment
Both QQQ and SPY have had double bottoms and equal highs over the past week. Sami’s expecting the market to start trending up again, but what has to happen before he goes bullish again? In this video, Sami explains: – How to determine what sellers and buyers are doing – What a line in the sand has to do with his sentiment – Why ACAD isn’t a long-term trade – Which pattern can be found in ADT – When he will take FB as a long term trade
Continue Reading -->The Most Important Quality for Traders
Last week SPY was looking bearish, but it’s already reversed most of the move down. QQQ and IWM are looking shaky. What quality will best serve your trading in the foreseeable future? In this video, Sami explains: – How IWM is similar to Bitcoin – What every trader’s goal should be – Why he’s going with long-term swing ideas – What he’s looking for the 20 ma to do in ACAD – The two ways for stocks to correct
Continue Reading -->My Plans for Trading Crypto
Sami expects both Litecoin and Bitcoin to continue higher. Find out what he plans to do for his positions in both stocks, how long he plans to hold them and what patterns he’s watching. In this video, Sami explains: – What happened to Litecoin right as he got on the mic – How to recognize a 1 2 3 pattern – Why Bitcoin is a long term trade – How the market reminds him of Game of Thrones – Which pattern can be found in BCRX and BLDR
Continue Reading -->Bitcoin vs. Dogecoin
This Week’s Double Watchlist is here! Jump in and find out: Why we’re at risk of a breakout failure Why Bitcoin could take the lead from Ethereum (and yes, Dogecoin…) Where Sami would get in Bitcoin Why GameStop (GME) could be ready to rock Sami’s view on McDonald’s (MCD) And more!
Continue Reading -->Why I Like Apple
Jump in and find out: Why Sami actually likes Apple (AAPL) now How he feels about Facebook (FB) The interesting setup in the QQQ’s When a buy setup triggers How a head & shoulders pattern works Whether IWM can break out… or break down Which major ETF might start leading And more!
Continue Reading -->Two Trading Mistakes That are Holding You Back
So you think you’re doing everything right but STILL can’t boost your P&L? It doesn’t matter how well you read charts, understand market trends, or how many newsletters you read, you’ll never be successful if you keep making these two mistakes. When I started trading, I had to learn these things slowly, the hard way. Now I’m sharing them with you so YOU don’t have to. You make choices based on what you think should happen In 2007, I quit my job and started trading full-time. That year, the market tanked and continued to be bearish for almost two years (this is probably the reason I like to short rather than play long). To me, Radio Shack was the most obvious stock to short. I thought it was outdated and overpriced. For proof, I needed only look at my local Radio Shack, which was always empty. I thought this would be easy money. The market didn’t agree with me: No matter how bullish the stock looked, I thought it had to go down. Eventually, in January 2014, the stock did turn bearish: I went short at 80 cents, thinking the stock had to go to zero. Then — just a few weeks later — I saw the stock triple off the lows and I had to cover my position. My preconceived beliefs about what should happen COST ME MONEY You could be the smartest person in the world, but if you come to trading with preconceived ideas about what should and shouldn’t happen, you will lose your shirt. This is especially true if you’re like me, coming to trading from a successful career in finance and thinking you understand market trends. Look at all the people who got burned over the years shorting Tesla because the company was losing a million dollars per car. They thought there was no way Tesla could make it. Now, they’re the fifth largest company in the US. The choices you make in the market should be based on what the market is telling you, regardless of your internal monologue. To become a better trader, do away with notions of what should or shouldn’t happen. You don’t understand your personality Not Everyone should take the Same Strategies! Too many new traders think that, to be successful, they just need to understand chart patterns. Chart patterns are a dime a dozen. You can Google them for free. Here are sixteen: Your goal shouldn’t be to recognize these different patterns. Your goal should be to recognize which of those patterns work best with your personality. I talk about gaps, climactics, breakouts, pullbacks. These strategies make the most sense for me and my personality. You need to discover which work best for you. “In trading, as in archery, if there is effort, force, straining, struggling, or trying, it is wrong.” – Jack D. Schwager, Market Wizards Jack Schwager started as a struggling trader who could never get his account above $100,000. So, he decided to interview the world’s best traders, assuming they all traded the same way. He came to realize that no two of them traded alike, but they all traded in line with their own personality. The best traders in history play to their strengths. Learn what kind of trading YOU like, what kind of trading YOU are good at. Do you like to day trade or swing trade? Trade with the trend or counter-trend? Do you like to scalp or hold all day? It took me a long time to find out which strategies best suited me. Once I did, I never deviated from it. You have to find a way of trading that suits you.
Continue Reading -->How to Write the Perfect Trading Plan
When the market turns unstable, what do you do? Panic sell? Seize the moment and start gambling? If you want to wade through the treacherous waters of a volatile market and come out with your P&L — and your dignity — intact, you need a trading plan. Creating a trading plan can help you reset so you can take advantage of market volatility. I can’t guarantee that a trading plan will make you successful. But I can guarantee that you’ll fail if you don’t have one. This is an ambiguous topic that a lot of people struggle with, including myself in the beginning. In this article, I’ll show you how to make a trading plan that will work for you. HOW TO WRITE THE PERFECT TRADING PLAN Most people are terrified to make a trading plan. Once you commit to a plan, YOU are responsible for the results. As humans, we prefer to avoid taking responsibility when things don’t go our way. But when you have a plan that tells you what you can and cannot do, you have no choice but to take responsibility. In this process, your ego will get bruised and you’ll have no one to blame but yourself. This is required for growth. A plan is ESSENTIAL to boosting your P&L long term. Having a plan will allow you to move forward systematically. You’ll be able to notice what is working and do more of it. You’ll also notice what isn’t working and eliminate it from your trading. As you look over my trading plan, keep these things in mind: This is a template to create your own plan Start conservatively. Set easy, modest goals and create simple rules. Tweak your plan as you gain experience My Trading Plan Table of Contents: GOALS AND OBJECTIVES To start your trading plan, define your goals and objectives. “Goals” are your overarching intention. “Objectives” are the criteria you need to establish so you can meet those goals. My Goal: Trade well by finding setups that strictly meet my strategies (as outlined in my trading plan), and execute them flawlessly. My Objectives: Batting Average: >= 60% Sharpe Ratio >= 2.0 Risk to Reward >= 1:2 # of Trades/Day: 7 * Batting Average – Number of winning trades divided by total number of trades * Sharpe ratio – the average winning trade divided by the average losing trade * Risk – the difference between entry price and stop price * Reward – the difference between entry price and target price You can tweak these objectives to best suit your lifestyle and reach your goals, but I find it’s best to avoid improving one stat at the expense of the others. There are four things that make money: The frequency of your trades The risk per trade The sharpe ratio Your hit rate Below are some examples of how altering just one of these factors can drastically impact your P&L: In example 1, by hitting those four metrics in one year, you can make over half a million dollars (gross). In example 2, if your risk per trade doubles, your gross profit doubles. In example 3, by reducing your number of trades per day from 6 to 4 (by only jumping on the “perfect trades”), you see a 33% drop in your P&L. In example 4, if the sharpe ratio changes from 2.0 to 1.5, P&L is again severely impacted. In example 5, if the batting average is lowered from 60% to 50%, P&L again drops by one third. By even slightly messing with these four metrics, your gross profits can be altered dramatically. Step by step, set goals for yourself to see if you can improve these metrics over time. MONEY AND RISK MANAGEMENT This is what keeps the account safe. These are rules that tell you when you need to quit. My Goal: 2R’s per day, or 10R’s per week Figure out how you are going to protect the majority of your gains for the day. When unrealized gains (gains on open positions) reach 2R’s, I trail to protect gains to break even. ex: If I am up 5R’s, my stop goes up to 3R’s I also have rules for realized gains ex: If I am up 5R’s, I protect 4R’s I have rules for Open Exposure, rules for Maximum Loss for day and week, and what to do if they are reached. In the past, when I maxed out for the day or week, I would “escape,” not wanting to face the music and take responsibility. Now I have rules in place to prevent me from experiencing maximum losses and help me get back on track if I do. ENTRY REQUIREMENTS In order to enter a trade, I look for: A trade that fits a strategy in my trading plan and has a clear setup ex: if i have a gap strategy, that doesn’t mean I can trade anything that gaps. I have to have a clear setup. A stock that has hit the entry price (unless it’s a base breakdown or the stock is on an uptick). NO RE-ENTRY unless it’s a Climactic Buy or Climactic Sell Setup. Most people are better off not trading the same positions because they end up “revenge trading.” Instead of taking a small loss, they end up taking a huge loss. Decide for yourself what will make you pull the trigger on a trade. What does the chart need to look, feel, and smell like? ENTRY TACTICS/STRATEGIES The bulk of my trading plan is made up of three strategies that best suit my personality. Gap strategy for the morning session. 15 min Strategy to plan certain strategies off the 15 minute chart. I chose this strategy because it’s the perfect length of time for trading in the afternoon. Stops and patterns don’t hold on shorter time frames later in the day. Climactic Buy Setup I use for late morning and early afternoon. List any and all
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