SR POOL 30 P (IV: 45.8%) x4
16-Oct Tue, Entry 4.2 (26.09) $1680
19-Oct Fri, Exit 5.4 (24.46) $480, 28.6% profit
SR MCO 50 P (IV: 52.6%) x3
16-Oct Tue, Entry 4.4 (47.47) $1320
19-Oct Fri, Exit 4.5 (46.8) $30, 2.3% profit
IV is actually too high, but just to try out and also cos it's 20% SL vs 59% profit target. But once again, I'm unable to make money with high IV trades.
IAE FST 50 Straddle x2
SometimeAgo, Entry 5.1
19-Oct Fri, Exit 7.6 (46.8) $500, 49% profit
Still keeping the Put option worth 0.05c in case got jackpot.
Sunday, October 21, 2007
Wednesday, October 17, 2007
17-Oct
Currently holding these 2 trades. Have been losing on some BM and Investing trades. Reverting back to good old support resistance.
SR POOL 30 Nov P 45.8%
10-Oct-07 Stock ($) Option ($)
Weds Entry 26.09 4.2 0.0%
SL: 26.9 3.1% 3.30 -21.4%
Target 24.08 -7.7% 5.80 38.1%
Exit
SR MCO 50 Nov P 52.6%
10-Oct-07 Stock ($) Option ($)
Weds Entry 47.47 4.4 0.0%
SL: 49.1 3.4% 3.30 -25.0%
Target 42.8 -9.8% 7.00 59.1%
Exit 47.78 0.7% -100.0%
SR POOL 30 Nov P 45.8%
10-Oct-07 Stock ($) Option ($)
Weds Entry 26.09 4.2 0.0%
SL: 26.9 3.1% 3.30 -21.4%
Target 24.08 -7.7% 5.80 38.1%
Exit
SR MCO 50 Nov P 52.6%
10-Oct-07 Stock ($) Option ($)
Weds Entry 47.47 4.4 0.0%
SL: 49.1 3.4% 3.30 -25.0%
Target 42.8 -9.8% 7.00 59.1%
Exit 47.78 0.7% -100.0%
Tuesday, September 25, 2007
26 Sep: Mistakes & Reflections
I should not have adjusted the target for an Investing trade again. It gapped down the day after it went out and I could not capture that move.
For the 2nd time, I made the mistake of adjusting of an investing trade prematurely. The last time, it resulted in a 13% loss instead of a 60% profit. Now, it resulted in a 20% profit instead of a 60% profit.
Not only that, I've experiencing a bit of frustrations recently. Everytime I sell an option, it makes a nice move in my direction immediately after. Sometimes I hold it for a while more, and it makes a move against me.
Yesterday, I traded the Broader Market, but I'm afraid I have made a mistake. Although the broader market closed the first hour below the 22pma, by 11pm the Nasdaq is trading consistently above the 22pma. Sure, the rules say, "at 1st hour close", but nevertheless, the mixed signals make my trades a bit aggressive, and I quite regret entering the trades, esp with a combined potential loss of $600. Furthermore, I used to trade BM with SR, but this is a pure BM trade and I really needed to stack all the probabilities on my side that the BM is going to dip.
But there's a positive note to all these. In spite the mistakes, I have still be capturing good profits overall. But I know that I need to eliminate these mistakes. Anyway, I'm going to reinforce some rules for myself based on these situation.
1) The target of an Investing trade is always a 10% move.
2) Do not adjust the Target on an Investing trade before the last day. Do not adjust the stop loss before it tests the 22dma.
3) Exit positions on the market open on the 4th day open. Do not waste time refreshing the options chains continuously.
4) The entry requirements may be met on the 1st hour close. But if that changes when I am placing the trade, do not enter the trade, or conservatively.
5) Prepare for market open by examining the potential trades before 1030pm to give myself more time to consider trades. Have them keyed into my excel sheet and trade calculator so that I only need to make adjustments.
Previous Mistakes and rules:
1) Stop Loss using dma/pma +/- 1 must be tight enough by itself. Only use 1st hour high/low to further tighten. Do not enter trades it the dma/pma stop loss is >28%.
2) Always enter a trade only when you are 100% sure that has met the rules requirement. If there are any oddities that make you feel suspicious, make sure that you talk yourself through it to determine entry or not.
For the 2nd time, I made the mistake of adjusting of an investing trade prematurely. The last time, it resulted in a 13% loss instead of a 60% profit. Now, it resulted in a 20% profit instead of a 60% profit.
Not only that, I've experiencing a bit of frustrations recently. Everytime I sell an option, it makes a nice move in my direction immediately after. Sometimes I hold it for a while more, and it makes a move against me.
Yesterday, I traded the Broader Market, but I'm afraid I have made a mistake. Although the broader market closed the first hour below the 22pma, by 11pm the Nasdaq is trading consistently above the 22pma. Sure, the rules say, "at 1st hour close", but nevertheless, the mixed signals make my trades a bit aggressive, and I quite regret entering the trades, esp with a combined potential loss of $600. Furthermore, I used to trade BM with SR, but this is a pure BM trade and I really needed to stack all the probabilities on my side that the BM is going to dip.
But there's a positive note to all these. In spite the mistakes, I have still be capturing good profits overall. But I know that I need to eliminate these mistakes. Anyway, I'm going to reinforce some rules for myself based on these situation.
1) The target of an Investing trade is always a 10% move.
2) Do not adjust the Target on an Investing trade before the last day. Do not adjust the stop loss before it tests the 22dma.
3) Exit positions on the market open on the 4th day open. Do not waste time refreshing the options chains continuously.
4) The entry requirements may be met on the 1st hour close. But if that changes when I am placing the trade, do not enter the trade, or conservatively.
5) Prepare for market open by examining the potential trades before 1030pm to give myself more time to consider trades. Have them keyed into my excel sheet and trade calculator so that I only need to make adjustments.
Previous Mistakes and rules:
1) Stop Loss using dma/pma +/- 1 must be tight enough by itself. Only use 1st hour high/low to further tighten. Do not enter trades it the dma/pma stop loss is >28%.
2) Always enter a trade only when you are 100% sure that has met the rules requirement. If there are any oddities that make you feel suspicious, make sure that you talk yourself through it to determine entry or not.
25-Sep Trades
Today, the broader market closed the first hour below 22pma, confirming the start of a downtrend. I looked for stocks that have a potential downside move and trend similarly to the broader market. Entered the following 2 trades:
Entered the following 2 trades:
Note: AZO has 37% SL cos I chose the 115 P. If you chose the 120 P, you will get a 20+% SL. But I'm more concerned about the absolute amount, and I'm fine with a 340/740 loss/profit ratio.
Entered the following 2 trades:
| CLF | 90 | Oct P | 41.8% | Contracts | ||
| Stock ($) | Option ($) | 2 | ||||
| Entry | 83.67 | 7.6 | $1,520 | |||
| SL: | 86.12 | 5.9 | -22.4% | -$340 | ||
| Target | 78.5 | 11.6 | 52.6% | $800 | ||
| AZO | 115 | Oct P | 29.0% | Contracts | ||
| Stock ($) | Option ($) | 2 | ||||
| Entry | 112.6 | 4.6 | $920 | |||
| SL: | 115.2 | 2.9 | -37.0% | -$340 | ||
| Target | 107 | 8.3 | 80.4% | $740 | ||
Note: AZO has 37% SL cos I chose the 115 P. If you chose the 120 P, you will get a 20+% SL. But I'm more concerned about the absolute amount, and I'm fine with a 340/740 loss/profit ratio.
Monday, September 24, 2007
24-Sept: ThOuGhTs On TrAdiNg
For 1.5 months, I have been enjoying great success with trades that combine elements of SR with BM entry criteria. Eg, I only take SR Calls when BM is trending up, and I only take BM calls when the stock has just crossed a resistance level.
In the 24 Sept Audio update, Mirriam talked about taking stocks that failed to push through their all time high when the BM rebounds downwards. I've been capturing a lot of small moves and I hope I can finally capture a big move this time with one of these stocks.
I feel that after these 2 months of looking at charts, I can see patterns more naturally in these charts. The concept of moving averages and highs and lows as support and resistance levels become built into the way I look at a chart. I think it has moved beyond memory into understanding.
I don't mean to say that I understand why it acts as support and resistance. I suspect that technicals like moving averages work only because many people think they work. It becomes a self fulfilling prophecy. But most important is the ability to capitalise on it. Which is to enter after the 1 hour confirmation the day after it crosses the moving average.
I added up my trading profits and subtracted my losses and found that since my blog started, I have made about 100+ %. That is not to say that my account grew by 100%, since each trade is only about 1/4 of my account value.
I'm thinking I have a good chance of winning the July trading competition. Since the competition only counts successful trades, when I add the 90% gain from my first AZO trade (b4 my journal started), my total gains have reached about 240%. I hope to add at least 100% to it before the deadline at the end of Oct. =)
In the 24 Sept Audio update, Mirriam talked about taking stocks that failed to push through their all time high when the BM rebounds downwards. I've been capturing a lot of small moves and I hope I can finally capture a big move this time with one of these stocks.
I feel that after these 2 months of looking at charts, I can see patterns more naturally in these charts. The concept of moving averages and highs and lows as support and resistance levels become built into the way I look at a chart. I think it has moved beyond memory into understanding.
I don't mean to say that I understand why it acts as support and resistance. I suspect that technicals like moving averages work only because many people think they work. It becomes a self fulfilling prophecy. But most important is the ability to capitalise on it. Which is to enter after the 1 hour confirmation the day after it crosses the moving average.
I added up my trading profits and subtracted my losses and found that since my blog started, I have made about 100+ %. That is not to say that my account grew by 100%, since each trade is only about 1/4 of my account value.
I'm thinking I have a good chance of winning the July trading competition. Since the competition only counts successful trades, when I add the 90% gain from my first AZO trade (b4 my journal started), my total gains have reached about 240%. I hope to add at least 100% to it before the deadline at the end of Oct. =)
23-Sept: FoUr ThiNgs I LeArNt
In spite of a 30% loss holding a CTB investing trade through FOMC, my net returns the past 5 weeks (14/8 - 24/9) have been 105%. Since I trade very conservatively even with my virtual account, with an average of $1000+ per trade, so a 105% net gain means I've made about $1200+ in my virtual account.
I'm quite happy with these results, and I would like to recap some lessons that I have learnt since July.
Firstly, always buy stocks that are trading very near a support or resistance level, be it the 22dma for SR or 22pma for BM. This way, it is less likely to move against you, and when it does move against you, the move is likely to be smaller.
Secondly, be very patient to wait for suitable entry criteria before entering a trade. Most likely, you will only find a suitable stock once every few days. I've lost a lot of money searching for hours and end up force-entering trades. Some days, there just aren't suitable stocks to enter.
Thirdly, always buy options with small spreads. Rule of thumb: At most 4+% of option price. A $5 option should not have a spread greater than $0.20.
Fourthly, track every trade that you enter. Write down or talk yourself through the entry criteria, profit target, stop loss before entering a trade. Never allow yourself to enter a trade when the entry criteria is not fulfilled, even if it is just a virtual trade. I find tracking my trades in an online blog like this very useful since it gives me public accountability.
I'm quite happy with these results, and I would like to recap some lessons that I have learnt since July.
Firstly, always buy stocks that are trading very near a support or resistance level, be it the 22dma for SR or 22pma for BM. This way, it is less likely to move against you, and when it does move against you, the move is likely to be smaller.
Secondly, be very patient to wait for suitable entry criteria before entering a trade. Most likely, you will only find a suitable stock once every few days. I've lost a lot of money searching for hours and end up force-entering trades. Some days, there just aren't suitable stocks to enter.
Thirdly, always buy options with small spreads. Rule of thumb: At most 4+% of option price. A $5 option should not have a spread greater than $0.20.
Fourthly, track every trade that you enter. Write down or talk yourself through the entry criteria, profit target, stop loss before entering a trade. Never allow yourself to enter a trade when the entry criteria is not fulfilled, even if it is just a virtual trade. I find tracking my trades in an online blog like this very useful since it gives me public accountability.
Sunday, September 23, 2007
23-Sept: ABoUt MySeLf
hi everyone
this is my trading reflections blog. =) if u are looking for a record of my trades, scroll to the bottom of the page.
i'm an easy going person, but i tend to think alot, sometimes too much for my own good. well, what do you expect from a physics graduate.
this photo is taken from my favorite prata shop in jurong east. it serves 20+ varieties crispy prata, not the typical rubbery ones.
i just starting working, so i don't have much money to invest. so all my trades recorded at the moment are virtual trades.
but don't look down on my virtual trading. the net percentage returns of my trades, have exceeded 100% in just 1.5 months. =) that brings me to my first trading principle:
1) If you can trade $5000 to 10,000, you can earn any amount you want!
the principle holds true even if it is just a virtual $5000 to a virtual $10,000. it's just a matter of replicating it once you get the first step right... trading conservatively, doubling your capital can be done in under 3 months.
but first, you need a trading plan. that brings us to principle number two:
2) Never trade without a trading plan which includes entry criteria, exit strategy and stop loss.
it's a bad idea to put money in a stock market and hope. but that's what most people do. failing to plan is planning to fail.
the actions of 1 individual is impossible to predict, but the collective actions of millions of individuals in a stock market can be predicted with a certain degree of probability. certain price movement patterns indicate either a upward or downward trend lasting for few days to a few weeks. A trading plan is one where such an entry criteria and the potential price move is identified.
Glossary
Options
A financial instrument that derives its value from the underlying stock. I use it for two reasons:
1) As an leveraging instrument such that a 10% move in the stock can give me a 60-100% move in the option value.
2) To allow me to capture upward moves (Call option) or downward moves (Put option)
A financial instrument that derives its value from the underlying stock. I use it for two reasons:
1) As an leveraging instrument such that a 10% move in the stock can give me a 60-100% move in the option value.
2) To allow me to capture upward moves (Call option) or downward moves (Put option)
Subscribe to:
Comments (Atom)