Sold 1 of 2 contracts with COP just now because I think it is at an area that could form resistance and I want to lock in some profits since it is up a decent amount today: Thoughts The majority of my positions looked dead in the water yesterday and I saw a decent drawdown in my account. However, because of my wider stops, I was only stopped out of two trades in the last 24 hours (CRM and KBH). I have been watching stock via my entry level chart (15m) too much and not my overall chart (240m). It makes me more susceptible to whipsaw and losing sight of the big picture. I am working on rectifying that currently. Account Maintenance I am thinking about reducing my 401K contribution (no less than what is necessary to get the full company match because that's free money) and directing more money to my regular trading account so that I can increase my trading account size. They say you should contribute 10-15% of your salary to retirement. Currently I contribute about 11% of my salary to my 401K but I also max out my Roth IRA separately so I can afford to redistribute some of my earnings I believe.
Current holdings Spoiler COP CSCO CVX SPY WPM AAPL (In my retirement acct) Currently Stalking Spoiler FSLR WPX HBAN MTG PHM HPQ Reason for Entry: See illustrations below: Stop information: Target stock price: $22.64 (or wherever my position's profits are 3x my stop loss) Concerns The moving average on the 240m chart is lagging below a bit. The stock made need time to consolidate. Alternatively, I feel like I could've possibly used a tighter stop in the 21.40s area. Positives Even though it is a wide stop, I like my stop placement. Also, HPQ's Earnings Report is not for another two months so I can sit in this position if it chops around for a bit. F Reason for Entry: See illustrations below: Target stock price: $13.47 (or wherever my position's profits are 3x my stop loss) Concerns The only concern I have is that Ford could also potentially be a long term investment in my IRA. However, I will likely wait until after the Earnings Report before I decide on that one. Positives The past 2-3 days have been range bound and so there is a lot of pressure building up potentially. Makes me wonder whether I should tighten my stop and increase my positions sizing... Hmmm
COP has hit the 3x reward mark. Going to have to watch it more intently so that I can sell on any major signs of weakness and lock in profits.
CVX has hit its profit target as well. I have a stop in place if it retraces but I am letting both contracts ride for the time being.
Closed one contract of CVX after an intraday pullback from the highs. Used the one minute chart to hone in on price action:
Great posts. I love to swing trade with deep ITM options. It gives you a leveraged exposures to the stock. I would love to know what option do you usually trading with? Monthly or quarterly? I found that monthly options can lose a lot of intrinsic value during a big market move against your position. Hence I have been moving toward to quarterly options lately.
Jumped into SU Now my trading portfolio is currently overweight Oil/Gas plays at the moment (Positions in Suncor, Chevron and Conoco Phillips). I have already hit my price targets for COP and CVX so I will aggressively move my stops higher to try to lock in profits and rebalance my portfolio to other sectors. Overall though, the Oil play looks like the big one for 2018 given how some of these Oil ETF charts are lining up such as OIH and USO:
Thanks Wolfy. I used to be more concerned with double bagging than overall profits. Switching to DITM options has proved beneficial to my trading strategy so far.Glad to see I'm not the only one using leverage in this way. I think you meant extrinsic value instead of intrinsic value in your comment? Intrinsic value (how much a position is is ITM) changes at the same rate whether you are trading weeklies/monthlies/quarterlies/LEAPs. (ie: If you are $2.00 ITM and the price goes against you $0.40, your calls will all be $1.60 ITM regardless of time left. Right now I typically use monthlies that have ~1 month until expiration. I definitely would prefer to use monthlies with 2+ months to expiration or quarterlies, but since I don't typically hold through Earnings Reports, I don't want to pay extra for options that are expensive because an Earnings Report takes place during the time to expiration. As a result, I usually buy options as far out as I can that doesn't overal the earnings report. Since a lot of companies are reporting in the last week of January, I have had to grab January monthlies for most of the plays I am interested in the last few weeks. Since it is only one month away, the rate of decay for my options are faster, but because the options I am holding are DITM, the % of the option price that can decay is typically about 10-15% only. I read Options As A Strategic Investment and one thing it explained to me was that the benefit to buying DITM options with a delta in the 0.8 - 0.9 range is that if the stock moves against you, the delta decreases and so your losses are less than if you owned the equivalent in stock, but conversely, if the underlying goes in the direction you want, the delta increases. In other words, when if the stock moves against you $1, you might lose $0.76, but if the stock moves in the direction you want, you might stand to get $0.94. (I randomly chose some #s but you can get a rough idea by focusing on an option's Gamma which is the rate that the delta changes) I have been looking more and more at the idea of trading ETFs so that I don't have to plan around Earnings Reports. I will definitely look more into quarterlies since I forgot that they tend to be more liquid
AKS (Executed this morning) Reason for Entry: Switching things up a little here. My position in AKS is a calendar spread. In the long run this will be an Earnings Report play, but in the short term, it is a bet that the stock is overextended and that the stock will not hit $6 by January expiration.I have sold the $6 January Calls and bought the $6 March Calls. Stop information: No stop on this one. I only have $210 invested though so that is the max I can lose. Once I get more comfortable with the strategy, I will use the delta to create larger positions. Target stock price: Below (but near) $6 in January and above $6 in March (preferably thanks to the 1/30 Earnings Report) Concerns I am buying into strength.There is a possibility that AKS just keeps going higher and higher. Alternatively this can sell off and go lower Positives It feels good to execute a new strategy and add layers to me trading. The bull market won't last forever and so I need to be ready to have alternative means of making money if the markets decide to head sideways for a bit. From a mental standpoint, I think that once I reduce the cost of my position, I will be able to look at the position more objectively (like I am currently doing with CVX and COP) so I think the strategy will lead to sound trading as the overall risk is relatively low.
Closed out my positions in CVX and COP on pullbacks. Still holding onto SU and WPM Also, I opened a position in IBB but I think I might be premature so I will look for the sidelines if it shows any weakness
Profit target was hit on SU. Sold two contracts, holding onto 4 remaining contracts. Feels like I got the hot hand right now but I definitely got some sobering insight when I started reviewed my 2017 trades over the weekend. I still have a couple more trades to analyze but I am a lot more aware of the price of mistakes and bad trades. In a game as open as trading, eternal vigilance is the price of liberty.
Hey you! Yes you reading my thread! I don't care if you are a lurker or a regular member. Please go sign up in the Stock Picking contests so that there are a healthy amount of competition. Bigbear has some interesting stuff planned for 2018 but it is all dependent on participation. Best stock in 2018 Competition Stock Performance for Q1 of 2018 Competition Stock Performance for Week 1 of 2018 Competition Take some time this weekend and submit your picks!
Good day for SU today. Jumped in and out of IBB for a scratch trade. Did some DD today in case opportunity presents itself in the near future: VRX Reason for Entry: Consolidation after showing strength. Has the potential to be a runner. The stock market appears to be giving a big "screw you" to Bill Ackman after he lost over a billion on VRX. Stop information: See chart Target stock price: $23.81 or 3x risk Concerns It is up 79% since it's last Earning's report. I am going to reduce my position if I see any signs of weakness Positives Bulls still appear to be in control after a selloff was faded. XOM Reason for Entry: Oil stocks have been running recently. XOM has not but is consolidating near a key price level Stop information: See chart Target stock price: $86.30 (or when profits are greater than 3x risk) Concerns It isn't a pattern per say, just a decent price area that I want to try and take advantage of. It is possible that the oil sector needs a breather soon though which might cut a move short potentially. Also, my entry is not the recent high but when price moves beyond the current price range Positives It is lagging the rest of the oil stock but is in a prime position to catch up in a hurry DHI Reason for Entry: Low Risk/High Reward trade with a tight stop Concerns Very low volume to end the year makes me a little curious if it will have the strength to push higher. Hopefully moving out of the range attracts buyers. Positives Really tight range means that I can get a few and can increase my position size slightly. Let's see how this plays out.
EYES Reason for Entry: Great long term chart. Concerns Option chain only goes out as far as July 2018. Also, it is hard to know when to get out of a position like this outside of watching your P&L arbitrarily. If (and this is a big IF) it makes it to the $3.50 area I will look to lock in some profits Positives This has potential to run imo. I grabbed a couple contracts and will see how it plays out over time. SNAP Reason for Entry: Another Calendar Spread for an Earnings Report play: I bought January calls that I want to expire worthless but I want SNAP to be close to $16 heading into the Earnings Report scheduled for earlier February. Concerns Even if the trade initially goes my way, there is a chance I lose all of my money if the Earnings Report sucks. Positives I am only risking my standard pricing if the trade goes against me. I do like the idea that I am trading smarter and putting the odds in my favor by trading into an Earnings Report now instead of buying a contract right before the news is released. I might be able to take advantage of an increase in Implied Volatility as well if I am lucky. One other thing I was thinking about was playing Earnings by having a Calendar Call Spread and a Calendar Put Spread with the short options expiring leading into the Earnings Report, and the remaining position being an Earnings Report Straddle. I need to find the right set up to try that one out though.
Filled on my SNAP calendar spread. Also, I sold another third of my SU position into strength: No fills on the other orders I placed last night. Markets appear to be consolidating still as far as my potential positions are concerned.
i concur! thx a ton for spreading the word @BermudianOption i much appreciate it. here's to a happy new year to you and yours! i hope you had a really awesome holiday season and thank you for all of your amazing contributions on the forums! keep up the great work.
2017 Year in Review Well 2017 is in the books. I only started trading in Q3, but overall profitable. Managed to outperform the S&P 500 as well in terms of return. My IRA didn't do as well, and I don't have a huge account value so it isn't an apples to apples comparison necessarily but it definitely shows the power of leverage and that I am making strides as a trader: Stats 34% of my trades are winners yet I am still profitable. My winning trades tend to be 2.86 times bigger than my losing trades: Winning Trades average: 2.06R Losing Traders average: -0.73R Areas I will work on in the new year The Greeks: I may need to follow @Wolfy a bit here and buy more time even if I don't plan on holding extensively. I think that theta has been eating away at some of my positions that take longer to get going. Drawing more Trendlines: Outside of ascending triangles, I focused almost exclusively on support/resistance levels. Trendlines give more context to market movement and trade opportunities so I plan on utilizing them more Better identification of a trending stock vs a range-bound stock: My review shows that there were instances where I envisioned a brea Alter your strategy for overextended stock: There are a handful of times in 2017 where I entered a stock that was already up pretty high. In the future I will either sit on the sidelines or aggressively move my stop after any signs of weakness Keep my IRA and my Regular Trading Account Separate: I don't need to mix and match timeframes. Consistently review trades on a weekly/bi-weekly basis: I have a lot more direction and insight on my trading after this review. I need to look for insights and ways to improve my trading/trading edge on a regular basis. Set clear, S.M.A.R.T. trading goals: Without goals, you cannot be held accountable. Without goals, you cannot track progress. Without goals, you severely reduce the likelihood of success. I will use S.M.A.R.T. goals in the future Bring your creativity to the markets: My strategy thus far has been profitable so I don’t want to completely revamp it, but there has to be ways that I can improve my understanding/viewpoint of the markets. I will ask myself questions and work on my knowledge base so that I can become even more efficient. Areas that I excelled at in 2017 To end 2017, my stop placement has been fantastic. There are more occasions where the stock has to go against me in order to be proven wrong I have worked on systematically pinpointing what I perceive are flaws in my trading strategy and implementing fixes I can't recall trading on tilt at all in 2017 I documented my reasoning prior to entering trades which makes review much easier I made strides when it comes to managing risk I started utilizing time spreads I held onto a core position in SPY in my portfolio so that I stand to make money even if individual stock picks don't work I brushed myself off and got back on the horse many times after big down days.
Plans for 2018 Areas that I want to dig into further in 2018 Statistics I am interested in how even random price action is often partially predictable based on probabilities Price action trading: I want to supplement my current trading strategy with a better understanding of price action outside of pattern recognition Increasing the size of Option Spreads: Currently I don't use a lot of size for Calendar spreads or Vertical Spreads. Once I become more confident in these strategies, I would like to increase my size so that they have similar capital allocated as my single leg positions. Trading within a neutral/bearish market: There is nothing to suggest that 2018 will be Neutral/Bearish but the Bull market cannot last forever. I want to stay ready so I don't have to get ready. Swing-trading Futures contracts: I think that Futures trading has the most amount of people trading for a living. I want to create a better understanding of the Futures markets to see if I want to head in that direction. Personal trading psychology: I feel like I was pretty level-headed in 2017 but I did stress a few positions going against me. Also, I found myself 'wishing' that the markets would go in my direction which means I was exposing myself to bias often. I am going to dust off and reread my copy of Trading in the Zone to nip this in the bud. Trading on/around Earnings Reports: I have avoided Earnings Reports thus far but I want to delve into strategies that capitalize off of the volatility. 2018 Goals The overarching theme for my goals is a larger account size. Obviously everyone wants to make more money in the markets, but for me, it is less about greed and more about strategy. With more money, the volatility of the markets (and the ensuing drawdowns) won't be as stressful. Additionally, with more capital, I am afforded multiple avenues to make money such as Futures trading as well as options strategies with margin requirements. Lastly, if I choose to do, I can increase my position sizing and potentially reduce my Risk:Reward ratio if I want to tackle shorter term timeframes. Here are my goals: Level 1 Review my 2017 Trading Year: I can cross this off the list. Invest 45% of my paycheck into my trading account on a monthly basis: Last year, after realizing how low the interest rate was in my Savings account, I scheduled a monthly investment into a Vanguard Mutual Fund for about 1/3 of my paycheck. In 2018, I am bumping that number up to about 45% and rerouting the money straight to my trading account. Switch Brokerages to lower commission costs: e*Trade have been good to me but money talks and TastyTrade is talking sweet to me. I am going to reach out to e*Trade in the near future to see if they can negotiate over their commission, but I have a feeling they cannot compete with TastyTrade. I do need to get better acclimated with their platform. Surround myself with excellence: The idea of trading for a living is a possibility. The more people around me reinforce that, the more attainable the goal feels. I will download Twitter on my phone and subscribe to traders I respect and admire. Level 2 Outperform the S&P 500 in a Quarter: It is the benchmark, so why not Win 40% of my trades in 2018: Currently I am profitable on 34% of my trades. Increase the expectancy of winning trades to 2.5R: Currently, my winning trades average 2.06R. Ideally I’d like to see that number @ 3R but ‘winning’ trades will include scratch trades which pulls the average down. +50% return: Optimistic but we shall see. Have a 5R Trade: Gotta let those winners run right? Level 3 Increase my Portfolio Value by 150%: This includes profits AND monthly deposits Average 10% per month in returns: That type of consistency and returns are asking a lot but I'm up for the challenge. If I plan on trading for a living down the road, I need to get used to setting and reaching targets. Outperform the S&P 500 Annually: It is hard to argue luck if I consistently outperform the benchmark all year. Have a 10R trade: I can dream can't I? 2018 Rewards A little incentivization never hurt anyone. I forced myself to have 20% returns on sim before I placed my first trade ever. Here are rewards for each corresponding Goal level. My thoughts are that when I complete a goal, I get to choose a reward from the same level: Level 1 Renew my subscription to my favorite trader's regular market analysis Purchase a table for my apartment Level 2 Purchase a two-year subscription to the Pro level of TradingView Telephoto camera lens Level 3 Buy a flagship laptop Buy a flagship phone Move into a more expensive apartment Trade full-time?
ZNGA Entry & Stop Placement: Stock has undergone consolidation and has the ability to break above resistance as well as a wedge: Target stock price: $4.42 or whenever profits are 3x Risk Concerns This stock was appears to have bouts of illiquidity occasionally which makes it harder to trade. Positives If this goes against me, the stock will likely be breaking down. Set-up Grade A-
