Got an alert for NEM and jumped in: Got January expiration because of February because of lack of Open Interest on the back month. High delta though so hopefully I don't have too much theta exposure.
Got filled on my contingency ZNGA trade. Exited almost immediately because of the subsequent price action:
TWTR Entry & Stop Placement: Showing strength going into the close. I know TWTR has the ability to run quickly as well so I am anxious to get involved. Target stock price: $26.13 (or whenever profits are 3x Risk) Concerns I dislike entering trades when I can get a fill at the open right before the stock tanks. Additionally, there is a longer term timeframe that the stock might retrace to before it breaks out: Positives This is a high flyer and so it has the potential to run fast and hard Set-up Grade B- MSFT Entry & Stop Placement: Showing strength going into the close. I know TWTR has the ability to run quickly as well so I am anxious to get involved. Target stock price: $87.87 (or whenever profits are 3x Risk) Concerns When the stock was above what I think is resistance on 12/29, it appears to have been faded pretty heavily. As a result, I am entering when the stock gets back above resistance instead of when the stock puts in a new high. We shall see how it plays out. Positives Forcing myself to rate my trades allowed me to think more concretely about this trade. I lowered my stop slightly as a result. Set-up Grade B+ TXT Entry & Stop Placement: I dislike my entry and that it feels far away from the stop, but I do like the placement of the stop Target stock price: $58.95 (or whenever profits are 3x Risk) Concerns The stock exerted a decent amount of strength today. Granted, it consolidated for a good week or so though so hopefully buyers regain control. I will be paying extra close attention if the stock gets around $59.6 as that was when the market faded the stock before. Positives Lots of buyers heading into the close. The fakeout lower might trap bears and give the stock extra momentum higher. Set-up Grade B+
Made money today. Always a good to say that at the end of the day. I do have buyers remorse as a few watchlist stock took off without me (XOM, RAD, UPS). The bright side is that I am doing something right in my analysis and watching the right kind of stock. Sucks that I got a fill on ZNGA at the high of the day, but it was also a great day because the studying I did over the holidays regarding price action already saved me some money when I exited ZNGA early. I was stopped out of DHI today for my first loss of 2018. I think it started selling off in a hurry because the bid/ask wasn't where I thought it would be and there was some slippage when I had to manually adjust my order to get out. Another learning experience and I think I will start to set price alerts in addition to stop losses in case price blows by my stop loss. Overall, the markets put up a new all-time high on strength and I don't see any reason to become bearish. If I get fills tomorrow, I will be almost 100% in the markets again which means increased reward... but also increased risk. I don't want to give back gains so I will be vigilant. I started seeking out more trader voices on the internet over the holidays as well. In addition to finally downloading Twitter on my phone, I started listening to a new trading podcasts as well. It is called Chat With Traders and I have already listened to 3-4 interviews on Stitcher. It is great to hear insight from people that for a living. One interesting tidbit from an episode I heard today was the idea of diversifying an options portfolio based on different expiration dates. That is an idea I will try to implement. Speaking of which, there is a lack of liquidity for Feb. expirations in the positions I am looking to get into so I settled for front month options. On the plus side, I did the math and the theta exposure is minimal because the positions are deep in the money. If they go against me though, I think there is a possibility that I will lose money at a quicker rate since there is no extrinsic value to cushion the blow of a move lower.
Stopped out of TWTR already smh. It gapped higher and the bears faded it. I think I should've stayed out of the position from the onset in retrospect which is why it was graded a B-. The idea of a runner was enticing but I should've been more patient. I was also filled on TXT and MSFT. Edit: 10:44am CST I still feel like I should've known not to enter TWTR. I think that was greed overtaking me a bit there. I need to only take set-ups that are graded B or greater. I cannot enter trades simply because the markets look like they are going higher. I have to find clean and easily definable setups that have less ambiguity than my watchlist yesterday. Clean and obvious areas where bulls have wrestled control from bears or vice versa. I stopped myself out of WPM today. The underlying chopped around and never really got going. With about 2 weeks until expiration, I don't have time for that kind of indecisiveness. For what it's worth, my IRA is starting to show signs of bouncing back. GLW is finally turning the corner and profitable. USO and OIH are perhaps the strongest assets in my account overall so far and I've had them for a max of about two weeks.
Another profitable day but it felt like it was in spite of my trading as opposed to because of my trading. I was tired today and it reflected on my thought process and decisions. It wasn't necessarily that I traded poorly but I feel like when the market is up +0.5%, I should be raking in the profits but instead I closed out 3 positions today (TWTR, WPM and NEM). Closing out these trades was the right thing to do. What I need to evaluate is whether getting in the trades was the right moves to make. Additionally, perhaps the expectation of being up big when the markets move higher is a sign that I am not as sound as I need to be from a trader pysche perspective. I am going to have to reread Trading in The Zone ASAP.
Sitting on my hands for the time being in my regular trading account. Yesterday I had a total of 3 day-trades in 5 business days so I felt the pressure a little. Currently I am down to 2 day-trades in the past 5 business days but I figured I can use a little break as I try to pinpoint what my optimal set up is. I started listening to Trading In The Zone. I say 'listening' because I started a free trial of Audible over at Amazon. I am going to cancel when my 30 day trial is up but they let you keep the book so win/win. I haven't gotten enough sleep the last two days so I need to work on that so that I have a clear mind when it comes to decision-making. Happy 2018 to everyone and looking forward to making some smart trading decisions!
MGM Entry & Stop Placement: Looking for a break of the trendline and the resistance level as a signal to enter. After the sell-off, bulls appear to be regaining control. A break above a key resistance area could have shorts covering in a hurry: Target stock price: $35.71 (or whenever profits are 3x Risk) Concerns There is some potential resistance at $34.50 that needs to be cleared as well Positives There are about 7 other stock I was interested in but I selected this one and shelved the rest. Definitely feels like a more concrete trade Set-up Grade A-
NKE Entry & Stop Placement: Decent attempt at a sell-off after the earnings report but Bulls caught it and it looks like a bull flag has formed since then: Target stock price: $35.71 (or whenever profits are 3x Risk) Concerns There is a potential for a gap higher and retracement. This time I am going to place my trade after the open. My stop will be placed below what looks like a support level. I know the support level was broken a few times but the stock was breaking down those times. If the stock breaks down again, I will be ok with being stopped out I believe. Positives There are about 7 other stock I was interested in but I selected this one and shelved the rest. Definitely feels like a more concrete trade Set-up Grade B (Stop placement makes me a little nervous)
Filled on MGM. MSFT has hit its profit target. It looks like it has room to run but the markets as a whole are extended. Decisions decisions. Missed NKE but will look for a retest of the potential support level
Great start to 2018 so far. The markets are resuming their push higher. Currently the speed higher feels little excessive so I am keeping an eye out for a potential pullback this week. I have about 3 positions I intend on managing in my main account. I believe my entries/exits could use some work so over the weekend, I read up on price action. I think it was time well invested. I finished review all of my 2017 trades as well. Feels good to go through and actively learn from my mistakes. One of my main takeaways is to become pickier with the trades that I open. I want to see multiple signals that a trade is in my favor prior to entry. Another metric I want to capture in 2018 is the chart set-up that leads to entry. At the end of the year I want to be able to see what works for me and what doesn't work for me. Happy trading everyone.
Stopped out of MGM today. TWTR is showing potential tomorrow but I will yank my order depending on premarket feels. TWTR Trade type: Symmetrical triangle Entry & Stop Placement: Decent trendline and also resistance level being broken: Target stock price: $27.55 (or whenever profits are 3x Risk) Concerns There is a potential for a gap higher and retracement. Positives If I am early in it doesn't break out, it could still trade sideways through time until it hits the trendline. It might make a push higher there. Also heavy volume on the push higher and low volume on the pull back. Set-up Grade B (I came very close not to trading this, but the support level at the bottom pushed me over the edge. I am content with the idea of being stopped out if this goes against me currently which is all that matters. I am currently thinking logically and can accept that it is a good trade, so if the market proves me wrong, so be it.
Position was deep in the money and my short calls were exercised last night so I am no longer in the position. Sucky timing because it gapped lower in a major way which means it suddenly had a greater likelihood of being profitable. Good practice on Calendar Spreads though. I will utilize them more in times of low volatility.
Holding MSFT. Showing strength at the moment even if it pullbacks a bit more. I sold one contract last week but I have 4 contracts still open so I am clearly bullish. If the potential breakout fails, I will be closing out my entire position probably though Edit: Still laughing to myself about the AKS situation. I have been waiting for a retracement as it was overextended and I get my short calls taken away from me the day before the huge drop that would have made the position profitable. C'est la vie. Onto the next one. Good learning experience about holding onto Calendar spreads and letting the cards fall where they may (within reason of course). Like I said before, I will be utilizing this strategy a lot more moving forward when stock look primed for a move higher in the long term. Edit 2: Turns out only one contract (out of 7) was exercised. I closed out the 100 short shares of AKS, so my portfolio is currently a calendar spread with 6 long + 6 short contracts, as well as a naked long call
MCD Trade type: Uptrending stock with Bears losing control. VWAP confirmation. Entry & Stop Placement: Specifically a break above prior closing highs Target stock price: $178.3 (or whenever profits are 3x Risk) Concerns Not the pattern trades I typically make but I like the price action story that the chart shows. Positives McDonalds is very near all time highs and there is little resistance overhead if it gets going. Set-up Grade B+ (The lack of a pattern makes me slightly nervous but I am ok with risking my money for this trade given the potential it shows me) WFT Trade type: Calendar Spread ($4.50 Calls leading into Earnings Report) Entry & Stop Placement: Strong sector with a lagging stock that is catching up. With that said, $4.20 resistance could slow it down, the 200MA could slow it down or the $4.50 resistance level could slow it down prior to the Earnings Report. Target stock price: $4.50 before the Earnings Report. Above $4.50 after the Earnings Report Concerns More than one thing needs to go in my favor for this to be profitable at expiration and then hold the position through an Earnings Report. I don't want to have too many of these trades where my wins/losses are decided by a coin flip aka an Earnings Report. Positives If this trade goes in my favor, I think the underlying has ground to run if it has a positive earnings report. I like the low risk, high reward potential. Set-up Grade B+ (Lots of resistance overhead will slow down the rally potentially for WFT giving me time for my trade to set up)
Now that I think about it, the chance of a gap lower is probably increased tomorrow morning. Probably should've decreased my risk, especially since the SPY put in a doji candle today. It will be a learning experience at the least
AAPL (Executed this morning) Trade type: Calendar Spread Rangebound stock with an Earnings Report . Entry & Stop Placement: Jan-26-18 177.5/Feb-02-18 177.5 Call Calendar Spread Target stock price: Below $177.5 before expiration. Above it after expiration or after the earnings report Concerns The stock could be retesting the bottom portion of the channel which means I could've got my spread for cheaper. Earnings Report is the day before my back month option expires so I have limited time to make a profit if stock is trending Positives If everything pans out I am risking 1R for some at-the-money calls during Apple's Earnings Report. Set-up Grade B+ I like the structured channel that price has been trading at. I think that a breakout prior to the front-month option seems unlikely. If there is a breakout leading up to the Earnings Report I will take profits and run.
MSFT may have found support. I have a sell order if it breaks lower: I would have preferred to have sold some contracts yesterday so that my risk today was limited. Like I said last night, learning experience. Bricks in the palace baby!
Not seeing any real opportunity right now. It is times like these that I wish I had enough capital to day trade. Will be stalking TWTR and NKE over the next few days
