Welcome Stockaholics!

We are a new and fast growing financial forum! Sign up for free and let's talk stocks!

  1. Do you want to help develop this community? We are looking for contributions from investors and traders like you! What stocks do you follow? What is hot right now? Sign up and get in on the ground floor of the newest, fastest growing financial forum!
    Dismiss Notice
  2. You will notice a live chat widget on the right. Click in to join us and lets hear about how you nailed that last UWTI trade!
    Dismiss Notice

BermudianOption trading journal

Discussion in 'Trade Journals' started by BermudianOption, Nov 21, 2017.

  1. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Writing in a new journal to keep myself accountable. I will try to spell out my rationale for trades and review what goes right/wrong.

    The markets went in my favor in a nice way today which always feels good. I have a date later today but I want to find some time before the market opens tomorrow to set some stops and work on ways to manage my risk instead of being complacent and leaving unnecessary $$$ on the table.

    Thoughts
    • Currently I am thinking about upping my position sizing next year after adding my 2018 contribution to my Roth IRA.
    • Typically I would only trade options that have penny spreads. However, in the past few months I have focused on reducing risk by buying deep-in-the-money options. This is relevant because once an option is valued at over $3, it turns from a penny spread to a nickel spread. I have had some success trading these options as well. As long as I am not buying too many contracts, slippage has been minimal. Of course this doesn't really look on the other side of the spectrum when the markets are selling off and market makers screw you over....
    • Since I exit stocks when the price action heads lower, I will never realize 100% of the profits that I see and I need to work on being ok with that. I sometimes get caught up watching the P&L which is not good technique.
    • I know where my stop is when I do my research in the evening, but in the morning, I have to reevaluate my position after an order is triggered. I will create a rule to resolve this.

    Random Rules
    • There needs to be an Open Interest of at least 1,000 for me to trade an option right now.
    • I will post the expected entry, stop loss, delta and target price of future positions to give myself more structure.
    • I will take a look at TraderVue to see if it is worthwhile to restart a paid subscription.
    • I will remove pricing info from my online broker so that I don't get caught up watching P&L.
     
    T0rm3nted likes this.
  2. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    I have an existing position on Home Depot of two contracts.

    This morning, I sold one contract of HD into strength. The stock is up just under 4% since I entered but because I shifted from speculative out-of-the-money options into the more conservative Deep-In-The-Money options, a 4% move can still be a profitable endeavour.
     
  3. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    I like the way UNH is shaping up but having trouble finding an option that doesn't have a wide spread:
    [​IMG]
     
    OldFart likes this.
  4. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    I have a few months but I need to read up on protective options ideas leading into Earnings Reports. I don't want to leave my P/L up to the whim of Earnings Reports. Likely I will turn my directional positions into straddles with limited upside protection.
     
  5. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    FB

    Daily chart:
    [​IMG]

    How far away is my stop from my entry:
    $1.88

    Target stock price:
    $189.4 (or wherever my stock position profits are 3x my stop loss)

    Special Notes:
    Increasing my stop size to accommodate for the distance between the entry and the stop price
     
  6. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Jumped into GRPN as well:
    [​IMG]
     
    T0rm3nted likes this.
  7. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Still managing my HD position. I want to take profits so bad but it is still showing strength at the moment.



    I got shaken out of an existing TWTR position this morning for a Reward/Risk Ratio of 2:1. Ideally I'd like to get 3:1 or better but c'est la vie. Got spooked and used my intermediate term (4hr chart) to exit the position when I should have used my shorter term entry chart (15m chart) to exit the position. You live and you learn.

    Anyways, it looks like TWTR was still setting up for a decent run so I re-entered a new position:
    [​IMG]


    Not too happy with my Facebook position so far today. It is underperforming relatively to the SPY
    [​IMG]
     
    T0rm3nted likes this.
  8. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Stalking for a trade. Have a limit order in the field if I sense a breakout happening in the next few days:
    [​IMG]
     
    T0rm3nted likes this.
  9. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    I have created a few short term trades (1-3 months) in my Roth IRA account since it has/had excess capital. However, my Roth IRA has a long term investment horizon, so ideally, it should comprise primarily of options that expire in +6 months at least.

    My Margin account is close to its limit in terms of cash positions, but I did the math on what using margin would cost, and if I completely maxxed out the account, I would be paying ~$2.40/day in fees.

    I will never max out my margin account though, and ideally I won't use the margin amount often but I will establish future short term positions in my margin account so that I am not strapped for cash when long term opportunities arise.
     
    T0rm3nted and StockJock-e like this.
  10. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Fully exited HD. Left a bit on the table but good trade overall:
    [​IMG]
     
    T0rm3nted and OldFart like this.
  11. StockJock-e

    StockJock-e Brew Master
    Staff Member

    Joined:
    Apr 3, 2016
    Messages:
    5,429
    Likes Received:
    1,281
    Thats not so bad if the holdings are going in the right direction!
     
    BermudianOption likes this.
  12. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Lol that is true for sure. I typically don't stay in losing positions for extended periods of time so hopefully I don't encounter the wrong direction margin trades for extended periods of time.


    Alright so now that the markets are closed and I've had a chance to decompress... today wasn't a great day of trading for me. I managed to steer clear of some potentially bad trades but, for the first time in months, I got stopped out in the same day I entered a trade (TWTR). I got spooked out of HD without actually having an exit strategy ready to go. I was overwhelmed by the amount of alerts that I was receiving thanks to the markets rallying, etc. I closed out my position in Facebook after I didn't like the price action as well FYI.

    Additionally, I liquidated a position in KBH yesterday before the stock ran higher 4% today. Sucky day but it is not the end of the world. At the end of the day, I still have a full-time job that also makes me money. Speaking of which, I was so invested in the stock market today (pun intended) that I hardly got any work done at my job. I am going to have to make up for it now at home. I will give a quick review beforehand and type up what I am watching tomorrow before I do that. Additionally, I still made money for my positions in my retirement account but I know that today had the potential to be a real money maker so I am a little salty over the unrealized profits that I lost.

    There are a lot of positions that I am trying to monitor at the same time, but outside of my positions that are overextended, I need to let the markets drift where they may and avoid micromanaging things


    I reviewed the HD trade already. For now, I will go over the rest of the short term trades I have throughout my accounts so that I am


    GRPN
    Reason for Entry: The Weekly chart looks amazing. The one issue I have is that I had trouble trying to find some long term options with a small spread so I had to settle for the deep-in-the-money options set to expire in January.
    [​IMG]

    How far away is my stop from my entry:
    $0.18

    Target stock price:
    $6.34 (or wherever my stock position profits are 3x my stop loss)
    [​IMG]

    Special Notes:
    Price rejection of $6 level today. On a retest, I may tighten my stops in that area.



    LVS
    Reason for Entry: The Weekly chart looks amazing and most casino stock looked primed for a breakout right about now:
    [​IMG]


    How far away is my stop from my entry:
    $0.67

    Target stock price:
    $69.52 (or wherever my stock position profits are 3x my stop loss)
    [​IMG]

    Special Notes:
    I like the potential this position has. With that said I will be moving the stop up shortly so that if there is a breakdown I can get out of the position and wait for it to set up again. If that happens, I will re-establish a position in the proper account
     
    T0rm3nted likes this.
  13. T0rm3nted

    T0rm3nted Moderator
    Staff Member

    Joined:
    Apr 2, 2016
    Messages:
    5,521
    Likes Received:
    919
    BermudianOption likes this.
  14. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    (These are all potential positions. Nothing is set in stone yet and I could yank them if I have second thoughts)

    BA

    Reason for Entry: Strong trendline, nice consolidation inside the triangle
    [​IMG]

    How far away is my stop from my entry:
    $1.30

    Target stock price:
    $272.02 (or wherever my position's profits are 3x my stop loss)

    Concerns
    These high priced stocks require tight stops. There is the potential for slippage for sure. I will say though, Home Depot was a similar trade and the stock went up about 5% and I was flirting with a Reward:Risk ratio of 5:1 before a pullback. Another concern I have is that it closed at the high today, so my stop is close to the close. If the stock opens higher in a small way and then sells off, I will be stopped out.


    MSFT
    Reason for Entry: Retesting all-time highs after a pullback
    [​IMG]

    How far away is my stop from my entry: $0.65
    [​IMG]

    Target stock price:
    $87.05 (or wherever my position's profits are 3x my stop loss)

    Concerns
    I don't want to overtrade and give back my profits, but I have to continue to enter positions when I see my setups.



    FSLR
    Reason for Entry: Always liked Solar plays personally. More importantly though, range bound trading through most of November for a high flying stock means lowered risk and higher reward if there is a breakout
    [​IMG]

    How far away is my stop from my entry: $1.2
    [​IMG]


    Target stock price:
    $66.4 (or wherever my position's profits are 3x my stop loss)

    Concerns
    Low concerns here. I think that if I get stopped out, I will be content with trying a good setup.
     
    #14 BermudianOption, Nov 28, 2017
    Last edited: Nov 28, 2017
    T0rm3nted likes this.
  15. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Appreciate the kind words man. You (and anyone reading this) should start a journal as well!


    Edit: Turns out I screwed the pooch on my margin ideas. You can only get margin assistance on 25% of a call/put IF it is over 9 months from expiration. Everything else requires 100% cash to establish the position.
     
  16. T0rm3nted

    T0rm3nted Moderator
    Staff Member

    Joined:
    Apr 2, 2016
    Messages:
    5,521
    Likes Received:
    919
    I had a journal awhile ago, but it got overwhelming for myself and I shifted to more of a long-term holder and not swing trading. When some time frees up again and my schedule becomes more normalized so I have more time to look at the market while it is open, I will definitely be getting back in to swing trading and get a journal back up and running.
     
    BermudianOption likes this.
  17. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Assigned a position in BA this morning.

    Price rejection for both FSLR and MSFT. Removing them from the watchlist for the time being. I have my eye on CZR but it looks overextended and/or in no man's land for the time being. It had a gap higher and looks like it is being faded by shorts:
    [​IMG]
     
  18. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    Not liking the price action so far today. Stopped myself out of BA and GRPN.
     
  19. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    I feel like we are in unprecedented times in terms of the markets continually going higher. With that said, still a little disappointed to stop myself out of BA and HD in what in retrospect, looks premature. With that said, I'm definitely glad to be out of the likes of FB and TWTR so it is all part of the game.

    Today I didn't check the markets at all during my workday and my day was less stressful. I have a couple calls on the SPY which were profitable and my LVS position did well also. I still feel like I could've made more money if I was actively trading, but I can't complain and need to figure out how to keep similar stress levels for all my trading days.

    After reflecting on yesterday, I think that although I stick to my strategy for the most part, tight stops are a way that greed creeps into my trading plan. If I had looser stops, I wouldn't make as much money but my stress levels would be lower and I wouldn't need to micromanage my positions. I am going to have to file that as a takeaway for the future.

    Charts I like:
    • ABBV
    • FSLR
    • MSFT

    Charts I like but are too overextended for me:

    • F
    • C
    • MGM
    • BAC
    • RF
    Takeaways
    • Make sure that my stops are based off of support/resistance and not the potential for large profits
    • Stocks will always run higher without you but they will also go lower after you exit as well. Don't take it personal. The market is not out to get you. It is all a numbers game. Keep your money management tight and eventually, you will ride a big winner.
    • I am going to focus on the positive in my trading and remember that everything is a learning experience. Stress-free is the way to be.
     
    T0rm3nted likes this.
  20. BermudianOption

    BermudianOption Active Member

    Joined:
    Apr 6, 2016
    Messages:
    231
    Likes Received:
    121
    ABBV

    Reason for Entry: Cup and handle on the Daily
    [​IMG]


    What is my stop level: $96.3
    [​IMG]



    How far away is my stop from my entry:
    $1.15


    Target stock price:
    $101.00 (or wherever my position's profits are 3x my stop loss)


    Concerns
    I acknowledge that the markets can go against me. I am content with this knowledge and view the overall setup to be ideal. I am not forcing my hand and I have a reasonably placed stop. Que sera sera.
     
    OldFart likes this.

Share This Page