Plans, plans, plans...

Plans always change...

I had decided to put my P&F chart trading on hold for a while and test only the trading service trades. Now that I have migrated most (all but 4 of 14) trades over to my TFSA I have a ton of cash sitting in my RRSP not being put to work. All my trades right now would easily fit into less than a $5,ooo account.

This afternoon I am attending, if you can call it that, a webinar put on as a training guide for the next service I am likely to try out...the expensive one. Should this look extremely good I may be moving most of my RRSP over as a longer term plan. It really looks promising now that I have had more time to tweak the trades and do a little varied back testing. I have some current live fake trades that are turning into profit mode so it is nice to see an active progression.

In the meantime, my plan is to re-introduce the P&F chart trading into my RRSP account but I will be concentrating on covered calls to generate a slightly different line of income. I may be able to use some of the advisory trades to do this but substitute stocks for the calls then sell the calls based on the stock holding rather than perform a true option spread. I have updated my option level to level 2 in that account now, minimum balance to do this is $2500 so I updated my TFSA as well.

Should the service trades look promising I will use mainly those but I will pick up to 10 stocks from my final list of 50 or so P&F charts that are the most promising patterns and use those as the basis of my own covered call trades. These are going to have to be under the $20 mark though as I need to be able to trade in 100 share increments in order to sell a call against them. That alone will whittle the selection down considerably. Even so, checking the option chains for activity that corresponds to my charts will be interesting. I don't have any fancy software to do that for me so I cannot get too many going for this as I will be using my broker platform for this...which is really restrictive when it comes to studies.

Should the RRSP not get transferred I will consider liquidating some of it and transferring into the margin account to top it off to $5,000, plus a bit, to allow me to perform spreads... $5K is the minimum required account value to do this. I think that I would not likely use naked option writing so I won't worry too much about getting the account up to $25K. Once I have that in place then I will investigate getting into strangles as that is where I can produce some nice long term low risk regular gains. That will just be a rather complicated dance and I am afraid that the commissions are going to be prohibitive or perhaps just restrict me to one style of strangle or perhaps just one side, a spread, for now.

Back to the downside of any trading in the margin account...taxation.

Plans, plans, plans.

Jeff.