Market uptrend re-enforced

I see that today the market is coming off of the resistance at the blue 50 SMA, a nice setup for a continuation of the current uptrend and welcome news to my mostly long positions.


I debated whether to cut some losers of follow the plan of the trade services to the "T" and hold the positions. The ideal plan, as I have always said when using someone else's strategy, is to be able to trade the plan the way they envision it. With the options trades that I am following now the strategy is not so much to treat the entire capital as a possible loss but to allow for the possibility that it may be if the trade does not go in my favour.

I think I mentioned that I will be downsizing my trades again in order to allow a smaller loss while following these plans. My new Maximum Loss Allowance will be in the $120 range and this will be the maximum capital in the option trades...so position sizing as follows:

$0.15 - 8 contracts
$0.20 - 6 contracts
$0.25 - $0.30 - 4 contracts
$0.35 - $0.40 - 3 contracts
$0.45 - $0.60 - 2 contracts
$0.65 - $1.20 - 1 contract

The first week of gains when I cleared $1000 net I was using many positions in the one or two contract size. I may yet make some profits from these positions (two accounts are at breakeven and the third has one third of the trades in the green...all were in the red last week.

The drop in position values made me take another look at the track record of the services I am using right now. In one case the old record is actually pretty good. They are, right now, closing trades that were opened before I started and many are in the 300% and greater return. Three today were like that even though I know that other trades are languishing.

I will be setting up one margin account this week to take advantage of trading spreads as some of the strategies used are of that style. As well I am transferring most of my RRSP over to the Optioneer account this week as well.

All in all I feel fairly confident that my plan, going forward, is going to work out nicely and I expect to see some gains in the near future to justify my time spent getting into the trading in the manner that I have. While I don't anticipate replacing my income this year, or even next year, I will be able to gauge a timeframe when that might be possible.

Jeff.