Back to Earth for a moment.
I like planing ahead so I signed up for an entire year of the day trading service to save $1200 as there was a $100 monthly rate increase going in for June 1. Us charter members get to take advantage of this option.
Also in the vein of planning ahead I have been considering tracking the possible stock trades along side of the option trades in order to determine at what point trading the stocks make more sense than the options.
Pros for stocks over options:
-Larger trade sizes will not affect the trade overall
-Hold past profit target with moving stops to secure larger moves
-Smaller losses due to tight stop losses... if used
-Larger profits due to the option delta effect (ie: 50 cent option move = $1 stock move)
-Easier entry due to greater liquidity over options
-Getting into more trades as options run away... the stock may run but the trade is entered already
-Pre and Post market trading to secure profits
-Scaling into and out of positions easier
-Smaller commission rates for comparable underlying control
Cons against stocks over options:
-Larger possible losses due to option delta affect (ie: $1 stock move = 50 cent option move)
-Possible inability to sell certain stocks short
Hmmm.... Perhaps I am using the wrong account for my daytrading. If I used the margin account I might be able to trade the stocks right now. I could move the momentum options into the TFSA now as I have enough cash in there to do that and they are more profitable anyway. I think that I had best think more about this move as what I am doing now is working... besides, I have the momentum stuff well loaded right now and need to wait to unload it before the margin would be free anyway.
I plan to take the first week of July off of trading and that may be a good time to consider this sort of move... although it does not involve moving money, just switch which account I am trading from.
This month I will track the option trades more closely and also track the entry and exit prices for the corresponding underlying securities. I can easily set these trades up in Esignal and run a quick study on trailing stops and stock size comparisons. This will give me a target margin account size to watch for in order to know when I could make the switch without affecting my profits.
I notice that quite often a trade will be called out only to not get filled on the options. We will do one of two things, adjust the limit price up (if limits were suggested) or let it go. In either case it indicates that the stock has usually gone in the direction that was anticipated and, had I just entered a market order for the stock at the time of the call I would already be in a position to take advantage of the move. The downside... I cannot think of a downside in those two cases.
Anytime that a trade may not have been a good call I would be in a losing position whether in an option or stock... so order sizing may be important. Half sizes and scale in as the stock does what is anticipated or just keep tight stops. Often we take on trades that look very good at the start, they move against us, we hold. Occasionally increasing the options is called for but it is easier to add stocks at any point as not only is the commission less, the stock trade cannot affect the rest of the group's trade in any way at all.
While I got a bit rambly here the long and short of it is that I will compare all the trades in June as if trading the stocks as well... especially including those that run away and I would have been in. Then I will figure the cash needed to trade stocks in the quantities needed to see at least the same profits.
At least this gives me another numbers project to keep me busy instead of coming up with new spins on profits or ways to forecast the future returns.
Jeff.
Questrade, My direct access discount broker.
Sunday, May 30, 2010
Forecasting... Ultra Conservative to Hog Wild
As much as I thought that I wouldn't do another forecast to see where I might be using some arbitrary but reasonable numbers I guess I cannot resist. This time I am using my current performance profits and applying three different methods of trade size incrementation.
I need to keep in mind that this is only for the day trading account, tax free, but only one of three current plans in play.
The first choice is to just do what I am doing sticking with the current profit levels for the next 12 months based on 3 contracts per trade. While this is not exciting it gives a certain satisfaction in knowing that I could, if I wanted to, skim off all the profits and use them as an income all on it's own. Of course this is discounting any increase in trade performance or quantity...also discounting any decreases.
Profits in 12 months = $47,925
Keep in mind this would be the forecasted annual income...but tax free or equivalent to about $75,000 depending upon the marginal rate.
Ok, not bad but hard to live off the profits and still grow the account.
Choice two is to increase by one trade per month, as I am sort of doing now although I increased to 4 trades for the last week in May.
Profits in 12 months = $135,789
Much more like it. Even though the number is already great the thing to consider is that in 12 months the monthly income would be a smidge under $18,500 or $224,000 per year. Basically if I stopped increasing my trade sizes at that point my equivalent to taxed income is $344,000.
Considering that it only takes $250 per trade, on average, to increase the size by one contract it is pretty obvious that I can increase the trade sizes faster to get to the larger monthly profit target sooner than 12 months. So let's say I just add 2 per month. The maximum size in 12 months is 24 contracts... so I will have to close trades in lower volume chains in two or three chunks to avoid block trading exits holding up the trade and this may affect my executions a bit... I could shave 5% off the forecasts but I won't right now as it is next to inconsequential.
Profits in 12 months = $ 209,000
I won't bother to convert this to a pre-tax equivalent, the monthly income is $32,000 and the annual income if I just held water on the trade sizes is $383,000.
Nice. While time will tell how accurate this is I still feel that I am fudging against my future performance as there is an option to trade stocks once I have a certain account size that allows for large enough stock trades to produce similar profits. The best thing about those is that I can use tight stops initially and let trades go with VTSOs to capture greater profits and see lesser losses which should increase my profitability overall.
If I want to go really hog wild and put no cap on trade sizes, just use 10 contract exit orders I could, in theory...as I don't think this would work unless I switched to stocks and I have no real comparison numbers yet... another post.
Hog Wild profits in 12 months = $ 919,900
Trade size is 239 contract per trade, right, trade stocks instead. Annualized income $3,818,000.
OK... so somewhere in there will be where I fall... between about $50,000 and $919,000 in 12 months. How's that for a forecast range?
Jeff.
I need to keep in mind that this is only for the day trading account, tax free, but only one of three current plans in play.
The first choice is to just do what I am doing sticking with the current profit levels for the next 12 months based on 3 contracts per trade. While this is not exciting it gives a certain satisfaction in knowing that I could, if I wanted to, skim off all the profits and use them as an income all on it's own. Of course this is discounting any increase in trade performance or quantity...also discounting any decreases.
Profits in 12 months = $47,925
Keep in mind this would be the forecasted annual income...but tax free or equivalent to about $75,000 depending upon the marginal rate.
Ok, not bad but hard to live off the profits and still grow the account.
Choice two is to increase by one trade per month, as I am sort of doing now although I increased to 4 trades for the last week in May.
Profits in 12 months = $135,789
Much more like it. Even though the number is already great the thing to consider is that in 12 months the monthly income would be a smidge under $18,500 or $224,000 per year. Basically if I stopped increasing my trade sizes at that point my equivalent to taxed income is $344,000.
Considering that it only takes $250 per trade, on average, to increase the size by one contract it is pretty obvious that I can increase the trade sizes faster to get to the larger monthly profit target sooner than 12 months. So let's say I just add 2 per month. The maximum size in 12 months is 24 contracts... so I will have to close trades in lower volume chains in two or three chunks to avoid block trading exits holding up the trade and this may affect my executions a bit... I could shave 5% off the forecasts but I won't right now as it is next to inconsequential.
Profits in 12 months = $ 209,000
I won't bother to convert this to a pre-tax equivalent, the monthly income is $32,000 and the annual income if I just held water on the trade sizes is $383,000.
Nice. While time will tell how accurate this is I still feel that I am fudging against my future performance as there is an option to trade stocks once I have a certain account size that allows for large enough stock trades to produce similar profits. The best thing about those is that I can use tight stops initially and let trades go with VTSOs to capture greater profits and see lesser losses which should increase my profitability overall.
If I want to go really hog wild and put no cap on trade sizes, just use 10 contract exit orders I could, in theory...as I don't think this would work unless I switched to stocks and I have no real comparison numbers yet... another post.
Hog Wild profits in 12 months = $ 919,900
Trade size is 239 contract per trade, right, trade stocks instead. Annualized income $3,818,000.
OK... so somewhere in there will be where I fall... between about $50,000 and $919,000 in 12 months. How's that for a forecast range?
Jeff.
Friday, May 28, 2010
Observing The Targets
I keep changing how I want to calculate my targets and therefore count when I surpass them. While I have tried to be conservative by using overall averages and not counting anything prematurely I do need to keep in mind my overall goal and use my targets accordingly.
My overall goal is to attain a consistent cashflow so using a total daily average is counter productive. Last month's daily average is good for last month but has little to no bearing on this month for more reasons than just my targets. I also expect to be increasing trade sizes at least once per month for a while so counting the averages based on the different trade sized trades might be good, but overly complicated. Once I switch to the next size up I could just restart my average counter.
Therefore, instead of just using an overall average I will be counting the current month's average and I may look at setting up some way of using a 20 day moving average to more closely reflect the true average. Starting over on a monthly basis is troublesome as it can look really good or really bad right off the start due ot the first day or so results. If I can come up with a relatively easy way to move the average I will do that.
After today with the current trades closed and this being the last trading day of the month my current month's average is $210.20 for daytrading only. That translates into $3993.
Last month was $119.30 and $2147 in profits.
That is a 76.2% increase in daily average and an 85.9% increase in total profits.
I only started 4 contract trades this week so there are very few trades based on this yet so the increase is due to just better trades overall. We had one great day too, May 17th, which cleared the $1900 in one day. When next month's averages and profits are larger again they will be due to increased trade sizes... and perhaps better trades again or maybe even more trades... but that remains to be seen.
I just noticed that today's numbers bump me well into the $21,000 mark overall.
Jeff.
My overall goal is to attain a consistent cashflow so using a total daily average is counter productive. Last month's daily average is good for last month but has little to no bearing on this month for more reasons than just my targets. I also expect to be increasing trade sizes at least once per month for a while so counting the averages based on the different trade sized trades might be good, but overly complicated. Once I switch to the next size up I could just restart my average counter.
Therefore, instead of just using an overall average I will be counting the current month's average and I may look at setting up some way of using a 20 day moving average to more closely reflect the true average. Starting over on a monthly basis is troublesome as it can look really good or really bad right off the start due ot the first day or so results. If I can come up with a relatively easy way to move the average I will do that.
After today with the current trades closed and this being the last trading day of the month my current month's average is $210.20 for daytrading only. That translates into $3993.
Last month was $119.30 and $2147 in profits.
That is a 76.2% increase in daily average and an 85.9% increase in total profits.
I only started 4 contract trades this week so there are very few trades based on this yet so the increase is due to just better trades overall. We had one great day too, May 17th, which cleared the $1900 in one day. When next month's averages and profits are larger again they will be due to increased trade sizes... and perhaps better trades again or maybe even more trades... but that remains to be seen.
I just noticed that today's numbers bump me well into the $21,000 mark overall.
Jeff.
Tuesday, May 25, 2010
Cashflow target
I keep waffling about when it comes to deciding on how to calculate my daily averages so I decided to make it an average cashflow based on the individual averages of the three systems I am using now.
Daytrading is straight profits divided by trading days = $164.67
Momentum options profits divided by trading days there = $302.34
This way my current cashflow is actually $467, not over $500 like I first suggested. This is a truer statement reflecting the cash per day that I am currently enjoying overall rather than some sort of average of the whole. It doesn't work out to based on total profits over the total timeframe that I have been trading.
Jeff.
Daytrading is straight profits divided by trading days = $164.67
Momentum options profits divided by trading days there = $302.34
This way my current cashflow is actually $467, not over $500 like I first suggested. This is a truer statement reflecting the cash per day that I am currently enjoying overall rather than some sort of average of the whole. It doesn't work out to based on total profits over the total timeframe that I have been trading.
Jeff.
Another milestone
Today I cleared the $20,000 mark overall as it was almost a $1,000 day in just the daytrading.
I find that the day trading is more an overnight thing more and more as we open positions specifically to hold for a day or two... or more. We closed a losing trade today as it was not really going anywhere, down about 15% so it was a lot better than holding it until expiry, which happens with a handful.
This is the first day using 4 contract trades. John is starting to cater to the group's requests more now. Getting a little more heavy handed with people who are not learning and are taking up more then their share of bandwith, increasing the subscription rate to reduce the numbers a bit and giving some guidance about relative sizing (go big, medium or small on the trades).
The last item is good as I consider 3 contracts pretty much the minimum so this lets me run 4 as standard size, 3 for the small and maybe bump to five for larger trades. When I get to 5 and 6 contracts the smaller will still be 3 but the larger may be 7 or 8.
All in all today was mostly uneventful, as if I can remain blase about neatly surpassing the next milestone. Time to set a new batch so I have more to aim for, although I find that I get a little lazy while thinking about the actual profit number. I need to remain focused on cashflow goals and money at risk targets to stay on the ball. Time to setup a couple of new spreadsheets to let me track monthly profits from the momentum options. I won't worry about the longer term stuff until later.
As the month draws to a close my daily overall average is over $510 (depending on how I figure the number of days overall), my daytrading average is up to $215.
Jeff.
I find that the day trading is more an overnight thing more and more as we open positions specifically to hold for a day or two... or more. We closed a losing trade today as it was not really going anywhere, down about 15% so it was a lot better than holding it until expiry, which happens with a handful.
This is the first day using 4 contract trades. John is starting to cater to the group's requests more now. Getting a little more heavy handed with people who are not learning and are taking up more then their share of bandwith, increasing the subscription rate to reduce the numbers a bit and giving some guidance about relative sizing (go big, medium or small on the trades).
The last item is good as I consider 3 contracts pretty much the minimum so this lets me run 4 as standard size, 3 for the small and maybe bump to five for larger trades. When I get to 5 and 6 contracts the smaller will still be 3 but the larger may be 7 or 8.
All in all today was mostly uneventful, as if I can remain blase about neatly surpassing the next milestone. Time to set a new batch so I have more to aim for, although I find that I get a little lazy while thinking about the actual profit number. I need to remain focused on cashflow goals and money at risk targets to stay on the ball. Time to setup a couple of new spreadsheets to let me track monthly profits from the momentum options. I won't worry about the longer term stuff until later.
As the month draws to a close my daily overall average is over $510 (depending on how I figure the number of days overall), my daytrading average is up to $215.
Jeff.
Monday, May 24, 2010
Position sizing...nay sayers
In reverse order:
I had an online acquaintance inquire about my trading and I ended up sending links to the three services that I am currently used, two of which are responsible for the trade setups that I used to make my current profits and one is new. After some online research they decided that I was in the minority of those who trusted and used this provider and actually made money. All I can say is that the ones who cannot make money using these services need to revisit their ability to pay attention to instructions and be able to execute trades quickly while sticking to some one else's plan. I have always said that when trading someone else's plan you would have to be willing to work the plan as it is laid out 100%.
Nuff said.
I decided to check out the profit potential for both of the services that I am using after having heard that one individual has cleared $100,000 since starting in March. Seeing as I wrote March off as a learning month (due to some of my erroneous trade decisions I about broke even) I just used April May to date for the day trading service but used all of the option momentum trades since inception, Mid March, about 42 trades that I was able to make over 47 days.
Using 10 contracts for every single trade (only because there was a period that 10 was the recommended max due to liquidity issues).
Day trading would have been near $23,500 and would have needed the $25,000 to manage this off the start. Now, with the profits I would not have had to keep that full amount in play but it is still near to doubling my money in less than two months.
The momentum trading would be at $57,480 and would have required about the same start up $25k. The final profit figure has me not only doubling but more than tripling my money by a good margin (2.3 times or 230% profit) in barely more than two months.
Total profit of $81,207 based on a $50,000 account is a 162% increase overall.
So, seeing as I am not really about the ROI I would look at the cash flow and it doesn't take much math to realize that $80,000 in roughly two months could look after a lot of things and still have lots of room to grow the trading account and start a nice investment account on the side.
Daily return for just the momentum account = $1723
Daily return for the day trading account = $734
Oh, this assumes that I keep the 10 contract position sizing throughout the period. I would expect that I would be moving the contract sizes up at about half the rate of account size increase to reduce the relative risk of the trades while still growing the account base and allowing to skim the profits as if using them for an income, which would be an ultimate target anyway.
Either return as a stand alone figure meets my daily minimums and then some.
Maybe not 'nuff said until the numbers are up like that.
Jeff.
I had an online acquaintance inquire about my trading and I ended up sending links to the three services that I am currently used, two of which are responsible for the trade setups that I used to make my current profits and one is new. After some online research they decided that I was in the minority of those who trusted and used this provider and actually made money. All I can say is that the ones who cannot make money using these services need to revisit their ability to pay attention to instructions and be able to execute trades quickly while sticking to some one else's plan. I have always said that when trading someone else's plan you would have to be willing to work the plan as it is laid out 100%.
Nuff said.
I decided to check out the profit potential for both of the services that I am using after having heard that one individual has cleared $100,000 since starting in March. Seeing as I wrote March off as a learning month (due to some of my erroneous trade decisions I about broke even) I just used April May to date for the day trading service but used all of the option momentum trades since inception, Mid March, about 42 trades that I was able to make over 47 days.
Using 10 contracts for every single trade (only because there was a period that 10 was the recommended max due to liquidity issues).
Day trading would have been near $23,500 and would have needed the $25,000 to manage this off the start. Now, with the profits I would not have had to keep that full amount in play but it is still near to doubling my money in less than two months.
The momentum trading would be at $57,480 and would have required about the same start up $25k. The final profit figure has me not only doubling but more than tripling my money by a good margin (2.3 times or 230% profit) in barely more than two months.
Total profit of $81,207 based on a $50,000 account is a 162% increase overall.
So, seeing as I am not really about the ROI I would look at the cash flow and it doesn't take much math to realize that $80,000 in roughly two months could look after a lot of things and still have lots of room to grow the trading account and start a nice investment account on the side.
Daily return for just the momentum account = $1723
Daily return for the day trading account = $734
Oh, this assumes that I keep the 10 contract position sizing throughout the period. I would expect that I would be moving the contract sizes up at about half the rate of account size increase to reduce the relative risk of the trades while still growing the account base and allowing to skim the profits as if using them for an income, which would be an ultimate target anyway.
Either return as a stand alone figure meets my daily minimums and then some.
Maybe not 'nuff said until the numbers are up like that.
Jeff.
Friday, May 21, 2010
11 Orders, 10 filled
Not bad. I selected my entry targets, some lower than recommended entries some at. All but one filled lower than target and, overall, I got 5.16% better pricing than my limits.
Almost an hour in and 8 of 10 are in the green, always nice to see that I bought the bottom...at least for this morning so I will see what happens longer term. I would have liked to have gotten in yesterday in a few of them as the prices were still better and the one that I did not get today I would have got yesterday. I did not have time to go through everything and be comfortable with the whole works anyway. No loss.
Some are actually up nicely already. At the time I am writing this I am up 0.98% for this plan based on paper profits net commission costs vs the traded capital. I know that this is a long term play so being up one hour after getting in is really nothing at all... just nice rather than seeing them head to the red as these sort of trades often do.
Jeff.
Almost an hour in and 8 of 10 are in the green, always nice to see that I bought the bottom...at least for this morning so I will see what happens longer term. I would have liked to have gotten in yesterday in a few of them as the prices were still better and the one that I did not get today I would have got yesterday. I did not have time to go through everything and be comfortable with the whole works anyway. No loss.
Some are actually up nicely already. At the time I am writing this I am up 0.98% for this plan based on paper profits net commission costs vs the traded capital. I know that this is a long term play so being up one hour after getting in is really nothing at all... just nice rather than seeing them head to the red as these sort of trades often do.
Jeff.
Thursday, May 20, 2010
New service to test, started yesterday.
I love playing with the services out there and I decided to start playing with another. It's all about the timing this time though.
The new one is a longer term stock trading setup run by the same group as the daytrading and momentum option trading systems... "systems" is not really a proper term to use though as this is not software deciding anything. I did look at a software system yesterday that may be a decent system but I will wait until August to try that out.
Part of my initiative to try yet another system is my desire to diversify my portfolio. I don't overly like the idea of relying on one setup as it may not always work as well as it is now. I figure one for each timeframe that is working is a good start. I will branch out on my own again once these are working well and I have the strategy and my implementation down pat... and when I have some more cash to play with.
So, I have been considering this new stock setup as there are a ton of tools that go with the subscription along with the callouts. These tools may be very useful in my own independent trading, we'll see. Meanwhile, seeing as the market is heading down for a bit it has been taking gold and precious metal stocks with it. This new service is mainly in these sort of stocks right now, which makes perfect sense as this is the sector that is still taking off.
With the pullback I figured that there would be an opportunity soon to be able to get into the picks at decent prices, or even lower than the initial entry targets. I was so right. In fact there was a video update today saying just that....Buy, Buy, Buy. If you were already in, buy some more to average down (which isn't something I would normally suggest, but this is a sector call and John has been right about a lot of stuff).
I decided to set $10,000 aside for this trial. Trades around the $500 area only which leaves some cash for additional trade setups or to add to the existing ones if needed. I will not use any margin for this as the trades range from $1.20 to $7 I equal weighted everything to the nearest 100 shares, largest trade is 400 shares. 11 trades in all.
The nice thing about these is that I can set and forget them. There are exit targets which I can just set GTC orders for and I can also bracket a stop as well... not that stops are used with the service but there are some terribly obvious support levels that, if broken, will be the stepping off point for a steep drop... I would place my stops below these far enough that I won't get a "touch and go" trigger.
Time will tell on this one as the timeline looks like up to 200 days... sometimes as short as a week or two though.
Jeff.
The new one is a longer term stock trading setup run by the same group as the daytrading and momentum option trading systems... "systems" is not really a proper term to use though as this is not software deciding anything. I did look at a software system yesterday that may be a decent system but I will wait until August to try that out.
Part of my initiative to try yet another system is my desire to diversify my portfolio. I don't overly like the idea of relying on one setup as it may not always work as well as it is now. I figure one for each timeframe that is working is a good start. I will branch out on my own again once these are working well and I have the strategy and my implementation down pat... and when I have some more cash to play with.
So, I have been considering this new stock setup as there are a ton of tools that go with the subscription along with the callouts. These tools may be very useful in my own independent trading, we'll see. Meanwhile, seeing as the market is heading down for a bit it has been taking gold and precious metal stocks with it. This new service is mainly in these sort of stocks right now, which makes perfect sense as this is the sector that is still taking off.
With the pullback I figured that there would be an opportunity soon to be able to get into the picks at decent prices, or even lower than the initial entry targets. I was so right. In fact there was a video update today saying just that....Buy, Buy, Buy. If you were already in, buy some more to average down (which isn't something I would normally suggest, but this is a sector call and John has been right about a lot of stuff).
I decided to set $10,000 aside for this trial. Trades around the $500 area only which leaves some cash for additional trade setups or to add to the existing ones if needed. I will not use any margin for this as the trades range from $1.20 to $7 I equal weighted everything to the nearest 100 shares, largest trade is 400 shares. 11 trades in all.
The nice thing about these is that I can set and forget them. There are exit targets which I can just set GTC orders for and I can also bracket a stop as well... not that stops are used with the service but there are some terribly obvious support levels that, if broken, will be the stepping off point for a steep drop... I would place my stops below these far enough that I won't get a "touch and go" trigger.
Time will tell on this one as the timeline looks like up to 200 days... sometimes as short as a week or two though.
Jeff.
Milestone after Milestone....I'll have to stop counting
Well, this week has been an eventful week on the trading front thus far and I will be glad of the break tomorrow...at least a break from daytrading.
I passed the $15,000 mark in profits, as posted.
I passed the double my money point based on capital at risk, I may have posted.
I am now in the $500 per day club at $512.44 average per day.
Today, while not quite passed, I am within $15 of the $20,000 mark.
Now, the last trade closed at the close of the market so I ended up with a partial fill as only one of my two contracts closed or I would have nicely surpassed the $20k mark.
All of this is neither here nor there as these milestones are fairly close together. Initially these were going to be hit over the course of weeks, not days. So now I have to set some new ones and see what happens.
I think that next week, seeing as the daytrading account will open flat (no open trades, all cash) I will start off with 4 contract trades. The cash balance will be $11,741. I have two losing trades to book tomorrow, both expire worthless so a 100% loss but the total loss is $391 and does not affect my cash balance. I may go ahead and bump up the other account to 4 contract trades as well as the cash balance is almost $25,000. It turns out that I don't have to add cash to let me sell naked options should I choose to do so now. 4 contracts with 15 trades (about the max I think) would still leave me with $10,000 ($30,000 margin) in order to start my next trading plan.
Oh, that balance does not count the $3000 in open trades or the $1500 in open profits.
All in all I am in a better position at this point than I thought that I might be.
Jeff.
I passed the $15,000 mark in profits, as posted.
I passed the double my money point based on capital at risk, I may have posted.
I am now in the $500 per day club at $512.44 average per day.
Today, while not quite passed, I am within $15 of the $20,000 mark.
Now, the last trade closed at the close of the market so I ended up with a partial fill as only one of my two contracts closed or I would have nicely surpassed the $20k mark.
All of this is neither here nor there as these milestones are fairly close together. Initially these were going to be hit over the course of weeks, not days. So now I have to set some new ones and see what happens.
I think that next week, seeing as the daytrading account will open flat (no open trades, all cash) I will start off with 4 contract trades. The cash balance will be $11,741. I have two losing trades to book tomorrow, both expire worthless so a 100% loss but the total loss is $391 and does not affect my cash balance. I may go ahead and bump up the other account to 4 contract trades as well as the cash balance is almost $25,000. It turns out that I don't have to add cash to let me sell naked options should I choose to do so now. 4 contracts with 15 trades (about the max I think) would still leave me with $10,000 ($30,000 margin) in order to start my next trading plan.
Oh, that balance does not count the $3000 in open trades or the $1500 in open profits.
All in all I am in a better position at this point than I thought that I might be.
Jeff.
Wednesday, May 19, 2010
Mid day update...listening to a webinar.
I logged into a webinar for a trade software that sounds good...and I have the chance to win a copy if I am here.
Of course there were some profits to take off the table while the webinar was opening... multi tasking.
I closed three trades for a hair under Monday's profits... and that was greater than 20%. I'll update my performance page shortly...and I may have to update it again later but I wanted to log the numbers right now but I basically just doubled my money that I had at risk, that's a nice $17,000.
I still have a ton of paper profits on the account yet to close, but I don't count these until closed.
Jeff.
Of course there were some profits to take off the table while the webinar was opening... multi tasking.
I closed three trades for a hair under Monday's profits... and that was greater than 20%. I'll update my performance page shortly...and I may have to update it again later but I wanted to log the numbers right now but I basically just doubled my money that I had at risk, that's a nice $17,000.
I still have a ton of paper profits on the account yet to close, but I don't count these until closed.
Jeff.
Tuesday, May 18, 2010
Momentum trading notes
I have setup spreadsheets to be able to plug in different values for number of contracts per trade by month in the TFSA so I decided to try something similar with the momentum trading, not so easy at first glance. So I took the total value of the profits per contract (which I already had) and totaled them up. Easy enough to just multiply by the number of contracts aimed for and multiply that by 100. It does not accommodate commissions without some tinkering to setup a scale for those as well so it is a little high.
Actual profits = $9448 Average trade size is 2.8 contracts profit per contract overall is $39.06
2.8 contract gross profit projection = $10,936
My real commission cost was $1073 so my performance versus the ideal 2.8 contract trade is not far off.
3 contracts = 11,718
4 contracts = 15,624
5 contracts = 19,530
I expect that the commissions would scale up slightly as they are only $1 per contract after the initial $9.95 per trade... so maybe allow for $1,200 overall.
While this is not per month, it is since the plan started, I cannot break it down based on that but with 27 completed trades it gives a good idea.
It is worth noting that of those 27 trades, three lost money. Not a bad win rate.
Jeff.
Actual profits = $9448 Average trade size is 2.8 contracts profit per contract overall is $39.06
2.8 contract gross profit projection = $10,936
My real commission cost was $1073 so my performance versus the ideal 2.8 contract trade is not far off.
3 contracts = 11,718
4 contracts = 15,624
5 contracts = 19,530
I expect that the commissions would scale up slightly as they are only $1 per contract after the initial $9.95 per trade... so maybe allow for $1,200 overall.
While this is not per month, it is since the plan started, I cannot break it down based on that but with 27 completed trades it gives a good idea.
It is worth noting that of those 27 trades, three lost money. Not a bad win rate.
Jeff.
Total net growth... plus some it turned out.
Considering that I started the day trading plan in April, and most of any other profits started being realized at about the same time I did some quick head math and checked the net profit balance sheet.
To date I am up a hair over $14,000 in about a month and a half.
If I take about how much capital I have had in play in the momentum plan, and the startup of the TFSA daytrading plan it amounts to maybe $17,000. That puts me close to doubling my trading capital in that timeframe... 82.3% return.
I can't think of many other investment opportunities that can even claim that sort of performance let alone deliver it. While I don't expect to produce the same performance in future, I plan to increase the return, the annualized return for the current numbers is ......
As I was entering this post I closed a momentum trade for a 111% return.
OK, so that puts me at $15,121 or 88.9%. Annualized that is ...well, let's just say thousands of percent based on a simple return. Base it on an increasing trade size and the numbers just get plain bigger as I will be bumping up my momentum trade sizes along with the daytrading sizes ideally every month or less.
Jeff.
To date I am up a hair over $14,000 in about a month and a half.
If I take about how much capital I have had in play in the momentum plan, and the startup of the TFSA daytrading plan it amounts to maybe $17,000. That puts me close to doubling my trading capital in that timeframe... 82.3% return.
I can't think of many other investment opportunities that can even claim that sort of performance let alone deliver it. While I don't expect to produce the same performance in future, I plan to increase the return, the annualized return for the current numbers is ......
As I was entering this post I closed a momentum trade for a 111% return.
OK, so that puts me at $15,121 or 88.9%. Annualized that is ...well, let's just say thousands of percent based on a simple return. Base it on an increasing trade size and the numbers just get plain bigger as I will be bumping up my momentum trade sizes along with the daytrading sizes ideally every month or less.
Jeff.
After a slow week....
After last week being such a slow week with all of one trade closed this week is turning out to be a little more like it.
Yesterday 9 trades were closed for a nice 20% gain in my TFSA account which bumps me well into the $10,000 range. Nice.
I am very near the point of increasing my trade size to 4 contracts... I was going to wait until next month but I don't think that I will. It's all based on dollars, not time and I expect to be at the right point next week.
The last 13 trades have been an average of $1.97 so the same 4 contracts would only be $788. Given my current account size of $9992 (I am not counting a couple of setups that may be losers in that mix at all...and I closed a mistake trade this morning for -$60) I could setup 10 trades easily. I like to have room for 15 but that is more to allow for possible losers so I have a bit of a buffer. Sometimes we carry options through to expiry and they expire worthless (100% loss) so I need to accommodate both the loss itself and the having to carry the option through.
Next week I will tally where I am and decide the trade sizes but as long as I am up from today I will be going to 4 contracts. I suppose if it is a great week I could take it to 5 but that may be a bit premature.
Jeff.
Yesterday 9 trades were closed for a nice 20% gain in my TFSA account which bumps me well into the $10,000 range. Nice.
I am very near the point of increasing my trade size to 4 contracts... I was going to wait until next month but I don't think that I will. It's all based on dollars, not time and I expect to be at the right point next week.
The last 13 trades have been an average of $1.97 so the same 4 contracts would only be $788. Given my current account size of $9992 (I am not counting a couple of setups that may be losers in that mix at all...and I closed a mistake trade this morning for -$60) I could setup 10 trades easily. I like to have room for 15 but that is more to allow for possible losers so I have a bit of a buffer. Sometimes we carry options through to expiry and they expire worthless (100% loss) so I need to accommodate both the loss itself and the having to carry the option through.
Next week I will tally where I am and decide the trade sizes but as long as I am up from today I will be going to 4 contracts. I suppose if it is a great week I could take it to 5 but that may be a bit premature.
Jeff.
Thursday, May 13, 2010
OYE! Locked and Loaded!
I am currently in 25 option trades. All but 4 are puts. Of those 4 call trades one is looking promising (even though it had zeroed out last week) and the other three are not. Of all the profitable trades thus far axing three is no great loss.
Now, I feel heavily "bearish" and certainly will profit nicely when the market turns south. Meanwhile the wait is a little on the onerous side. Even the day trades are all overnighters. We did not add any day trades today and there are 9 of them. (two are double sized... so sort of counts as 11 I suppose).
Some of the securities are options on SPY, QQQQ, IWM with the rest being stock options. There are enough that I don't even know the actual names of the underlying companies nor even the sectors they are involved in. I liked the idea of not knowing these sort of details and I do consider that it may not be important, especially given the trading in process lately, but I sometimes like to have more of a handle on the stocks. I am getting familiar with a good number of the "regulars" that make it onto the trade list each day now. X, BUCY, AIG, FAS, AZO, CTRP, FLS, CLF, ESRX, PCP, CREE, GS just to name a few off the top of my head. Next month I will compile a list of all the stocks we have actually traded and perhaps even the number of trades and profit/losses for each. A little number crunching. On it's own this list really means nothing though, as each day produces new trades and drops the old ones depending upon the setups in the market.
As I watch the major indices this morning they looked bullish off the start...which is good as that has usually indicated strength in the AM and weakness in the PM. This bullish surge also let me fill the last three outstanding orders that I have had in place for a few days now.
If I wanted to look for a pattern I would see the three legged surge into 1030h which has now broken down and there are two surges heading down. If the low of the day is broken down I expect to see some further extension of the down move into a larger move over the afternoon.
SPY is tinkering with the mid $116's, a line that I placed on the charts based on September 2008 levels of broken support. Using some moving averages and discounting some of Thursday's downspike the 200 DMA was tested and held on Friday. The short and medium MAs have crossed into bearish territory and the SPY seems to be struggling between the old resistance and the 200ma levels. I expect a break down as there is not much large upward pressure from the various sectors.
There I go, I was just about to get in to a sector by sector bullish percent index study. I will play with that again sometime but not right now.
As I type this things change...or progress at least. The Q's are just now testing the intraday low, SPY may be on it's third leg down and is near the low of day. Some of my puts are turning green as well...and it is just noon so the timing is about right too.
Jeff.
Now, I feel heavily "bearish" and certainly will profit nicely when the market turns south. Meanwhile the wait is a little on the onerous side. Even the day trades are all overnighters. We did not add any day trades today and there are 9 of them. (two are double sized... so sort of counts as 11 I suppose).
Some of the securities are options on SPY, QQQQ, IWM with the rest being stock options. There are enough that I don't even know the actual names of the underlying companies nor even the sectors they are involved in. I liked the idea of not knowing these sort of details and I do consider that it may not be important, especially given the trading in process lately, but I sometimes like to have more of a handle on the stocks. I am getting familiar with a good number of the "regulars" that make it onto the trade list each day now. X, BUCY, AIG, FAS, AZO, CTRP, FLS, CLF, ESRX, PCP, CREE, GS just to name a few off the top of my head. Next month I will compile a list of all the stocks we have actually traded and perhaps even the number of trades and profit/losses for each. A little number crunching. On it's own this list really means nothing though, as each day produces new trades and drops the old ones depending upon the setups in the market.
As I watch the major indices this morning they looked bullish off the start...which is good as that has usually indicated strength in the AM and weakness in the PM. This bullish surge also let me fill the last three outstanding orders that I have had in place for a few days now.
If I wanted to look for a pattern I would see the three legged surge into 1030h which has now broken down and there are two surges heading down. If the low of the day is broken down I expect to see some further extension of the down move into a larger move over the afternoon.
SPY is tinkering with the mid $116's, a line that I placed on the charts based on September 2008 levels of broken support. Using some moving averages and discounting some of Thursday's downspike the 200 DMA was tested and held on Friday. The short and medium MAs have crossed into bearish territory and the SPY seems to be struggling between the old resistance and the 200ma levels. I expect a break down as there is not much large upward pressure from the various sectors.
There I go, I was just about to get in to a sector by sector bullish percent index study. I will play with that again sometime but not right now.
As I type this things change...or progress at least. The Q's are just now testing the intraday low, SPY may be on it's third leg down and is near the low of day. Some of my puts are turning green as well...and it is just noon so the timing is about right too.
Jeff.
Tuesday, May 11, 2010
New puts and pattern recognition
In the momentum options last week was a great profit week as I sold all my puts for boat loads of cash. Many were well over 100% returns and a few under. As a result this week started out with few positions in play, which was nice. Yesterday I placed 10 orders for new puts in some stocks that saw a rally to test previous levels. I managed to get into 8 of 10 based on nickel or dime lenience on my orders.
Today even my gold company call came back and is sitting at over 50% gains at days' end... although it was over 100% earlier and I considered closing it... but chose to hold. Gold is cranking after all.
We also have some new puts in the day trading account, all of which are being held overnight. Two from yesterday and two from today. Yesterdays' I added to this morning as well so it is more like having 6 positions not just 4.
I am starting to notice (well, I noticed this right off but now it is more prevalent) that the day plays are setup based on the daily patterns of various shapes of breakouts. This puts me in mind of my old CTP trades that I was trying to get working quite a while back with a day trading twist.
Previously I was playing a wedge pattern where I would plan to buy the stock as it tested the bottom trend line, sell and short at the top as it tested the top and keep doing this as the wedge tightened or got narrower. The idea was that near the apex I would be long as the price tested the close bottom and, if it broke out, I would be in the position already for the move. The reverse would be true for the break down if that happened.
What we are doing different is that, while using the same breakout patterns, we are trading intraday (more or less) and using the back test AFTER the breakout has already occurred. The exception is that we may also play the test of the wedge limits assuming that the price is not going to breakout.
In the momentum trading it is similar with a longer view of the move. Day trading we will play the front month options, currently May with a bit of June, and in the longer term we use the next month or later, June or July. This provides higher volatility for day trading and quicker profits and longer time to fruition for the longer term momentum trades.
Now the patterns are all well and good but also knowing how to apply a lot of the background information to determine which stocks and which options to play is far more complicated than just looking at the charts.
If I had time I would do some of my own work... things are working out well enough now, and I am busy, that I think I will leave well enough alone and just do the trading. Over 60 trades this month so far...perhaps I don't need anymore.
Jeff.
Today even my gold company call came back and is sitting at over 50% gains at days' end... although it was over 100% earlier and I considered closing it... but chose to hold. Gold is cranking after all.
We also have some new puts in the day trading account, all of which are being held overnight. Two from yesterday and two from today. Yesterdays' I added to this morning as well so it is more like having 6 positions not just 4.
I am starting to notice (well, I noticed this right off but now it is more prevalent) that the day plays are setup based on the daily patterns of various shapes of breakouts. This puts me in mind of my old CTP trades that I was trying to get working quite a while back with a day trading twist.
Previously I was playing a wedge pattern where I would plan to buy the stock as it tested the bottom trend line, sell and short at the top as it tested the top and keep doing this as the wedge tightened or got narrower. The idea was that near the apex I would be long as the price tested the close bottom and, if it broke out, I would be in the position already for the move. The reverse would be true for the break down if that happened.
What we are doing different is that, while using the same breakout patterns, we are trading intraday (more or less) and using the back test AFTER the breakout has already occurred. The exception is that we may also play the test of the wedge limits assuming that the price is not going to breakout.
In the momentum trading it is similar with a longer view of the move. Day trading we will play the front month options, currently May with a bit of June, and in the longer term we use the next month or later, June or July. This provides higher volatility for day trading and quicker profits and longer time to fruition for the longer term momentum trades.
Now the patterns are all well and good but also knowing how to apply a lot of the background information to determine which stocks and which options to play is far more complicated than just looking at the charts.
If I had time I would do some of my own work... things are working out well enough now, and I am busy, that I think I will leave well enough alone and just do the trading. Over 60 trades this month so far...perhaps I don't need anymore.
Jeff.
Sunday, May 9, 2010
Trading sizing...beating a dead horse?
Position sizing seems to take up most of my thoughts about trading of late. Likely this is due to the potential profits related to larger position sizing, it is tempting to just bump them up across the board.
Seeing as I have three active plans going right now it makes the most sense to split the trading capital up to allow for each to had at least minimum workable trade sizes.
Day trading: This is fixed due to the TFSA account being funded to the current maximum allowed under the CRA rules. Due to loses from last year I was down over $3,000. Add the allowable contribution room for this year of $5,000 and I started out at $6,700... or so. I am now up to $9,500 so running three contract trades allows 12 concurrent trades based on my current $2.62 per contract average price so far. Most days I will not see that many trades but it allows for carrying some overnight and holding the next day. It also keeps losers to a smaller percentage of the account as I cannot add to this account until January.
I will bump up to 4 contracts once I hit the 15 concurrent trade level, near $12,000 account size. This allows 11 trades at 4 contracts...anything over ten is good.
Momentum options: I feel that at least 15 possible concurrent trades should be the minimum here. Given the average prices are $2.05 that should mean $615 trades. That is probably low as there were some trades that I missed that were higher priced... so I'll use the same $2.62 as in the day trading. Trade sizes are $786. 15 trades would use up about $12,000.
Stock trades: Seeing as I can use margin here I can triple the account size to determine my trading sizes. This is also the least profitable plan as it, so far, involves only trading long the stocks themselves. Prices vary greatly but I wanted to use 100 shares as a minimum position size. The most expensive stock so far has been in the $40 range. If I subtract the cash allowance for the momentum options trades ($12,000) that leaves about $10,000 cash for stocks, or $30,000 margin. Using the average price of all stock trades thus far ($17 approximately) I could place 17 x 100 share trades altogether. I figure that some of the less than $10 stocks could use 200 shares and some of the $30 plus stocks might be OK with 50 shares.
Using a 15% stop loss on these stock trades leaves me with an average per trade loss allowance of $255. Seeing as I move these stops with the prices as they rise (which worked in my favour last week) I can easily accommodate this even considering the margin applied.
Enough weekend ramblings for now.
I am looking forward to some more profitable trading this week and I plan on seeing 4 contract day trades into the following week. I think that I will leave the maximum at 5 once I get there only to manage possible losses over the long run. Get the account growing, keep the cashflow at a nice consistent level then consider when to move to 6 or more contracts afterwards.
Jeff.
Seeing as I have three active plans going right now it makes the most sense to split the trading capital up to allow for each to had at least minimum workable trade sizes.
Day trading: This is fixed due to the TFSA account being funded to the current maximum allowed under the CRA rules. Due to loses from last year I was down over $3,000. Add the allowable contribution room for this year of $5,000 and I started out at $6,700... or so. I am now up to $9,500 so running three contract trades allows 12 concurrent trades based on my current $2.62 per contract average price so far. Most days I will not see that many trades but it allows for carrying some overnight and holding the next day. It also keeps losers to a smaller percentage of the account as I cannot add to this account until January.
I will bump up to 4 contracts once I hit the 15 concurrent trade level, near $12,000 account size. This allows 11 trades at 4 contracts...anything over ten is good.
Momentum options: I feel that at least 15 possible concurrent trades should be the minimum here. Given the average prices are $2.05 that should mean $615 trades. That is probably low as there were some trades that I missed that were higher priced... so I'll use the same $2.62 as in the day trading. Trade sizes are $786. 15 trades would use up about $12,000.
Stock trades: Seeing as I can use margin here I can triple the account size to determine my trading sizes. This is also the least profitable plan as it, so far, involves only trading long the stocks themselves. Prices vary greatly but I wanted to use 100 shares as a minimum position size. The most expensive stock so far has been in the $40 range. If I subtract the cash allowance for the momentum options trades ($12,000) that leaves about $10,000 cash for stocks, or $30,000 margin. Using the average price of all stock trades thus far ($17 approximately) I could place 17 x 100 share trades altogether. I figure that some of the less than $10 stocks could use 200 shares and some of the $30 plus stocks might be OK with 50 shares.
Using a 15% stop loss on these stock trades leaves me with an average per trade loss allowance of $255. Seeing as I move these stops with the prices as they rise (which worked in my favour last week) I can easily accommodate this even considering the margin applied.
Enough weekend ramblings for now.
I am looking forward to some more profitable trading this week and I plan on seeing 4 contract day trades into the following week. I think that I will leave the maximum at 5 once I get there only to manage possible losses over the long run. Get the account growing, keep the cashflow at a nice consistent level then consider when to move to 6 or more contracts afterwards.
Jeff.
Saturday, May 8, 2010
Curiousity and the cat
Trading started out as a hobby and, even though I am taking past the hobby level, it is still really a hobby. Yes, I spend a few hours each day doing trading related stuff even if not directly trading. Yes, I am making more money than a hobby ought to... perhaps. Yes, I plan to be able to replace two incomes and only have to trade for a living.
I enjoy it and, therefore still consider it a hobby.
Having said that I often get asked "what's new?", or people are talking about their hobbies and that leads me into my hobby. Because I get to talk about gains, as that is what this is all about, people get curious and ask how to do it. Originally I thought that anyone could but I now know better... at least when it comes to day trading. The momentum and stock stiff anyone could do.
Anyway, I have stopped counting how often I've been asked if would trade $10,000 for them. I cite legal, accounting, possibility of loss or any number of valid reasons why I would not trade their money... as much as would secretly love to have a much larger account to trade.
I would be curious to have a nice $200k account base to see what I could do with it.
Jeff.
I enjoy it and, therefore still consider it a hobby.
Having said that I often get asked "what's new?", or people are talking about their hobbies and that leads me into my hobby. Because I get to talk about gains, as that is what this is all about, people get curious and ask how to do it. Originally I thought that anyone could but I now know better... at least when it comes to day trading. The momentum and stock stiff anyone could do.
Anyway, I have stopped counting how often I've been asked if would trade $10,000 for them. I cite legal, accounting, possibility of loss or any number of valid reasons why I would not trade their money... as much as would secretly love to have a much larger account to trade.
I would be curious to have a nice $200k account base to see what I could do with it.
Jeff.
What a Week!
Well, this past week was a roller coaster. I started with a zero day on Monday, just opening trades, continued with a good Tuesday, a down Wednesday... then Thursday hit.
Daytrading turned over $800 net, which was nice but the real kicker was all the momentum options trades that I closed as the market did it's thing. I closed about 20 positions at various points over the afternoon and saw well over $7,000 net profits. Based on the capital in play that is about a 70% ROI.
This month, one week in at least, I have set every trade at 3 contracts so, other than attempting to cherry pick trades, I have fully optimized my trading plan as I should have been doing all along. Plugging in 4 contracts shows about an increase of 50% in profits. That makes the move to 4 the largest gain in potential as I am getting past the effect of commissions. I posted a chart already indicating the increase, by percentage, for each single contract increase in overall trade size.
I could go right to 4 now but I would like to have one more week at three as I cannot run 10 trades at 4 yet... although one day will change that if is a profitable day.
On another note, Questrade has dropped the $5 daily fee for trading in US securities in a TFSA and RRSP account. That will bump my bottom line by $100 a month. That alone is a 1.5% per month increase in profits based on my original starting capital in the TFSA. Not a lot compared to the overall but every little bit does help.
Daytrading turned over $800 net, which was nice but the real kicker was all the momentum options trades that I closed as the market did it's thing. I closed about 20 positions at various points over the afternoon and saw well over $7,000 net profits. Based on the capital in play that is about a 70% ROI.
This month, one week in at least, I have set every trade at 3 contracts so, other than attempting to cherry pick trades, I have fully optimized my trading plan as I should have been doing all along. Plugging in 4 contracts shows about an increase of 50% in profits. That makes the move to 4 the largest gain in potential as I am getting past the effect of commissions. I posted a chart already indicating the increase, by percentage, for each single contract increase in overall trade size.
I could go right to 4 now but I would like to have one more week at three as I cannot run 10 trades at 4 yet... although one day will change that if is a profitable day.
On another note, Questrade has dropped the $5 daily fee for trading in US securities in a TFSA and RRSP account. That will bump my bottom line by $100 a month. That alone is a 1.5% per month increase in profits based on my original starting capital in the TFSA. Not a lot compared to the overall but every little bit does help.
Wednesday, May 5, 2010
Taking an erroneous loss.
ARRRGH!
One of the two last oversized positions ended up in a loss today as I closed it. The worst was that upon setting the exit order I used a limit order instead of market. Now this position has been held since mid April and has shown some nasty negative numbers until yesterday's drop in the market. Closing it this morning I should have seen about a 10 cent loss but instead, due to my error, I booked it at 65 cents down. The other was up 10 cents when I closed it.
Normally that would not concern me, and to be honest it really doesn't concern me now anyway, but it was a #390 drop. That still leaves me up for this month and has no bearing on last months numbers anyway as I treat a trade as fully executed on the day it is closed, no matter the open day. That is just plain easier than figuring the commissions out over multiple timeframes...especially if the trade was entered in stages, as this one was.
Due to some newbie shenanigans this morning I booked a scratch trade (commissions lost only) that should have been a decent gainer of at least 30 cents but John was trying to make a point with some new folks about market orders vs limit orders. So when everyone else was out I figured I better get out as well. I know he knew that the stock was going to jump but we will have other trades and I don't want to lament over a scratch.
My margin account is up quite nicely and I was hoping for some profit taking over there to pad my overall numbers...but that is the wrong reason to close a trade. So I am holding. Paper gains were as high as $4,500 this morning, back down to $2,500 and now inching back up to $3,600.
I'll post as I get some more profits locked in...or have to book another loss if needed.
One of the two last oversized positions ended up in a loss today as I closed it. The worst was that upon setting the exit order I used a limit order instead of market. Now this position has been held since mid April and has shown some nasty negative numbers until yesterday's drop in the market. Closing it this morning I should have seen about a 10 cent loss but instead, due to my error, I booked it at 65 cents down. The other was up 10 cents when I closed it.
Normally that would not concern me, and to be honest it really doesn't concern me now anyway, but it was a #390 drop. That still leaves me up for this month and has no bearing on last months numbers anyway as I treat a trade as fully executed on the day it is closed, no matter the open day. That is just plain easier than figuring the commissions out over multiple timeframes...especially if the trade was entered in stages, as this one was.
Due to some newbie shenanigans this morning I booked a scratch trade (commissions lost only) that should have been a decent gainer of at least 30 cents but John was trying to make a point with some new folks about market orders vs limit orders. So when everyone else was out I figured I better get out as well. I know he knew that the stock was going to jump but we will have other trades and I don't want to lament over a scratch.
My margin account is up quite nicely and I was hoping for some profit taking over there to pad my overall numbers...but that is the wrong reason to close a trade. So I am holding. Paper gains were as high as $4,500 this morning, back down to $2,500 and now inching back up to $3,600.
I'll post as I get some more profits locked in...or have to book another loss if needed.
Tuesday, May 4, 2010
Re-considering the TFSA overcontribution again
I decided, seeing as I have a 32% return for April and I aim for higher with the 3 contract plan in May, and with more trading days as well to work with that I will not bother trying the over contribution plan. It doesn't make any sense to raise any taxation red flags for the sake of a few months of optimum trade sizes. I'll get there soon enough.
Jeff.
Jeff.
Monday, May 3, 2010
Average option prices
It only took about five minutes to run all off April's trades to come up with an average option price.
$2.62.
Well, a little higher than my $2.00 guesstimate. Some of the trades were over $6 so I would feel comfortable running a minimum trade size for all trades below, say... $4. There were 14 above $4 out of 108 trades so about 10% may be one contract less.
Even at $2.62 per considering that I want to trade 5 contract minimums I would only have to add about $6,000 to my TFSA to meet my requirement. This puts me about three months ahead of schedule on my cashflow plan as well.
Considering the CRA fees against the added profit potential makes this a no brainer. I figure that I will have to come good for the taxation and penalty next spring... That is almost 12 full months of trading and I fully plan to withdraw the equivalent amount, $6K, to halt the accumulation of penalties quickly. In fact, based on April's trading that could be covered in the first month.
Tomorrow I will call my accountant to see if he has any insights for me though.
Jeff.
$2.62.
Well, a little higher than my $2.00 guesstimate. Some of the trades were over $6 so I would feel comfortable running a minimum trade size for all trades below, say... $4. There were 14 above $4 out of 108 trades so about 10% may be one contract less.
Even at $2.62 per considering that I want to trade 5 contract minimums I would only have to add about $6,000 to my TFSA to meet my requirement. This puts me about three months ahead of schedule on my cashflow plan as well.
Considering the CRA fees against the added profit potential makes this a no brainer. I figure that I will have to come good for the taxation and penalty next spring... That is almost 12 full months of trading and I fully plan to withdraw the equivalent amount, $6K, to halt the accumulation of penalties quickly. In fact, based on April's trading that could be covered in the first month.
Tomorrow I will call my accountant to see if he has any insights for me though.
Jeff.
Month End Stats and TFSA overcontribution.
I started my TFSA trading full tilt in April, early April anyway. Although there were a few days that were in the margin account in the first part of April I am only going to count the day trading in the TFSA, all of the momentum options trading and all of the medium term stock trading for statistical purposes. The reason being that my end goal is cash flow based on those three setups so I consider anything else prior to that, win or lose, testing and fine tuning...although I am still doing some of that yet.
Stats for those three plans are:
TFSA Daytrading:
Daily Average: $119.30
Total net profit: $2142.44
Momentum options trading:
Daily Average: $34.00
Total net Profit: $1156.15
Stock trading:
Daily Average: $9.72
Total net Profit: $563.77
The grand totals are:
Daily Average: $163.03
Total net Profit: $3174.39
I figure that if I can post those numbers based on my meager startup and yet to be fine tuned trading I will look forward to some nice profits going forward.
I still track my "potential" profits had I made every single daytrade in the TFSA using 1-10 contract sizing. At my current decided size of 3 contracts I would have seen $3114, about $1K more had I just same sized everything. At the current expected maximum size of 10 contracts I would have seen $14,399.
I haven't worked out my average option price recently to see roughly how much I would have to have for each contract size increment. Having enough to cover an average size may have me running out of cash on very busy days though. Biggest day yet was 10 trades, largest trades are in the $3 range... so that would take $9,000 is all trades were so large for 3 contracts... I figure that $2 is about the normal average though... $6,000 for 10 trades at 3 contracts.
I have some more cash to transfer to my trading and I am considering transferring it to the TFSA and absorbing the 1% monthly hit and taking the chance of getting taxed on profits based on the over contribution in order to get my sizing up to the more profitable level of 5 contract trades. In April that would have produced $6,338 and the fees would have been about $1150 or so producing a net of $5,188. That is better than the $2,147 I did squeak out.
I emailed Questrade and they advised me of what I already know and said to check with the CRA regarding what the final charge would be. All I wanted to know is whether Questrade would block the transfer... they apparently won't.
I'll see what happens.
Jeff.
Stats for those three plans are:
TFSA Daytrading:
Daily Average: $119.30
Total net profit: $2142.44
Momentum options trading:
Daily Average: $34.00
Total net Profit: $1156.15
Stock trading:
Daily Average: $9.72
Total net Profit: $563.77
The grand totals are:
Daily Average: $163.03
Total net Profit: $3174.39
I figure that if I can post those numbers based on my meager startup and yet to be fine tuned trading I will look forward to some nice profits going forward.
I still track my "potential" profits had I made every single daytrade in the TFSA using 1-10 contract sizing. At my current decided size of 3 contracts I would have seen $3114, about $1K more had I just same sized everything. At the current expected maximum size of 10 contracts I would have seen $14,399.
I haven't worked out my average option price recently to see roughly how much I would have to have for each contract size increment. Having enough to cover an average size may have me running out of cash on very busy days though. Biggest day yet was 10 trades, largest trades are in the $3 range... so that would take $9,000 is all trades were so large for 3 contracts... I figure that $2 is about the normal average though... $6,000 for 10 trades at 3 contracts.
I have some more cash to transfer to my trading and I am considering transferring it to the TFSA and absorbing the 1% monthly hit and taking the chance of getting taxed on profits based on the over contribution in order to get my sizing up to the more profitable level of 5 contract trades. In April that would have produced $6,338 and the fees would have been about $1150 or so producing a net of $5,188. That is better than the $2,147 I did squeak out.
I emailed Questrade and they advised me of what I already know and said to check with the CRA regarding what the final charge would be. All I wanted to know is whether Questrade would block the transfer... they apparently won't.
I'll see what happens.
Jeff.
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