I am finding that the day trading service and the momentum option service are overlapping substantially in their scope, if not the stocks that are being played. I have placed a number of trades only to exit them in a day or so. Yesterday I jumped into a stock and today it is up over 100%...nice tidy profit. I am also finding it a pain to track everything separately...although that will not change I will be tracking my overall stats as a combined total from now on. One service has been running for longer but it also has the least returns, $200 overall, so I will rolls that one in for the grand totals. This means that my "per trade" average is not going to be representative of my trades in any particular service. Seeing as I have a daily average target in mind I think that this better serves my overall plan...head games perhaps. If I see myself doing well I will push to do better.
Stats as a result are as follows:
Daily Average: $301.97 (initial target was $250)
Days in: 17
Total Returns: $5133.57
ROI: 20.15%
Today's take was in the neighbourhood of $600.
I feel good about the trading overall. I have a few positions that may take some losses but I will book those when they are ripe... either way. A loss is not a loss until it is closed, but neither is a profit. Until that time I will keep making trades for profits which mitigates the possible losses. For the record these are not expected to remain in the red, the stocks are just wallowing and need to start heading where it really looks like they are ultimately going to go... time is not on my side in this though as the options do have a best before date.
Jeff.
Questrade, My direct access discount broker.
Tuesday, March 30, 2010
Friday, March 26, 2010
Week three completed...almost
Well, week three comes to an end. I still have three trades open but made two separate day trades this morning in two of the currently open positions. Sort of cool to hold a core position to play off of it with a completely separate activity. The quick nickel vs the slow dime.
The morning netted $405. The week $1086 (largish loss and three trades not closed this week yet)
My wife is liking the trading now. Today I sent her shopping for a new leather coat...big sale on in Ottawa and I figured that I could cover that purchase as a "bonus" for hitting my overall $4,000 mark. Or I could count it as a +$250 per day average mark. Either way it is a good feeling to know that profits are in the books and I can transfer some of those nice gains to enjoy in a truly materialist manner.
There was a discussion about trade sizing for option trades as one individual was trading large volume, 50 contracts, when the expectation is 10 to 20 per trade for the value of option in play.
I had already come to the conclusion that a $2,000 option position was the best size for my account and produced the returns that I am looking for while still giving me smooth and quick order execution.
The scale then becomes option volume relative to the sizing and per contract cost. I round off, 0.5 goes to 1.
$1 x 20
$2 x 10
$3 x 7
$4 x 5
$5 x 4
$6 x 3
$7 x 3
$8 x 3
$9 x 2
$10 x 2
The daily target is still $500 per day based on those sizes so 3 - 5 trades are the expectation with trades in the $200 plus mark regularly. The moderator will work more trades in to increase returns if it is needed. I think the lowest weekly return was $500 for one individual. I cannot really see my weekly, even though I quoted a number a moment ago, as I track the trade in the week that the trade was opened rather than when it was closed. Perhaps I should change that next month as profits are only profits when the trade is closed. I expected to be closing all positions in the same day so that is how I set my spreadsheet up initially.
This is perfect for my smaller account as long as I trade options. Stocks are another matter as I need a much larger capital base to trade $100 stocks with any volume. Even a 100 share position is $10,000 in buying power.
Which leads me to my next part of my plan.
The TFSA.
If I transfer $8,000 (about the max as I lost some money last year in that account) I can manage up to 4 concurrent option trades at $2,000 (or 5 at $1500 or so) while keeping my margin account for stock trades. I plan on opening an account in my wife's name but I may just use it for the swing and momentum option trades as I may not be able to link her account with my platform to perform day trades.
Either way. My daily average right now is $251, just over my main target but shy of the group target. If I convert my daily target into a comparable tax free profit target it is $175. Switching to the TFSA should not stymie my profits in any way, except maybe due to the 6, 7 or 8th trades having to be in the margin account perhaps. This puts me well ahead on my initial goal.
Doing the math on $250 dollar tax free days...not even counting compounding or increasing my goal to match the group goal and trading only 40 weeks of the year ... puts the take home at $50,000 annually. Ramp it up to $500 (which I think is going to be low overall) and that puts a cool $100,000 in my pocket.
Take operating costs out of that, then add in profits from the other services that Ia m using and I expect that the number will still be higher yet.
These are not numbers that I am making up in some sort of forecasting model making any vague assumptions. These are hard goals set as a group that we are, mostly, currently achieving.
Let's play imagination for a moment.
Say I want to have the option of working or not, which this can easily provide. I run the trading through the TFSA for tax free and tax neutral profits (they do not affect any other taxation, even CPP). This provides the beef of my income. Then I put a good chunk of my other taxable income into an RRSP and get the tax money back from that to invest as well. In a year or so I stop collecting a regular taxable income and start drawing directly from my RRSP at substantially reduced, likely even minimum taxation...I have effectively given myself a largish bonus in year two of my plan while reducing my current taxation to near zero levels.
I have not thought this one through completely nor have I done any math on it but it sounds like a very good plan to me.
So...off to do some other "real" work for the rest of the day.
Jeff.
The morning netted $405. The week $1086 (largish loss and three trades not closed this week yet)
My wife is liking the trading now. Today I sent her shopping for a new leather coat...big sale on in Ottawa and I figured that I could cover that purchase as a "bonus" for hitting my overall $4,000 mark. Or I could count it as a +$250 per day average mark. Either way it is a good feeling to know that profits are in the books and I can transfer some of those nice gains to enjoy in a truly materialist manner.
There was a discussion about trade sizing for option trades as one individual was trading large volume, 50 contracts, when the expectation is 10 to 20 per trade for the value of option in play.
I had already come to the conclusion that a $2,000 option position was the best size for my account and produced the returns that I am looking for while still giving me smooth and quick order execution.
The scale then becomes option volume relative to the sizing and per contract cost. I round off, 0.5 goes to 1.
$1 x 20
$2 x 10
$3 x 7
$4 x 5
$5 x 4
$6 x 3
$7 x 3
$8 x 3
$9 x 2
$10 x 2
The daily target is still $500 per day based on those sizes so 3 - 5 trades are the expectation with trades in the $200 plus mark regularly. The moderator will work more trades in to increase returns if it is needed. I think the lowest weekly return was $500 for one individual. I cannot really see my weekly, even though I quoted a number a moment ago, as I track the trade in the week that the trade was opened rather than when it was closed. Perhaps I should change that next month as profits are only profits when the trade is closed. I expected to be closing all positions in the same day so that is how I set my spreadsheet up initially.
This is perfect for my smaller account as long as I trade options. Stocks are another matter as I need a much larger capital base to trade $100 stocks with any volume. Even a 100 share position is $10,000 in buying power.
Which leads me to my next part of my plan.
The TFSA.
If I transfer $8,000 (about the max as I lost some money last year in that account) I can manage up to 4 concurrent option trades at $2,000 (or 5 at $1500 or so) while keeping my margin account for stock trades. I plan on opening an account in my wife's name but I may just use it for the swing and momentum option trades as I may not be able to link her account with my platform to perform day trades.
Either way. My daily average right now is $251, just over my main target but shy of the group target. If I convert my daily target into a comparable tax free profit target it is $175. Switching to the TFSA should not stymie my profits in any way, except maybe due to the 6, 7 or 8th trades having to be in the margin account perhaps. This puts me well ahead on my initial goal.
Doing the math on $250 dollar tax free days...not even counting compounding or increasing my goal to match the group goal and trading only 40 weeks of the year ... puts the take home at $50,000 annually. Ramp it up to $500 (which I think is going to be low overall) and that puts a cool $100,000 in my pocket.
Take operating costs out of that, then add in profits from the other services that Ia m using and I expect that the number will still be higher yet.
These are not numbers that I am making up in some sort of forecasting model making any vague assumptions. These are hard goals set as a group that we are, mostly, currently achieving.
Let's play imagination for a moment.
Say I want to have the option of working or not, which this can easily provide. I run the trading through the TFSA for tax free and tax neutral profits (they do not affect any other taxation, even CPP). This provides the beef of my income. Then I put a good chunk of my other taxable income into an RRSP and get the tax money back from that to invest as well. In a year or so I stop collecting a regular taxable income and start drawing directly from my RRSP at substantially reduced, likely even minimum taxation...I have effectively given myself a largish bonus in year two of my plan while reducing my current taxation to near zero levels.
I have not thought this one through completely nor have I done any math on it but it sounds like a very good plan to me.
So...off to do some other "real" work for the rest of the day.
Jeff.
Thursday, March 25, 2010
Justifying the personal cheat
I am entering this entry from my iPod, sort of on experiment.
The personal cheat, to me, refers to me no longer doing my own work when it comes to researching, chart analysis and whatnot. My original goal was to do this mostly on my own.
So, am I cheating on myself?
Of the past two and one half years I have tried quite a number of this stock related, done a ton of reading, trials and trades. I mentioned to my wife tonight that I feel odd having absolutely nothing to do with trading. All I have to do is to watch for a few emails, log into the trading room for a couple of hours and execute a handful of trades each day.
This is so easy that it feels like cheating.
This is so easy that it must be too good to be true.
This is so easy and I will keep doing this as long as it keeps working.
I worked out what the services are costing on a monthly basis, including Optioneer data and my esignal charting that I have almost stopped using. Approximately $830. $500 of that is daytrading room fees.
GASP!!!
While that sounds rather high I have also clocked in about that in commissions in March alone. It is true that it takes money to make money. All of this is going to be covered through trading profits where in thx past I have just gone out of pocket considering it all as hobby expenses... although this will be the highest fee month yet.
Tomorrow I look forward to cheating the market makers out of more of their money.
Jeff.
Ultimately I am finding that these are going to be worth it in the end.
The personal cheat, to me, refers to me no longer doing my own work when it comes to researching, chart analysis and whatnot. My original goal was to do this mostly on my own.
So, am I cheating on myself?
Of the past two and one half years I have tried quite a number of this stock related, done a ton of reading, trials and trades. I mentioned to my wife tonight that I feel odd having absolutely nothing to do with trading. All I have to do is to watch for a few emails, log into the trading room for a couple of hours and execute a handful of trades each day.
This is so easy that it feels like cheating.
This is so easy that it must be too good to be true.
This is so easy and I will keep doing this as long as it keeps working.
I worked out what the services are costing on a monthly basis, including Optioneer data and my esignal charting that I have almost stopped using. Approximately $830. $500 of that is daytrading room fees.
GASP!!!
While that sounds rather high I have also clocked in about that in commissions in March alone. It is true that it takes money to make money. All of this is going to be covered through trading profits where in thx past I have just gone out of pocket considering it all as hobby expenses... although this will be the highest fee month yet.
Tomorrow I look forward to cheating the market makers out of more of their money.
Jeff.
Ultimately I am finding that these are going to be worth it in the end.
March 25th
Opened and closed a few trades, finally closing one that has been hanging for a couple of weeks. Sadly I lost about 18 cents when I could have held it for a break even a little later in the day. I set a VTSO but was too tight. Oh well, not enough to worry about. I did close out one loss late yesterday for almost $1 per share, it needed to go.
My stats are updated and are still looking reasonably good as my daily average is staying above $240 and my trade average is over $115.
I closed out a trade from another service but I don't count those in with these trades, although I could as they are very similar in duration and scope. I messed up a bit on it though. It was an option entry aimed at under $2 and I got in at $1.30. The standing target was to be 100% return to close automatically so I set my limit sell at $2.60... I should have set it for the 100% of $2 entry target or $4. Today the stock gapped at the open and the option went through $3 and was advised to be sold for $3.10. I let it go at $2.60 giving up 50 cents in profit... although I won't really complain about a 100% return seeing as anyone else likely bought at $2 and made $1.10 or 55% profit.
Counting these service trades as well bumps my daily average to $288 and my trade average to $134.
As much as I hate to look a gift horse in the mouth I am expecting to book some losers soon. i have to hefty positions not doing so well and a smattering of smaller ones also. The day trading is nice as these are offset beforehand as we open and close trades each day booking profits to offset any potential looming losses.
I need to remain focused on "right sizing" my trades and using balanced sizing. For example a $10 option might be best to use a 1 contract trade, a $5 option 2 contracts, a $3 option 3 contracts, $2 option 5 contracts. This can be scaled to match the capital being traded with as each represents an approximate or maximum $1000 risk per trade. If I were to risk $2000 then just double the contract count.
The key here is that any loss is not bigger than any other loss so losses do not suddenly get larger than gains due to an attempt to cherry pick the trades. I have always said that in order to win with someone else's plan all trades must be taken as picking half could end up with all the losers being picked. This day trading the only trades I have not taken have been ones that I have not managed to get into due to just missing the price. So far I am among the quickest traders so I have not missed very many at all..
Today I missed the $4,000 mark by about $50 in the three main systems that I am using. There is still tomorrow.
I am discounting the Optioneer stuff right now as I found some inconsistencies in the accounting and I am waiting for a response about this. The account is in the red, enough that there is no way that I can recoup the loss in the time frame allotted for the performance guarantee...so we will see what happens there. If this day trading and other services keep going like this I may consider transferring some cash back for this shorter term more lucrative trading...put it where it works the best.
Jeff.
My stats are updated and are still looking reasonably good as my daily average is staying above $240 and my trade average is over $115.
I closed out a trade from another service but I don't count those in with these trades, although I could as they are very similar in duration and scope. I messed up a bit on it though. It was an option entry aimed at under $2 and I got in at $1.30. The standing target was to be 100% return to close automatically so I set my limit sell at $2.60... I should have set it for the 100% of $2 entry target or $4. Today the stock gapped at the open and the option went through $3 and was advised to be sold for $3.10. I let it go at $2.60 giving up 50 cents in profit... although I won't really complain about a 100% return seeing as anyone else likely bought at $2 and made $1.10 or 55% profit.
Counting these service trades as well bumps my daily average to $288 and my trade average to $134.
As much as I hate to look a gift horse in the mouth I am expecting to book some losers soon. i have to hefty positions not doing so well and a smattering of smaller ones also. The day trading is nice as these are offset beforehand as we open and close trades each day booking profits to offset any potential looming losses.
I need to remain focused on "right sizing" my trades and using balanced sizing. For example a $10 option might be best to use a 1 contract trade, a $5 option 2 contracts, a $3 option 3 contracts, $2 option 5 contracts. This can be scaled to match the capital being traded with as each represents an approximate or maximum $1000 risk per trade. If I were to risk $2000 then just double the contract count.
The key here is that any loss is not bigger than any other loss so losses do not suddenly get larger than gains due to an attempt to cherry pick the trades. I have always said that in order to win with someone else's plan all trades must be taken as picking half could end up with all the losers being picked. This day trading the only trades I have not taken have been ones that I have not managed to get into due to just missing the price. So far I am among the quickest traders so I have not missed very many at all..
Today I missed the $4,000 mark by about $50 in the three main systems that I am using. There is still tomorrow.
I am discounting the Optioneer stuff right now as I found some inconsistencies in the accounting and I am waiting for a response about this. The account is in the red, enough that there is no way that I can recoup the loss in the time frame allotted for the performance guarantee...so we will see what happens there. If this day trading and other services keep going like this I may consider transferring some cash back for this shorter term more lucrative trading...put it where it works the best.
Jeff.
Tuesday, March 23, 2010
March 23rd...no sense in getting fancy
No sense in getting fancy as things just roll along here. Opened a few trades, closed one for a $260 profit. Targets are set for the others. I end up left in four open trades, two from previous days and two from today. I know the idea of day trading is to be in and out of trades same day, first hour in fact for these, but with the market not showing much volatility the trades are just not moving right away, so we hold them for target prices or for review the next day.
Stats:
Daily average is up a bit to $235.26
Trade average is up to $112.93
25 trades closed
12 days in
So far none of the option trades have been bad...some break evens and some small gainers but no losers. Cool.
Things ran smoothly in the room today.
This is turning into a very boring blog as a result of no analysis or insights, if anything prior could be called insightful.
Oh, well, I am making money and that, while isn't terribly exciting for anyone else, is pretty good for me.
Up 28.23% in my account to date.
Jeff.
Stats:
Daily average is up a bit to $235.26
Trade average is up to $112.93
25 trades closed
12 days in
So far none of the option trades have been bad...some break evens and some small gainers but no losers. Cool.
Things ran smoothly in the room today.
This is turning into a very boring blog as a result of no analysis or insights, if anything prior could be called insightful.
Oh, well, I am making money and that, while isn't terribly exciting for anyone else, is pretty good for me.
Up 28.23% in my account to date.
Jeff.
Monday, March 22, 2010
Funky day today in the trading arena
Boy. Today started out good, nice gap down in the market, I was really looking forward to some trading, get a handful of trades in, make some money and maybe even get to bump my stats up.
The trouble with trading with a group is the classic "lowest common denominator". I suppose that it isn't so much the issue as people not following instructions. The main one is to not ask about anything that we are not actively trading or at least actively watching. Being in on time to get the pre-market setups is important but not critical. Although if someone is late don't expect a rehash of the whole setup as the rest are trading and the moderator is trying to help us get in and out of profitable trades. Then there is an assumption that the room is supposed to be a nice warm cuddly space, well, it's about trading. Most are there by choice to make money, not be coddled.
The long and short is there are many who are a distraction for all that are there for some serious reasons and that blew today's trade up. We had a nice $500 trade set and it ended up being a $50 trade as we had to exit early in order to return order to the room.
Ultimately the trade hit the $500 mark and then some...made it to about $700, but nobody was in it then.
Enough whining on my part, tomorrow is another trading day.
Looking at my stats now I have lowered the numbers due to the small trade today.
I have been using play sizing with my trades through this service so far and today I decided to up the ante by using all option trades at 10 contracts unless they are really expensive options...anything up to an average of $3.60. That allows for perhaps a larger trade and a smaller trade to have the same potential profit target as $1 on options seems to be the norm. This way a loser cannot lose more than a winner due to just having more losing contracts than winning ones.
Going back over my trades thus far I altered the contract counts to reflect this to see what the numbers could have been had I traded full size right away. I could have done this as we have not had a lot of concurrent trades running... even though I allowed for 6.
Total days traded: 11
Total trades closed: 24
Average daily net profit: $ 398.43
Average per trade net profit: $ 182.61
Total net return for the 11 days: 43.83%
Seeing as I would not have traded full size until play testing this is just a hindsight speculation...but interesting none the less.
I updated my stats including today's piddly trade.
Jeff.
The trouble with trading with a group is the classic "lowest common denominator". I suppose that it isn't so much the issue as people not following instructions. The main one is to not ask about anything that we are not actively trading or at least actively watching. Being in on time to get the pre-market setups is important but not critical. Although if someone is late don't expect a rehash of the whole setup as the rest are trading and the moderator is trying to help us get in and out of profitable trades. Then there is an assumption that the room is supposed to be a nice warm cuddly space, well, it's about trading. Most are there by choice to make money, not be coddled.
The long and short is there are many who are a distraction for all that are there for some serious reasons and that blew today's trade up. We had a nice $500 trade set and it ended up being a $50 trade as we had to exit early in order to return order to the room.
Ultimately the trade hit the $500 mark and then some...made it to about $700, but nobody was in it then.
Enough whining on my part, tomorrow is another trading day.
Looking at my stats now I have lowered the numbers due to the small trade today.
I have been using play sizing with my trades through this service so far and today I decided to up the ante by using all option trades at 10 contracts unless they are really expensive options...anything up to an average of $3.60. That allows for perhaps a larger trade and a smaller trade to have the same potential profit target as $1 on options seems to be the norm. This way a loser cannot lose more than a winner due to just having more losing contracts than winning ones.
Going back over my trades thus far I altered the contract counts to reflect this to see what the numbers could have been had I traded full size right away. I could have done this as we have not had a lot of concurrent trades running... even though I allowed for 6.
Total days traded: 11
Total trades closed: 24
Average daily net profit: $ 398.43
Average per trade net profit: $ 182.61
Total net return for the 11 days: 43.83%
Seeing as I would not have traded full size until play testing this is just a hindsight speculation...but interesting none the less.
I updated my stats including today's piddly trade.
Jeff.
Friday, March 19, 2010
Options trading...longer term, or not.
I just closed my first longer term momentum option trade... after a whopping 3 days into the service.
Daily average return is $51.02 which, considering the $1600 total account size, is not bad for a start...2.91%.
So I can add that to my current $255 daily average, sort of. I will probably end up tracking these together in a total investment stat number somehow later.
Obviously I cannot use this one trade to judge anything or do any additional forecasting yet...but it pushed my gross profit for the day up to $1965.00. Nice.
Jeff.
Daily average return is $51.02 which, considering the $1600 total account size, is not bad for a start...2.91%.
So I can add that to my current $255 daily average, sort of. I will probably end up tracking these together in a total investment stat number somehow later.
Obviously I cannot use this one trade to judge anything or do any additional forecasting yet...but it pushed my gross profit for the day up to $1965.00. Nice.
Jeff.
Rollin', Rollin', Rollin'...
Today was a better day for the day trading. There were five separate positions open from previous days and one of them was technically two trades. Now I only have two open trades as they did not move to target prices early today, perhaps they will later.
My total gross profit for the day was $1800. Commissions have to come out of that yet.
The quick take on my updated stats puts me at $319 per day and $111 per trade with a $2552 net profit or 25.52% for the last two trading weeks. If I can at least meet that every two weeks my pretax profits are in the $66K range.
Hmmmm... I have been using the day count as days that had trades opened on... but today none were opened and three were closed. While I count the trades back on the day the trade was opened I am going to count all the days as not doing so will skew my results and artificially inflate them. So, instead of 8 trading days in the last two weeks I will count all days, even Friday last that no trading occurred.
Daily average becomes $255 per day at 2.55% per day.
Updating my forecast according to those numbers puts me at the $50,000 mark every 40 weeks or 10 months... one of my original targets too. That is just working with the capital that I have in place right now.
My last post mentioned a daily target of $250, I figured at 1% per day I could achieve that in short order (months) so today's stats already has me beating that goal. $255 per trading day is 2.55% ROI. Doing some forecasting with compounding at 2.55% per day and using only 5 days per week instead of five will beat my $50K in 10 months by a little bit....
Say, by $400,000.
Oh Shit!
I double checked my math, it is correct...so I dropped to 2% per day and I see $135K in the 10 month window. That is a more realistic number...even if the first is possible I wonder if I will keep trading big enough to produce that kind of return.
The worst... or best... part is that this is based off of a $10,000 investment. Now, this is taxable income. The next step, as I mentioned, was to transfer to the TFSA to make it non-taxable.
The other best part is that the goal of the trading room is to see every member making at least $500 per day of trading... so I am low and I know some are already far higher than that due to their using the $25,000 minimum US regulated day trading capital minimum. Basically multiply my results by 2.5 or more and that is where I could be given more cash.
Even though these results are not completely mine to lay claim to it has taken two years to learn enough to know to look in the right places for these kinds of opportunities.
I have yet to close some of the other trade services trades and see some of those profits start streaming in.
Although, my Optioneer account took a large hit today due to the strange market opening activity... much larger than I or my broker or his colleagues anticipated. I suspect that I may have to exercise their performance guarantee after all as I see no way that my account can recoup this loss in the time frame allotted for the guarantee. Today I am considering yanking those funds and using them in my regular accounts. As much as this is a larger than expected hit I still have faith in the methodology of the Optioneer trading scheme, I just need to tweak the way that I am applying it... which means reduced return potential to play it far more conservatively.
We'll see what happens in the coming months.
Jeff.
My total gross profit for the day was $1800. Commissions have to come out of that yet.
The quick take on my updated stats puts me at $319 per day and $111 per trade with a $2552 net profit or 25.52% for the last two trading weeks. If I can at least meet that every two weeks my pretax profits are in the $66K range.
Hmmmm... I have been using the day count as days that had trades opened on... but today none were opened and three were closed. While I count the trades back on the day the trade was opened I am going to count all the days as not doing so will skew my results and artificially inflate them. So, instead of 8 trading days in the last two weeks I will count all days, even Friday last that no trading occurred.
Daily average becomes $255 per day at 2.55% per day.
Updating my forecast according to those numbers puts me at the $50,000 mark every 40 weeks or 10 months... one of my original targets too. That is just working with the capital that I have in place right now.
My last post mentioned a daily target of $250, I figured at 1% per day I could achieve that in short order (months) so today's stats already has me beating that goal. $255 per trading day is 2.55% ROI. Doing some forecasting with compounding at 2.55% per day and using only 5 days per week instead of five will beat my $50K in 10 months by a little bit....
Say, by $400,000.
Oh Shit!
I double checked my math, it is correct...so I dropped to 2% per day and I see $135K in the 10 month window. That is a more realistic number...even if the first is possible I wonder if I will keep trading big enough to produce that kind of return.
The worst... or best... part is that this is based off of a $10,000 investment. Now, this is taxable income. The next step, as I mentioned, was to transfer to the TFSA to make it non-taxable.
The other best part is that the goal of the trading room is to see every member making at least $500 per day of trading... so I am low and I know some are already far higher than that due to their using the $25,000 minimum US regulated day trading capital minimum. Basically multiply my results by 2.5 or more and that is where I could be given more cash.
Even though these results are not completely mine to lay claim to it has taken two years to learn enough to know to look in the right places for these kinds of opportunities.
I have yet to close some of the other trade services trades and see some of those profits start streaming in.
Although, my Optioneer account took a large hit today due to the strange market opening activity... much larger than I or my broker or his colleagues anticipated. I suspect that I may have to exercise their performance guarantee after all as I see no way that my account can recoup this loss in the time frame allotted for the guarantee. Today I am considering yanking those funds and using them in my regular accounts. As much as this is a larger than expected hit I still have faith in the methodology of the Optioneer trading scheme, I just need to tweak the way that I am applying it... which means reduced return potential to play it far more conservatively.
We'll see what happens in the coming months.
Jeff.
Thursday, March 18, 2010
Daytrading and the original targets
Well, I get to revisit the original targets that I set out a while back for average daily profits for my old daytrading plan. Currently I am 8 trading days in but I have only opened and closed trades on 6 of those days. Once I close the trades that were opened on the other two days I will adjust my averages and stats accordingly. Over the course of time I expect that I will have most trading days active... or I will just count all days whether traded or not for the purpose of forecasting.
I am at 6.87% total return on my original capital. I transferred $10,000 over for this venture and this week is the first that I have really used this amount to it's maximum as I am currently holding $10,646 in trades open... seeing as they are all still open I guess I cannot call these typical daytrades... perhaps just really short term trades.
Anyway, Seeing as I am just finished the ramping up process as I have just managed to allocate full capital and I am already hitting the 6+% mark I feel reasonably confident that I can easily nail 1% per trading day in the coming months.
Targets for the margin account are $250 average daily profits as this will accommodate taxation to provide a particular after tax profit of about $150. At 1% this is attainable in 6 months as I will see $25,000 in capital at that point. Seeing as the target of the room is $500 days with $25,000 starter cash I would be quite happy with my 1/2 sized target.
Most of the profitable trades have been options trades and a margin account does not extend margin to options trades...so whether these are in the margin or TFSA make no difference. This allows me to transfer cash to the TFSA and trade tax free over there...my original plan... which only needs to see a $150 day average for the same target income. That is month three at 1% per day or the same six month window if the return is only 0.8% per day... on average.
This only counts my daytrading account. I have my swing and momentum options account as well as my index futures options accounts that I will tally in the final total later. For the purposes of "income" the daytrading is the primary as it is going to be most active followed by the momentum options then the swing trading. I am likely to leave the futures alone to grow on their own and consider it a retirement account for now.
The coming weeks will tell if my targets are attainable or not.
Jeff.
I am at 6.87% total return on my original capital. I transferred $10,000 over for this venture and this week is the first that I have really used this amount to it's maximum as I am currently holding $10,646 in trades open... seeing as they are all still open I guess I cannot call these typical daytrades... perhaps just really short term trades.
Anyway, Seeing as I am just finished the ramping up process as I have just managed to allocate full capital and I am already hitting the 6+% mark I feel reasonably confident that I can easily nail 1% per trading day in the coming months.
Targets for the margin account are $250 average daily profits as this will accommodate taxation to provide a particular after tax profit of about $150. At 1% this is attainable in 6 months as I will see $25,000 in capital at that point. Seeing as the target of the room is $500 days with $25,000 starter cash I would be quite happy with my 1/2 sized target.
Most of the profitable trades have been options trades and a margin account does not extend margin to options trades...so whether these are in the margin or TFSA make no difference. This allows me to transfer cash to the TFSA and trade tax free over there...my original plan... which only needs to see a $150 day average for the same target income. That is month three at 1% per day or the same six month window if the return is only 0.8% per day... on average.
This only counts my daytrading account. I have my swing and momentum options account as well as my index futures options accounts that I will tally in the final total later. For the purposes of "income" the daytrading is the primary as it is going to be most active followed by the momentum options then the swing trading. I am likely to leave the futures alone to grow on their own and consider it a retirement account for now.
The coming weeks will tell if my targets are attainable or not.
Jeff.
Edge of my seat? Not Really.
The market (S&P 500) opens flat, the same open as the close yesterday. To me that means that it will start out without too much movement, at least early on. That has, so far, proven to be the case as it waffles around the 1166 area. Of course I have spreads at 1160 and 1165. I expect to take a loss on the 1160's.
Today is options expiry. Normally I don't take much stock in that but having trades that are very close makes one take notice of what is happening. This is one of the reasons why paper trading is not much use... no money on the line then the line is not observed and the nuances of market movement are not noted for later recall.
Options technically expire today BUT that is not the end of it. The final settlement numbers are tallied at the open on Friday so an overnight move can, and will, affect the size of a loss, in my case, or even whether an option may be exercised due to moving into the money overnight.
Normally I would expect spreads and iron condors to be far enough away at expiry that the final numbers are next to meaningless, seeing that as long as the final levels are inside the range full profits are retained.
In my idealized world I would like to see the market drop away and settle tomorrow a hair under 1160, that would be really nice. Anywhere in the 1160 to 1165 range would be OK. Then the market is free to rally on up. This would keep my spreads in good shape and push all my long positions into the green zone tomorrow and over the weekend. Seeing as I have 21 on the go now and half are options... but all April or June expirys.
I'll update my stats over the weekend. I'll end up with four sets, one each for the Optioneer stuff, daytrading, stock swing trades and the options momentum trades.
Jeff.
Today is options expiry. Normally I don't take much stock in that but having trades that are very close makes one take notice of what is happening. This is one of the reasons why paper trading is not much use... no money on the line then the line is not observed and the nuances of market movement are not noted for later recall.
Options technically expire today BUT that is not the end of it. The final settlement numbers are tallied at the open on Friday so an overnight move can, and will, affect the size of a loss, in my case, or even whether an option may be exercised due to moving into the money overnight.
Normally I would expect spreads and iron condors to be far enough away at expiry that the final numbers are next to meaningless, seeing that as long as the final levels are inside the range full profits are retained.
In my idealized world I would like to see the market drop away and settle tomorrow a hair under 1160, that would be really nice. Anywhere in the 1160 to 1165 range would be OK. Then the market is free to rally on up. This would keep my spreads in good shape and push all my long positions into the green zone tomorrow and over the weekend. Seeing as I have 21 on the go now and half are options... but all April or June expirys.
I'll update my stats over the weekend. I'll end up with four sets, one each for the Optioneer stuff, daytrading, stock swing trades and the options momentum trades.
Jeff.
Wednesday, March 17, 2010
Crunch time on a couple of trades
The trouble with playing index futures option spreads is the same trouble that had me stop trading spreads on SPY a few months back, lack of volatility.
Initially, lack of volatility looks like a good thing when you just don't want the security or index that the spread is on to move against the spread... or to stay within the entire trade for an iron condor. Low volatility sounds like the levels are just not changing quickly so the moves, when they come, will generally be slow.
While that seems to be true on the surface, volatility is priced into the premiums of the options contracts. Higher volatility equals higher premiums... they just plain cost more. The reverse is also true, low V = lower premiums which leads to having to take either wider spreads or spread that are closer to the level at the time.
This is where things can get hairy.
To keep the absolute risk the same all the time, for instance 20 points on the S&P500 futures between short and long calls, means moving that much closer to the levels at the time. I placed two call spread trades last month with short durations. These were at the 1160/1180 and 1165/1185 levels. In order to make my profits the S&P500 would have to stay under these levels. For the sake of one day entering the trades I could have (and did try...but that is another story) to set 1170/1190.
One day made the difference between being profitable and taking a decent loss...had I closed my trades today. I decided to hold as the price of the trade to close is inflated due to the proximity of the S&P levels to the spread trades. So buying back my short 1160 call while the S&P is at 1165 would cost me $1250 in intrinsic value (5 points X $250) plus at least half that again in extrinsic value. That is close to a $2000 loss.
Waiting one more day drops the extrinsic value by a certain amount...waiting until Friday drops it to zero. So my dilemma is now to decide if I out wait the market and hope for a move lower and/or let the trades expire ITM and take only the real intrinsic value hit by not buying back the options. Last month my trades lost a bit as I closed them taking the extra hit...as it turned out I should have (famous last words, I know) held them to see 100% of my profit as the market did turn for me...too late though.
The trouble is for every point into my trade the S&P goes the tally against me goes up $250...per trade.
I still really like the iron condor trades, I just need to rethink my short term entries...at the very least when the market is low in volatility. Had I been doing these trades all on my own I would have sacrificed some gains to move the trade farther as I knew that these ones ended up inside the trend channel on the upside... but the odds were in my favour even then. The thing about odds is the math really doesn't matter... what happens is what matters. I have that argument the odd time with mathees though.
I did have some faith in the S&P not breaking the 1150s before Friday... but that was last week and 1150 is already past.
Jeff.
Initially, lack of volatility looks like a good thing when you just don't want the security or index that the spread is on to move against the spread... or to stay within the entire trade for an iron condor. Low volatility sounds like the levels are just not changing quickly so the moves, when they come, will generally be slow.
While that seems to be true on the surface, volatility is priced into the premiums of the options contracts. Higher volatility equals higher premiums... they just plain cost more. The reverse is also true, low V = lower premiums which leads to having to take either wider spreads or spread that are closer to the level at the time.
This is where things can get hairy.
To keep the absolute risk the same all the time, for instance 20 points on the S&P500 futures between short and long calls, means moving that much closer to the levels at the time. I placed two call spread trades last month with short durations. These were at the 1160/1180 and 1165/1185 levels. In order to make my profits the S&P500 would have to stay under these levels. For the sake of one day entering the trades I could have (and did try...but that is another story) to set 1170/1190.
One day made the difference between being profitable and taking a decent loss...had I closed my trades today. I decided to hold as the price of the trade to close is inflated due to the proximity of the S&P levels to the spread trades. So buying back my short 1160 call while the S&P is at 1165 would cost me $1250 in intrinsic value (5 points X $250) plus at least half that again in extrinsic value. That is close to a $2000 loss.
Waiting one more day drops the extrinsic value by a certain amount...waiting until Friday drops it to zero. So my dilemma is now to decide if I out wait the market and hope for a move lower and/or let the trades expire ITM and take only the real intrinsic value hit by not buying back the options. Last month my trades lost a bit as I closed them taking the extra hit...as it turned out I should have (famous last words, I know) held them to see 100% of my profit as the market did turn for me...too late though.
The trouble is for every point into my trade the S&P goes the tally against me goes up $250...per trade.
I still really like the iron condor trades, I just need to rethink my short term entries...at the very least when the market is low in volatility. Had I been doing these trades all on my own I would have sacrificed some gains to move the trade farther as I knew that these ones ended up inside the trend channel on the upside... but the odds were in my favour even then. The thing about odds is the math really doesn't matter... what happens is what matters. I have that argument the odd time with mathees though.
I did have some faith in the S&P not breaking the 1150s before Friday... but that was last week and 1150 is already past.
Jeff.
Tuesday, March 16, 2010
Updated Day Trading Stats
I updated my performance stats today. I closed some previous trades and opened a new one today. Nothing fancy, one 13 cent stock trade loss (300 shares) and a 20 cents option gain (9 contracts or the equivalent of 900 shares). Both trades fell short of targets but it resulted in counting the day they were opened as a positive day. My profit per trade went up and my profit per day went down.
I also entered five trades with the new service, all were filled as the prices pulled back in the stocks and I used limit orders based on the option prices at the close yesterday. I ended up with about $1600 invested in this service so I will track it accordingly.
My other stock service still has the majority of the trades open. My account is up in paper profits by about 4% overall right now as most are in the money and a couple are showing small losing positions...but that is normal when entering a new option trade.
Jeff.
I also entered five trades with the new service, all were filled as the prices pulled back in the stocks and I used limit orders based on the option prices at the close yesterday. I ended up with about $1600 invested in this service so I will track it accordingly.
My other stock service still has the majority of the trades open. My account is up in paper profits by about 4% overall right now as most are in the money and a couple are showing small losing positions...but that is normal when entering a new option trade.
Jeff.
Saturday, March 13, 2010
Yet another service trial
I am currently using three services that involve data, brokerage or outright trade calling. I have, as I mentioned, given in to the temptation of easier money... or at least money with less overt work to achieve profits.
In review, my initial goal in trading was to do it on the cheap... buy no books, online self directed education, free chart services, DIY trading. I ended up buying a book or two and paying for some inexpensive chart services as I found that better data was in order. I progressed through all sorts of trade styles and execution types including short selling, option buying and selling and have traded a variety of timeframes from minute charts to weekly charts.
Like any long term venture the idea behind the whole process has remained the same, to ultimately become consistently profitable, but the path continues to change along the way as various opportunities present themselves that seem to be consistent with my initial idea.
I begrudgingly signed up for a service last year in order to see if the claims were valid. They were not and I received my money back. Since then I have done the same with trade advisories, stock selection services and educational material. Anything claiming to give trades has not panned out. Anything attempting to provide education has not given anything more than I either already knew or could readily find online.
I found a couple of exceptions. I signed up yesterday for a momentum option trading service. They provide option ideas on stocks with entry targets and followup exit alerts. I actually tried this service once in the fall and ended up cancelling as it did not fit with my mode of trading at the time. Since joining the trading room and listening and reading the comments and whatnot I decided to give it another shot as my trading plan has shifted and the feedback for this service has been very good.
I also know that the moderator in the daytrading room is the source for the momentum trading setups and some of the daytrades have been the same securities in action in the other service.
I am now in one index futures option broker service, one mostly stock swing trading service, one day trading stock/option room and now one options momentum service. As I mentioned in a late blog I also plan on getting back into my very own system(s) as well.
All in all I am finding diversity in the variety of services that I am trying. I think that I will likely keep these four going. At this point two of the four are proving their worth, my timing sucked with the futures option broker but I find their rigid trade entry criteria to be a hobble. This last service looks quite promising given some of the historical trades. The issues I had with it before stemmed from them trading larger priced options than I had capital set aside for and there was a problem with my membership resulting in a week and change gap in the alerts. As a result I missed out on some trades and I also missed some exits... I just cancelled rather than having it cost me due to the cancellation policy.
My idea remains intact of consistent profitability. My path has changed but I still stand behind not having to spend an arm and a leg on education if one is willing to put in some time and keep an open mind about the whole learning curve in trading.
Jeff.
In review, my initial goal in trading was to do it on the cheap... buy no books, online self directed education, free chart services, DIY trading. I ended up buying a book or two and paying for some inexpensive chart services as I found that better data was in order. I progressed through all sorts of trade styles and execution types including short selling, option buying and selling and have traded a variety of timeframes from minute charts to weekly charts.
Like any long term venture the idea behind the whole process has remained the same, to ultimately become consistently profitable, but the path continues to change along the way as various opportunities present themselves that seem to be consistent with my initial idea.
I begrudgingly signed up for a service last year in order to see if the claims were valid. They were not and I received my money back. Since then I have done the same with trade advisories, stock selection services and educational material. Anything claiming to give trades has not panned out. Anything attempting to provide education has not given anything more than I either already knew or could readily find online.
I found a couple of exceptions. I signed up yesterday for a momentum option trading service. They provide option ideas on stocks with entry targets and followup exit alerts. I actually tried this service once in the fall and ended up cancelling as it did not fit with my mode of trading at the time. Since joining the trading room and listening and reading the comments and whatnot I decided to give it another shot as my trading plan has shifted and the feedback for this service has been very good.
I also know that the moderator in the daytrading room is the source for the momentum trading setups and some of the daytrades have been the same securities in action in the other service.
I am now in one index futures option broker service, one mostly stock swing trading service, one day trading stock/option room and now one options momentum service. As I mentioned in a late blog I also plan on getting back into my very own system(s) as well.
All in all I am finding diversity in the variety of services that I am trying. I think that I will likely keep these four going. At this point two of the four are proving their worth, my timing sucked with the futures option broker but I find their rigid trade entry criteria to be a hobble. This last service looks quite promising given some of the historical trades. The issues I had with it before stemmed from them trading larger priced options than I had capital set aside for and there was a problem with my membership resulting in a week and change gap in the alerts. As a result I missed out on some trades and I also missed some exits... I just cancelled rather than having it cost me due to the cancellation policy.
My idea remains intact of consistent profitability. My path has changed but I still stand behind not having to spend an arm and a leg on education if one is willing to put in some time and keep an open mind about the whole learning curve in trading.
Jeff.
Friday, March 12, 2010
Account performance
I decided to consider the $10,000 that I moved over to test the day trading as the capital base that I am working from for performance measurements. I have other trades in process in my swing trading portion. This allows up to $30,000 in tradeable cash with margin and I don't think I have ever gone larger than that as my trade size has been fairly small.
I am keeping the concurrent trade quantity at 6 trades for the purposes of cash allocation. This allows for option trades up to $1,600 in value and stock trades up to $5,000... options are not allowed to use margin as the entire trade is at risk unlike a stock. I may not use up all 6 trades at any given time but this also serves as a money and risk management plan as all trades are balanced in their sizing based on the value of the shares. A larger priced stock will have fewer shares which means the higher per share movements are mitigated by smaller position sizing. Double sizing one trade to use up one "trade allotment" can, and has, result in a double loss skewing the end results. If I sit in 3 trades worth of cash, so be it. At least they are not producing losses even if they are not producing gains.
Yesterday was a price example...a $300 + day with two trades. I had two still outstanding, one which resolved itself today. One outstanding trade was a half size of 100 shares and the entry point was hit again yesterday so I added 100 shares to bring it up to full size. I still had $10,000 in margin not being used.
Having said that, after closing one of the trades left from earlier in the week today (profit target hit) I am over 6% net profit on the day trading account. That translates into an 18% increase in trading buying power. I update my trade size spreadsheet to include these increases which will bump my share count per trade up.
Seeing as I can trade odd lots easily enough for all trade types I get to enjoy an immediate compounding of my potential returns as the trades will grow each profitable day.
The corollary to this is that if I take losses my trade size will automatically be reduced thereby lowering my potential losses by the same ratios.
Automatic risk management.
I am working out the expectancy formula and seeing how to apply it to my trading but I see that I need some volume before the formula has any real validity in my case...so I will write about that once I have a better handle on the real implications. I expect that it will allow me to apply a risk factor to adjust my trade sizing according to the expectancy return (a per trade dollar figure) and the expectancy ratio (a trade risk measure... sort of). So far I have applied this factor based on my subjective assessment of the performance of my trading within the trading room. Last week sort of sucked so I reduced my sizing early this week and gradually increased it to full size yesterday as I saw better trade setups take shape and profits resulted.
Today was a non-trading day... I resisted the urge to try to swing my own few trades this morning. I played with my esignal chart setups instead... watched as one open trade hit the profit target, I almost raised it. 16 cents on 10 contracts and it hit 30 cents at one point... but I did not know that ahead of time and could just have easily ended up not getting filled and chasing the price back down to a much lower than target profit.
Jeff.
I am keeping the concurrent trade quantity at 6 trades for the purposes of cash allocation. This allows for option trades up to $1,600 in value and stock trades up to $5,000... options are not allowed to use margin as the entire trade is at risk unlike a stock. I may not use up all 6 trades at any given time but this also serves as a money and risk management plan as all trades are balanced in their sizing based on the value of the shares. A larger priced stock will have fewer shares which means the higher per share movements are mitigated by smaller position sizing. Double sizing one trade to use up one "trade allotment" can, and has, result in a double loss skewing the end results. If I sit in 3 trades worth of cash, so be it. At least they are not producing losses even if they are not producing gains.
Yesterday was a price example...a $300 + day with two trades. I had two still outstanding, one which resolved itself today. One outstanding trade was a half size of 100 shares and the entry point was hit again yesterday so I added 100 shares to bring it up to full size. I still had $10,000 in margin not being used.
Having said that, after closing one of the trades left from earlier in the week today (profit target hit) I am over 6% net profit on the day trading account. That translates into an 18% increase in trading buying power. I update my trade size spreadsheet to include these increases which will bump my share count per trade up.
Seeing as I can trade odd lots easily enough for all trade types I get to enjoy an immediate compounding of my potential returns as the trades will grow each profitable day.
The corollary to this is that if I take losses my trade size will automatically be reduced thereby lowering my potential losses by the same ratios.
Automatic risk management.
I am working out the expectancy formula and seeing how to apply it to my trading but I see that I need some volume before the formula has any real validity in my case...so I will write about that once I have a better handle on the real implications. I expect that it will allow me to apply a risk factor to adjust my trade sizing according to the expectancy return (a per trade dollar figure) and the expectancy ratio (a trade risk measure... sort of). So far I have applied this factor based on my subjective assessment of the performance of my trading within the trading room. Last week sort of sucked so I reduced my sizing early this week and gradually increased it to full size yesterday as I saw better trade setups take shape and profits resulted.
Today was a non-trading day... I resisted the urge to try to swing my own few trades this morning. I played with my esignal chart setups instead... watched as one open trade hit the profit target, I almost raised it. 16 cents on 10 contracts and it hit 30 cents at one point... but I did not know that ahead of time and could just have easily ended up not getting filled and chasing the price back down to a much lower than target profit.
Jeff.
Thursday, March 11, 2010
Edgy Optioneering and the Next Idea
While I had two losing trades last month they were only losing trades because I closed them early.
I made a call earlier that the S&P500 would re-test 1150 this month which would have meant holding my February expiring trades would have been a good plan. I ended up closing them when the loss was near it's peak... due to the nature of spread trades and the late term volatility spike associated with near strike market levels I got spooked.
So, same thing is happening with my call spreads this month, even though calls are the most risk averse trades on the books they are mounting substantial paper loses.
Should I be concerned?
Probably.
My lowest calls are at the 1160 level and 1150 should produce enough resistance to carry these trades through to next Friday... but it doesn;t have to. The key is that as long as the market closes Friday (including afterhours trading) anywhere at or under 1160 all my spreads will be fine and I will see 100% of the target profits.
Seeing as there is a 20 point spread in the spreads and each point is worth $250 I will see a loss of $250 per point that the market closes above 1160 in one trade and per point that it closes over 1165 in two other trades.
I liked setting my own spreads in Questrade better as I could pick my own levels cleaner... having said that my levels were closer and therefore more risky. So perhaps I just need to back off on my aggressive stance on these trades at least until the market picks up some volatility to increase the spreads for better risk ratios.
I don;t have access to decent futures options quotes... yet... so I cannot judge whether I could produce better spreads or not. I think that I might be able to so I will setup a trial account with a US futures broker sometime to try out their platform and spin the numbers in my spread calculator. See if the same rules can be applied to futures contracts as I applied to regular options spreads.
Always something to keep my mind occupied.
I scanned through the charts that we have been trading in the trading room and I am picking up on some of the trade setups that are suggested. The key is to be able to recognize the setups pre-market and have the right stocks in front at the time. I think I could still do that on my own with a handful of stocks, maybe fifty, sprinkle in a couple of ETFs and trade with the general trend as it sets up in the market.
I could tie this into the bullish percent index charting by having a group of stocks in each represented index and trade among the index stocks while that particular index is doing well relative to the other indices.
Then there is the pivot point relevance, volume confirmations and order flow to know when to buy, where to stop and where to target.
Definitely a theory to pursue... sometime.
Jeff.
I made a call earlier that the S&P500 would re-test 1150 this month which would have meant holding my February expiring trades would have been a good plan. I ended up closing them when the loss was near it's peak... due to the nature of spread trades and the late term volatility spike associated with near strike market levels I got spooked.
So, same thing is happening with my call spreads this month, even though calls are the most risk averse trades on the books they are mounting substantial paper loses.
Should I be concerned?
Probably.
My lowest calls are at the 1160 level and 1150 should produce enough resistance to carry these trades through to next Friday... but it doesn;t have to. The key is that as long as the market closes Friday (including afterhours trading) anywhere at or under 1160 all my spreads will be fine and I will see 100% of the target profits.
Seeing as there is a 20 point spread in the spreads and each point is worth $250 I will see a loss of $250 per point that the market closes above 1160 in one trade and per point that it closes over 1165 in two other trades.
I liked setting my own spreads in Questrade better as I could pick my own levels cleaner... having said that my levels were closer and therefore more risky. So perhaps I just need to back off on my aggressive stance on these trades at least until the market picks up some volatility to increase the spreads for better risk ratios.
I don;t have access to decent futures options quotes... yet... so I cannot judge whether I could produce better spreads or not. I think that I might be able to so I will setup a trial account with a US futures broker sometime to try out their platform and spin the numbers in my spread calculator. See if the same rules can be applied to futures contracts as I applied to regular options spreads.
Always something to keep my mind occupied.
I scanned through the charts that we have been trading in the trading room and I am picking up on some of the trade setups that are suggested. The key is to be able to recognize the setups pre-market and have the right stocks in front at the time. I think I could still do that on my own with a handful of stocks, maybe fifty, sprinkle in a couple of ETFs and trade with the general trend as it sets up in the market.
I could tie this into the bullish percent index charting by having a group of stocks in each represented index and trade among the index stocks while that particular index is doing well relative to the other indices.
Then there is the pivot point relevance, volume confirmations and order flow to know when to buy, where to stop and where to target.
Definitely a theory to pursue... sometime.
Jeff.
Streamlining the daytrading
Today was a good day, profit wise and because the trading room managed to start and finish two trades and stay within the 1.5 hour target time. Yesterday's trades that were left open are still open though so this allows some more profit room in case those two happen to need to be closed for any losses...we'll see. I am looking forward to the days when we can run 5 trades and have most come out ahead like those today.
Updating my numbers:
Daily average net profit: $172.73
Trade average net profit: $39.86
Trades total: 13
Account gain: $518.20
Account gain is a tough one as I have segregated the account in my mind as to what is being used for day trading vs other trading...so I'll just use the hard numbers instead of a percentage return. It's somewhere over 3% this week as a whole though.
I am playing with two performance tracking formulae that give me an idea of overall record and a ratio for future trade expectation. Once I get a handle on exactly what the numbers mean I will elaborate further. The short story is that they should indicate to me general trade expectations to help determine whether I should be upsizing or down sizing my positions based on historical profit statistics.
I did some number crunching on my Optioneer trades last night but have yet to add some of the "detached" spreads I placed to recoup some of the losses on two trades. Everything is positive but I may be changing the trade entry criteria in order to better diversify the trades as a whole and to reduce the overall risk with wider iron condor call/put levels.
The overall impression I am left with is that some of my expectations, while realistic under most market circumstances, may have been a bit too aggressive. My overall trading goal is going to govern how aggressive I may need to be in any single strategy that I am working. Seeing as I am working three actively now it looks like I can afford to loosen the reigns a bit on the Optioneer trades. My initial plan was to get to my primary cash flow goal number one with Optioneer alone. Seeing as I may be able to reach that goal faster through day trading while still running Optioneer and the medium term swing trades... well... let's just say that I am quite happy playing things a little looser.
All in all I am feeling pretty good with my progress even though I have not followed my initial idea...that of doing this all on my own. I have learned that "wholly self directed" may not be the most efficient path towards my ultimate goals.
Having said that, deciding what "help" to hire along the way can be more of a mine field than the stock market itself. I have tried a great number of services to whittle down to the ones that work and that takes resources in both time and money that I had not initially anticipated.
I did not envision doing a report of services available so I have not gone there. Some did not work due to the fact that the underlying plans are just not valid, others didn't fit my style or account type, some needed more money to enact. So rather than service bashing I will, eventually, talk about the ones that did work out. Most have limited subscriber list size so getting in, if not on the ground floor, is a game of attrition so the topic may be moot anyway.
The day trading room is one such service. 200 subscribers only and there is a waiting list. Today indicated why it needs to be restricted as we played out an option trade. We could see how even just one member rocking the boat can affect the entire trade outcome easily for the group.
It's certainly getting there though. Today was a $330 USD day net all commissions and I was using about 1/2 sized trades.
Jeff.
Updating my numbers:
Daily average net profit: $172.73
Trade average net profit: $39.86
Trades total: 13
Account gain: $518.20
Account gain is a tough one as I have segregated the account in my mind as to what is being used for day trading vs other trading...so I'll just use the hard numbers instead of a percentage return. It's somewhere over 3% this week as a whole though.
I am playing with two performance tracking formulae that give me an idea of overall record and a ratio for future trade expectation. Once I get a handle on exactly what the numbers mean I will elaborate further. The short story is that they should indicate to me general trade expectations to help determine whether I should be upsizing or down sizing my positions based on historical profit statistics.
I did some number crunching on my Optioneer trades last night but have yet to add some of the "detached" spreads I placed to recoup some of the losses on two trades. Everything is positive but I may be changing the trade entry criteria in order to better diversify the trades as a whole and to reduce the overall risk with wider iron condor call/put levels.
The overall impression I am left with is that some of my expectations, while realistic under most market circumstances, may have been a bit too aggressive. My overall trading goal is going to govern how aggressive I may need to be in any single strategy that I am working. Seeing as I am working three actively now it looks like I can afford to loosen the reigns a bit on the Optioneer trades. My initial plan was to get to my primary cash flow goal number one with Optioneer alone. Seeing as I may be able to reach that goal faster through day trading while still running Optioneer and the medium term swing trades... well... let's just say that I am quite happy playing things a little looser.
All in all I am feeling pretty good with my progress even though I have not followed my initial idea...that of doing this all on my own. I have learned that "wholly self directed" may not be the most efficient path towards my ultimate goals.
Having said that, deciding what "help" to hire along the way can be more of a mine field than the stock market itself. I have tried a great number of services to whittle down to the ones that work and that takes resources in both time and money that I had not initially anticipated.
I did not envision doing a report of services available so I have not gone there. Some did not work due to the fact that the underlying plans are just not valid, others didn't fit my style or account type, some needed more money to enact. So rather than service bashing I will, eventually, talk about the ones that did work out. Most have limited subscriber list size so getting in, if not on the ground floor, is a game of attrition so the topic may be moot anyway.
The day trading room is one such service. 200 subscribers only and there is a waiting list. Today indicated why it needs to be restricted as we played out an option trade. We could see how even just one member rocking the boat can affect the entire trade outcome easily for the group.
It's certainly getting there though. Today was a $330 USD day net all commissions and I was using about 1/2 sized trades.
Jeff.
Wednesday, March 10, 2010
Closed some overnighters
Closed some laggard overnight trades today and opened two more.
This day trading at the open is turning into short term momentum trading. Quite a few trades are doing nothing off the start and taking a day to resolve...or two...and then not really doing much. Sadly I didn't start keeping stats on these specifically but I think that I would be better off closing them at the end of the day rather than holding them over...but I am not the one that came up with the trade idea in the first place so I do not have all the criteria and factors to make that decision easily. For now I will ride along and see how it works out.
Today I have 11 trades closed this week and two open overnight.
Average per trade is down to $17.09 but my daily average is up to $94.00.
I half expect that will drop if all I did tomorrow was to close the two open trades as they look as if they are set for a loss... but that could be completely wrong based on the setup they are in as well as I could easily have 5 more trades tomorrow that make nice gains.
I know very well that there is a good possibility of making really good profits doing the early trading but the good profits will be from the trades that take off right off the bell and those have been few so far. Last week had a couple of those but there were many more that were missed due to the coddling that was going on with the non-traders in the group. That does not seem to be an issue this week so either a few dropped, were dropped or did some homework over the weekend.
I pulled a boffo by leaving a stop on an overnight stock and it got stopped out mid day. All I had to do was buy it back later in the day when the price was lower anyway...even at that it did not make any great profits for me, so in hindsight I might as well have left it alone.
Considering that I am trading a little less than half size positions right now I consider I am doing well enough. After this week, if I see a solid profit number I may ramp them up 25% to 50% larger and end up with 100% sizing by the following week.
I still think that the group has some growing pains to go through as I could easily handle more concurrent trades given my sizing but we are topping out at five. I would love to see up to ten.
Jeff.
This day trading at the open is turning into short term momentum trading. Quite a few trades are doing nothing off the start and taking a day to resolve...or two...and then not really doing much. Sadly I didn't start keeping stats on these specifically but I think that I would be better off closing them at the end of the day rather than holding them over...but I am not the one that came up with the trade idea in the first place so I do not have all the criteria and factors to make that decision easily. For now I will ride along and see how it works out.
Today I have 11 trades closed this week and two open overnight.
Average per trade is down to $17.09 but my daily average is up to $94.00.
I half expect that will drop if all I did tomorrow was to close the two open trades as they look as if they are set for a loss... but that could be completely wrong based on the setup they are in as well as I could easily have 5 more trades tomorrow that make nice gains.
I know very well that there is a good possibility of making really good profits doing the early trading but the good profits will be from the trades that take off right off the bell and those have been few so far. Last week had a couple of those but there were many more that were missed due to the coddling that was going on with the non-traders in the group. That does not seem to be an issue this week so either a few dropped, were dropped or did some homework over the weekend.
I pulled a boffo by leaving a stop on an overnight stock and it got stopped out mid day. All I had to do was buy it back later in the day when the price was lower anyway...even at that it did not make any great profits for me, so in hindsight I might as well have left it alone.
Considering that I am trading a little less than half size positions right now I consider I am doing well enough. After this week, if I see a solid profit number I may ramp them up 25% to 50% larger and end up with 100% sizing by the following week.
I still think that the group has some growing pains to go through as I could easily handle more concurrent trades given my sizing but we are topping out at five. I would love to see up to ten.
Jeff.
Tuesday, March 9, 2010
Performance reset and looking forward
After last week's fiasco I decided it would be a good idea to write off last week as learning curve as a group and start tracking today on. I kept the numbers for reference but started a new spreadsheet. This week is starting out much better.
I have 8 trades completed with a $22.43 per trade overall average, net losses and commissions so that is a real number. That is $89.72 per trading day. A little shy of my $200 per day average target. I am also trading about half size trades as I am still in test mode. I need to double my position sizing after I have more confidence in the system so I can increase my profits in the same ratio as losses in order to keep the balance between the two...seeing as I do not know ahead of time which ones will be winners and which will be losers.
Keeping in mind that this daily average only counts the daytrading. I have my Futures options and longer term swing trades to add in there as well. I will be counting the whole works together when I come up with my final daily tallies so I expect that I should be able to surpass $200 per day readily enough... even though I would like to see that target met on each individual plan.
Step one first.
Once I get these going I will investigate the few other plans that I wanted to do completely independently.
Following that I want to transfer a bunch of cash to my TFSA and get that up and going again. The thing about margin accounts with Questrade is that, while they do allow 3:1 for stock trading they don't allow any for options. I understand that as options can very volatile and can lose their entire value quickly if not careful. This means that there is no advantage in holding option trades in a margin account so they may as well be in a tax sheltered account. I plan on transferring chunks of cash in large enough quantities to cover one or two trades at a time.
Jeff.
I have 8 trades completed with a $22.43 per trade overall average, net losses and commissions so that is a real number. That is $89.72 per trading day. A little shy of my $200 per day average target. I am also trading about half size trades as I am still in test mode. I need to double my position sizing after I have more confidence in the system so I can increase my profits in the same ratio as losses in order to keep the balance between the two...seeing as I do not know ahead of time which ones will be winners and which will be losers.
Keeping in mind that this daily average only counts the daytrading. I have my Futures options and longer term swing trades to add in there as well. I will be counting the whole works together when I come up with my final daily tallies so I expect that I should be able to surpass $200 per day readily enough... even though I would like to see that target met on each individual plan.
Step one first.
Once I get these going I will investigate the few other plans that I wanted to do completely independently.
Following that I want to transfer a bunch of cash to my TFSA and get that up and going again. The thing about margin accounts with Questrade is that, while they do allow 3:1 for stock trading they don't allow any for options. I understand that as options can very volatile and can lose their entire value quickly if not careful. This means that there is no advantage in holding option trades in a margin account so they may as well be in a tax sheltered account. I plan on transferring chunks of cash in large enough quantities to cover one or two trades at a time.
Jeff.
New platform...again
Well, I tried to change my trading platform for today's trading with no luck. I received the notice late morning and I did not want to try to set it up at that point. I played around with it this afternoon and play tested with an order to get the feel for it.
I forgot how flexible it is and how easy and quick to place orders.
The account box is the same, no need to change it anyway. The quote boxes are similar but have added order features. I can set the order through the typical BUY, SELL style of buttons with quantity and price adjustment boxes as well as a drop down order type (for market, limit, GTC etc.). That is nice but there is a "dome" display which gives a price ladder indicating the various quote prices. Clicking on a price on the ladder autofills the order price, hitting the buy/sell button places the order at that price and there is an extra column to indicate my active unfilled orders. I think I can set it to place the order in one click as well...I'll play some more first.
The best part is having up to 8 charts active with 5 quote boxes doubling as quick order boxes that each have drop down menus to open up 5 stocks each. In theory I can have 25 stocks pre-loaded ready to trade and each one be just a click away.
There are only two option boxes that function similarly...no drop downs though.
That is just asking for some serious overtrading. I expect to have 5 or so active orders so I will use this more for monitoring potential and active positions without having to open and close boxes or re-select stocks.
Jeff.
I forgot how flexible it is and how easy and quick to place orders.
The account box is the same, no need to change it anyway. The quote boxes are similar but have added order features. I can set the order through the typical BUY, SELL style of buttons with quantity and price adjustment boxes as well as a drop down order type (for market, limit, GTC etc.). That is nice but there is a "dome" display which gives a price ladder indicating the various quote prices. Clicking on a price on the ladder autofills the order price, hitting the buy/sell button places the order at that price and there is an extra column to indicate my active unfilled orders. I think I can set it to place the order in one click as well...I'll play some more first.
The best part is having up to 8 charts active with 5 quote boxes doubling as quick order boxes that each have drop down menus to open up 5 stocks each. In theory I can have 25 stocks pre-loaded ready to trade and each one be just a click away.
There are only two option boxes that function similarly...no drop downs though.
That is just asking for some serious overtrading. I expect to have 5 or so active orders so I will use this more for monitoring potential and active positions without having to open and close boxes or re-select stocks.
Jeff.
Monday, March 8, 2010
Housekeeping, Questrader Elite, One Down
There is not too much to report on the trading front today, just some housekeeping mainly.
I cancelled one swing style trading service as the track record was next to abysmal. Considering the marketing said that I should be making nice profits in the first 30 days....not only was I seeing losses I was also seeing a 1 in 7 win rate. At that the winner was just a small profit as well. Full money refund.
I did go back and check the historical track record. 57% winners. Not a spectacular record at all. Now had I made every single trade over the period I would have made out OK. Say $1000 trades every single time would have me in the $20,000 profit mark after well over 200 trades. History didn't seem to want to repeat itself or I would have held the service through.
One of my trial criteria is typically to test and use the "free trial" or guarantee period to pay for the service. If it can do that then I will carry it forward for a while and see how it works. To date I have not ever had one single service do that.
The second service is doing much better. 1 winner, 7 in the money trades and one loser. Not bad
Then there is the daytrading.
Work in progress this one. My trading volume is up just over 60 trades this month so I elected to upgrade to Questrader Elite again. This gives me more active charts, multiple order boxes and a dome order view which, I haven't tried before, allows me to place orders by clicking on the quote. I also recall something about being able to place limit target orders and stop orders simultaneously...but I might be wrong on that one.
As far as the service is concerned, I like the live atmosphere of a trading room. The trades are somewhere under the 50% winners right now....but I have pretty much chosen to discount last week as a writeoff due to the issues surrounding people not being able to follow instructions and the gearing up of a new service.
I should have waited until this week to start. If I add up the total subscriber base and multiply the annual revenue from this alone it certainly behooves the host/moderator/supplier to produce some results. The attrition rate if he does not will be terrible.
I have some faith in this though. Others are using other services from the same fellow and they are quite happy with the results. So I am only one week into a four week trial anyway. Like I said though, I may start over with this one.
Jeff.
I cancelled one swing style trading service as the track record was next to abysmal. Considering the marketing said that I should be making nice profits in the first 30 days....not only was I seeing losses I was also seeing a 1 in 7 win rate. At that the winner was just a small profit as well. Full money refund.
I did go back and check the historical track record. 57% winners. Not a spectacular record at all. Now had I made every single trade over the period I would have made out OK. Say $1000 trades every single time would have me in the $20,000 profit mark after well over 200 trades. History didn't seem to want to repeat itself or I would have held the service through.
One of my trial criteria is typically to test and use the "free trial" or guarantee period to pay for the service. If it can do that then I will carry it forward for a while and see how it works. To date I have not ever had one single service do that.
The second service is doing much better. 1 winner, 7 in the money trades and one loser. Not bad
Then there is the daytrading.
Work in progress this one. My trading volume is up just over 60 trades this month so I elected to upgrade to Questrader Elite again. This gives me more active charts, multiple order boxes and a dome order view which, I haven't tried before, allows me to place orders by clicking on the quote. I also recall something about being able to place limit target orders and stop orders simultaneously...but I might be wrong on that one.
As far as the service is concerned, I like the live atmosphere of a trading room. The trades are somewhere under the 50% winners right now....but I have pretty much chosen to discount last week as a writeoff due to the issues surrounding people not being able to follow instructions and the gearing up of a new service.
I should have waited until this week to start. If I add up the total subscriber base and multiply the annual revenue from this alone it certainly behooves the host/moderator/supplier to produce some results. The attrition rate if he does not will be terrible.
I have some faith in this though. Others are using other services from the same fellow and they are quite happy with the results. So I am only one week into a four week trial anyway. Like I said though, I may start over with this one.
Jeff.
Wednesday, March 3, 2010
Day Trading Three
No, I am not going to give blow by blow every day.
Today was notable as it started out more than a little odd. I set up at home to listen in and do some trading. I setup my laptop for the audio and plugged speakers into my PC USB for power. I was setting up my trading platform (nice to get Questrade's Questrader Pro back on line now...so much easier to see everything at once and execute trades with one click on the security and one click on the buy/sell button...but I digress) and jotting down some of the setups to watch when I decided to turn on my overhead lights.
ZAP!
The lights came on and the computer went off. Smell of burnt electronics wafting from the back of my PC.
Turns out that I fried at least the power supply, the USB port, the speakers and the earphone plug on the laptop all in one go. I cannot see how it was the lights that did it but there is something funky going on.
Now I was up and running in less than 30 minutes in my office on different equipment when I should have taken the hint...don't trade today, I was not meant to trade today...or at least not meant to make any money.
Two trades, one long play that netted a whole 10 cent gain and a large for me put option play that lost 23 cents.
Now, seeing as the trading room provider has some sort of obligation to perform with timely advice on trade executions and seeing as this is live I expect that the next few days will be better. One poor day in the first three is not a braking situation at all.
So, time to check out the physical damage to the two computers and go over the wiring to see what, if anything there, might have caused this.
Jeff.
Today was notable as it started out more than a little odd. I set up at home to listen in and do some trading. I setup my laptop for the audio and plugged speakers into my PC USB for power. I was setting up my trading platform (nice to get Questrade's Questrader Pro back on line now...so much easier to see everything at once and execute trades with one click on the security and one click on the buy/sell button...but I digress) and jotting down some of the setups to watch when I decided to turn on my overhead lights.
ZAP!
The lights came on and the computer went off. Smell of burnt electronics wafting from the back of my PC.
Turns out that I fried at least the power supply, the USB port, the speakers and the earphone plug on the laptop all in one go. I cannot see how it was the lights that did it but there is something funky going on.
Now I was up and running in less than 30 minutes in my office on different equipment when I should have taken the hint...don't trade today, I was not meant to trade today...or at least not meant to make any money.
Two trades, one long play that netted a whole 10 cent gain and a large for me put option play that lost 23 cents.
Now, seeing as the trading room provider has some sort of obligation to perform with timely advice on trade executions and seeing as this is live I expect that the next few days will be better. One poor day in the first three is not a braking situation at all.
So, time to check out the physical damage to the two computers and go over the wiring to see what, if anything there, might have caused this.
Jeff.
Tuesday, March 2, 2010
Re-visiting All In... Again.
It would appear that I needed to revisit my targets for Optioneer trading. After suffering a loss of profits, (not a loss in capital), and not getting the fills that I was targeting, namely $300 per trade per month, my targets need to be massaged.
My current was 6% of the trade value or $300 based on the $5000 total exposure. That worked out to a 6.6% ROR based on the 1.55 point target profit ($309.50). The lowest I was willing to go was $297 which is still 6.32% ROR. The scale is as follows:
1.3 points = $247 = 5.20% ROR
1.35 points = $259.50 = 5.47% ROR
1.40 points = $272.00 = 5.75% ROR
1.45 points = $284.50 = 6.03% ROR
The thing that I was losing sight of was the advantage of having as much capital in play at any time. All possible trades for each month. The issue is that this restricts me to placing the 30 day trades which puts me at the mercy of the market if the entry date is not the idea date. This is what happened in February as I filled last days and the market dropped out.
Having said that if I had stuck to my view of the market at the time I would have seen 100% of my profits...I waffled and fell prey to the emotions of the market and chose to close when I should have held..
So, I can drop to $284.50 target profit and still meet my original 6% ROR, but that is not enough of a change to make this work.
I figured that I could boost my returns by using the Eminis to place trades of 1/5th size to avoid having the odd bits of cash languishing which effectively increases my yield a bit. Then placing the odd call spread above my margin allowance to again increase my yield. All in all if I drop my initial target from 6% to just getting in at the minimum day count at whatever price I would be farther off.
Missing a $250 trade expiring in March in favour of a $325 trade expiring in April doesn't cut it.
Getting a lower $250 trade in March and another $250 in April is $500. Missing March and getting only $325 in April.. well... it isn't $500. Now $250 trades are really $247 and that is a 5.20% trade.
Assume that I can squeak $200 to $300 extra right now due to partial trades and call spreads. That amounts to $35 to $43 per trade or another 0.73% to 0.9%. This bumps me back up to the 6% plus mark again.
So the new plan...or revisiting a version that I already had written about... is to just get in 100% each month even if it means accepting lower fills and perhaps even closing the odd trade a day or two early to free up capital.
I wish that I had done this thinking last night as I missed the last day to secure March EOM expiry trades today... time to review the trades coming up for April and get them filled. I have the luxury of time now so I can cherry pick these trades and get the fills that I want for a few days.
I might be able to talk my broker into placing call and put spreads even though they are, technically, not part of the optioneer strategy anymore...just to get filled.
Jeff.
My current was 6% of the trade value or $300 based on the $5000 total exposure. That worked out to a 6.6% ROR based on the 1.55 point target profit ($309.50). The lowest I was willing to go was $297 which is still 6.32% ROR. The scale is as follows:
1.3 points = $247 = 5.20% ROR
1.35 points = $259.50 = 5.47% ROR
1.40 points = $272.00 = 5.75% ROR
1.45 points = $284.50 = 6.03% ROR
The thing that I was losing sight of was the advantage of having as much capital in play at any time. All possible trades for each month. The issue is that this restricts me to placing the 30 day trades which puts me at the mercy of the market if the entry date is not the idea date. This is what happened in February as I filled last days and the market dropped out.
Having said that if I had stuck to my view of the market at the time I would have seen 100% of my profits...I waffled and fell prey to the emotions of the market and chose to close when I should have held..
So, I can drop to $284.50 target profit and still meet my original 6% ROR, but that is not enough of a change to make this work.
I figured that I could boost my returns by using the Eminis to place trades of 1/5th size to avoid having the odd bits of cash languishing which effectively increases my yield a bit. Then placing the odd call spread above my margin allowance to again increase my yield. All in all if I drop my initial target from 6% to just getting in at the minimum day count at whatever price I would be farther off.
Missing a $250 trade expiring in March in favour of a $325 trade expiring in April doesn't cut it.
Getting a lower $250 trade in March and another $250 in April is $500. Missing March and getting only $325 in April.. well... it isn't $500. Now $250 trades are really $247 and that is a 5.20% trade.
Assume that I can squeak $200 to $300 extra right now due to partial trades and call spreads. That amounts to $35 to $43 per trade or another 0.73% to 0.9%. This bumps me back up to the 6% plus mark again.
So the new plan...or revisiting a version that I already had written about... is to just get in 100% each month even if it means accepting lower fills and perhaps even closing the odd trade a day or two early to free up capital.
I wish that I had done this thinking last night as I missed the last day to secure March EOM expiry trades today... time to review the trades coming up for April and get them filled. I have the luxury of time now so I can cherry pick these trades and get the fills that I want for a few days.
I might be able to talk my broker into placing call and put spreads even though they are, technically, not part of the optioneer strategy anymore...just to get filled.
Jeff.
Day Trading Two
I traded again today until 1030h. Covering the trades is of little consequence as any one trade is just that. Four completely different stocks (one option and one missed entry) resulted in an up day... which is good as yesterday ended down by less than the commission costs.
$145 between the two days with very small position sizing. My option trade was the big winner today as it was inside month and just ITM. $4.90 to $6.00 on two contracts is a $220 trade.
My overall win rate is 2 of 5, not stellar but the trades average out to $29 per trade net losses and commissions. The idea is to keep the losses tight and let the winners run.
Return on investment is hard to gauge as I never had my whole capital at work. Having said that I am using my margin account which allows my 3:1 margin. I have about $5,000 in there that is not already in medium term trades so I will count this as my base for now. That leaves me with a 2.91% return for two days.
Yesterday was supposed to be a trial day for the trading room as this is a brand new service setup so we were not supposed to make any money... so if I do not count yesterday I am actually at 3.25%.
There are about 200 people in the "trading room" at once, all paid subscribers as I mentioned. The executions are fast. The room administrator...I don't know what he is called, is running the show by bringing up stocks and pointing out the entry levels and possible targets. I can follow along and see what is going on on my charts easy enough but we are paying him to come up with profitable ideas.
Originally this was not my idea of trading as I wanted a self directed account where I am the producer of the ideas and executioner of the trades... and the beneficiary of the profits. I am learning more of what to watch for in the first hour of trading. I did not fair very well in my initial foray into early hour trading before and now I see some of my pitfalls quite clearly.
So, for the time being I will follow along and produce some gains and grow my margin account. I figure that I can treat this as a training course rather than a cash cow so once I get enough experience under my belt I will be looking to do this on my own. It does give me a crutch that I could use if my own ideas end up not panning out.
Jeff.
$145 between the two days with very small position sizing. My option trade was the big winner today as it was inside month and just ITM. $4.90 to $6.00 on two contracts is a $220 trade.
My overall win rate is 2 of 5, not stellar but the trades average out to $29 per trade net losses and commissions. The idea is to keep the losses tight and let the winners run.
Return on investment is hard to gauge as I never had my whole capital at work. Having said that I am using my margin account which allows my 3:1 margin. I have about $5,000 in there that is not already in medium term trades so I will count this as my base for now. That leaves me with a 2.91% return for two days.
Yesterday was supposed to be a trial day for the trading room as this is a brand new service setup so we were not supposed to make any money... so if I do not count yesterday I am actually at 3.25%.
There are about 200 people in the "trading room" at once, all paid subscribers as I mentioned. The executions are fast. The room administrator...I don't know what he is called, is running the show by bringing up stocks and pointing out the entry levels and possible targets. I can follow along and see what is going on on my charts easy enough but we are paying him to come up with profitable ideas.
Originally this was not my idea of trading as I wanted a self directed account where I am the producer of the ideas and executioner of the trades... and the beneficiary of the profits. I am learning more of what to watch for in the first hour of trading. I did not fair very well in my initial foray into early hour trading before and now I see some of my pitfalls quite clearly.
So, for the time being I will follow along and produce some gains and grow my margin account. I figure that I can treat this as a training course rather than a cash cow so once I get enough experience under my belt I will be looking to do this on my own. It does give me a crutch that I could use if my own ideas end up not panning out.
Jeff.
Monday, March 1, 2010
Daytrading, another self test
Quite a while back I had an idea to trade in the first hour of the market in order to make a few good intraday swing style trades at the time that the trading is the most volatile. I found that it was tough due to poor information flow or just plain wrong judgement calls. I made some nice trades and some poor trades.
I have learned a lot doing this testing of my ideas, and some ideas of others as well. The thing that I find about all the old ideas that I have tried is that they always reside in the back of my mind as I think about future ideas or trades. Something will come up to remind me of something I tried before and may offer a new slant or a twist that may make it work better.
This is just another example, the early day trade. I plan to start with some pre-market setups this time...get positioned before the big volume start in some cases.
I have learned a lot doing this testing of my ideas, and some ideas of others as well. The thing that I find about all the old ideas that I have tried is that they always reside in the back of my mind as I think about future ideas or trades. Something will come up to remind me of something I tried before and may offer a new slant or a twist that may make it work better.
This is just another example, the early day trade. I plan to start with some pre-market setups this time...get positioned before the big volume start in some cases.
Today I jumped back in and joined a chat room style setup (paid subscription). It took only a few minutes to setup my charts in my old platform, nice to get back into something that has some faster execution and tracking tools. I am set up now for pre-market trading as well as after market...not that I plan on being there after market. It was also nice to hear some banter about the market and the securities being looked at.
RIMM and GOLD were on the plate and I ended up with a break even morning with only two trades. I looked at the options a bit and would have been better off trading those even with the higher commissions. That may become my focus in future.
I bailed on my trades before the big run up in GOLD and before the return to break even in RIMM. The GOLD potential had I played my stop just 5 cents lower (even a penny would have done it as I got nailed at $72.00) was a full $2 gain for my entry by noon.
The setup was to get in near the daily pivot point at $71.27, I waffled and got in at $71.40. I was following along with the room but my normal play would have been to follow the price with 1/2 PP moves...I split the pivot point and resistance 1, 2 etc in 1/2 size increments and move the stop as each higher (or lower for shorts) 1/2 point gets hit.
So, in at $71.40 or less (ideally). Initial stop at $70.80 (1/2 S1).
Trailing stops at $71.26, $72.07, $72.88, $73.33 and $73.76, all the 1/2 points of S1 through R2.
Price moves from PP to 1/2 R1 ($72.07) and I placed my stop at $72.00 I should know better then using even numbers as I should have used $71.95. I was stopped out and left the trade at that. Since, the price hovered there and moved past $72.88 without pause and cleared $73 to hover at the current $73.40 range. Consolidation and prime exit point here.
Definitely worth noting is that the monthly 1/2 R1 line is $73.41 which was the upper range of the day thus far.
RIMM was to have been the exact same play, the price did not approach the PP until about 1020h so I got in far too early. When it did approach it nailed the $70.45 and promptly headed back up returning to near the opening price. The best trade plan would have been to short this off the start for the move tot he PP (almost a full dollar) then reverse the trade at the pp for the return (75 to 90 cents depending upon the exit).
As long as I have charts with the pivots and support and resistance lines this is not a difficult method to trade. Right now I am using esignal delayed so my live charting is through my trading platform...there are very few usable tools there for charting... so I may upgrade my esignal package to realtime again soon. Once I establish a credible profitable trading strategy and pay for the service that is.
No charts today.
Jeff.
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