Today's Trades and Trend Trading Analysis

Today was a decent day in trading. John (the moderator) changed up the format today to accommodate both newer members and to even the playing field with regards to trade sizing... suggestions that help to minimize competition within the group for the options that are available for trading.

This is as easy as it can get.

He posts a chart, gives the entry target with some leeway, suggests a trade size and, at the end of the day (1030h), sets a reasonable profit target. All this came about after some discussion in the room on Friday...the day last week that I missed. Today's profit targets are based on a 20% return on the four trades that we placed. If all four hit then we will see just under $1000 for the day and if everyone used the trades size recommendations then everyone stands to at least hit the $500 daily average easily enough.

I closed two of four trades for $410 in profits so my averages are holding pretty close, $444 daily. I am not looking forward to next Friday as I have a couple of trades languishing as the option expiry gets closer. While I don't expect them to expire worthless (100% loss) there is a distinct possibility of that occurring.

So, my plan of using the same trade size for each trade is becoming an accepted way of sizing trades. a small trade, or higher risk, is 3 contracts, a normal is 5 contracts and a large size is 10 contracts. Sounds familiar although I plan on going past 10 contracts in a manner so as to not disrupt the trade that is ongoing and not suck up all the options available. Using stocks was discussed as well and may very well be the direction I go sooner than anticipated...except short selling is not an option in the TFSA account I may just have to keep that reserved for use in the margin account.

I set up a spread sheet to analyze all of the past trades for the newer trend trading service. There was data from January 2008, 229 closed trades. Not bad in the performance department as there was, depending upon trade sizing, between 106% and 160% gains over the two and a half years. Those returns are without using margin so that could be over 200% easily enough with margin use. The winning trades are in the 83% area as well, nice odds.

Another spreadsheet that I did does some forecasting based on the daytrading only and I like where it is heading. As each month progresses and each trading day is closed the numbers used are less and less a forecast for the month and more based on increasingly real numbers. Today the current month daily average is driving me over $100K annually based on a 240 trading day year. I not only expect to be trading more than that I also expect that each month will surpass the last in performance so the numbers will continue to drive upwards. As it stands right now June has equalled May profits, within a few dollars, so I might expect to see a double in profits for June over May. That may depend upon the languishing trades and what trades get entered from here on into the end of the month but I will see at least some sort of increase.

Jeff.