I was away from my computer for the entire trading day and of course gold did the move that was to have been the setup to get into the trade. As a result I took the trade smaller than planned a little past the entry.
I used IAU as a proxy for gold futures or CFDs. It is cheap, under $15, so I can buy enough to let me feel comfortable with the smaller break-even move.
I did have trouble figuring out the correlation to the pricec of gold and decide to let the relative price action dictate the final entry. I may take an additional position tomorrow if there is a small pullback.
Off to bed for now, it's been a long day.
Jeff
Questrade, My direct access discount broker.
Thursday, February 3, 2011
Wednesday, February 2, 2011
ERTS Addendum
I look at the closing numbers today and see that ERTS closed almost $1 higher than my exit, $18.12.
It looks like a breakout move that some may try to get in on to ride a momentum gain.
Volume was a huge 38million shares.
It may hold, this is one reason why I tossed around the idea of staging in and out of trades, to let something like this run. I did decide against it for now in favour of the surer bet of getting out at target profits though. Too much gaming involved for me right now as I am still keeping a lower trading profile.
It's time I go over my charts again and see what is in position to get back into.
Jeff.
It looks like a breakout move that some may try to get in on to ride a momentum gain.
Volume was a huge 38million shares.
It may hold, this is one reason why I tossed around the idea of staging in and out of trades, to let something like this run. I did decide against it for now in favour of the surer bet of getting out at target profits though. Too much gaming involved for me right now as I am still keeping a lower trading profile.
It's time I go over my charts again and see what is in position to get back into.
Jeff.
DRAT! Electronic Arts (ERTS) jumped today.
That isn't the problem... actually there is no real problem here.
I had a position in ERTS, long, and I have gotten rather lax in checking the pre-market activity on my longer term holdings. I set a target exit and just let it ride.
Upon checking into my portfolio (I keep a tracking portfolio on a free charting site for quick reference as I don't need to log in to look at it) I noted that ERTS had a 15% jump.
DRAT!
I had a much lower target set and, had I been checking the pre-market, I most likely would have either raised my target or cancelled my order and set a VTSO after the open. I did get 15 cents over my target in both entries at least ($1.67 and $1.15)
Based on my entries I saw 5.8% and 8.5% returns... but I have held these since October last year. Compared to my 10 day, 2.5% trade in gold last week that's poor. But, a planned gain is a planned gain.
I am still waiting a setup to go long on a gold trade using IAU as a low priced proxy for gold. It doesn't track as well as I would like but overall I am expecting the trade to span at least a week, so a little off should be no big deal. This is actually a breakout move to the upside and I am using a stop limit entry to buy. Due to the tracking error I need to monitor the entry and probably manually enter it. Although if the price of gold gets close enough to the target entry I can estimate the correlated IAU price pretty close and enter an order at that point.
The variance is just not working out to be able to set this one on autopilot.
Jeff.
I had a position in ERTS, long, and I have gotten rather lax in checking the pre-market activity on my longer term holdings. I set a target exit and just let it ride.
Upon checking into my portfolio (I keep a tracking portfolio on a free charting site for quick reference as I don't need to log in to look at it) I noted that ERTS had a 15% jump.
DRAT!
I had a much lower target set and, had I been checking the pre-market, I most likely would have either raised my target or cancelled my order and set a VTSO after the open. I did get 15 cents over my target in both entries at least ($1.67 and $1.15)
Based on my entries I saw 5.8% and 8.5% returns... but I have held these since October last year. Compared to my 10 day, 2.5% trade in gold last week that's poor. But, a planned gain is a planned gain.
I am still waiting a setup to go long on a gold trade using IAU as a low priced proxy for gold. It doesn't track as well as I would like but overall I am expecting the trade to span at least a week, so a little off should be no big deal. This is actually a breakout move to the upside and I am using a stop limit entry to buy. Due to the tracking error I need to monitor the entry and probably manually enter it. Although if the price of gold gets close enough to the target entry I can estimate the correlated IAU price pretty close and enter an order at that point.
The variance is just not working out to be able to set this one on autopilot.
Jeff.
Monday, January 31, 2011
FX equivalent trades
Today was to have been an FX trade for the Australian to US dollar (AUDUSD pair). Seeing as I do not have a forex account I looked for an alternative in the ETF world. FAX is an Australian dollar trust which closely follows the AUD so I figured it would be my best bet.
Seeing as there were no short funds (reverse correlation) I would have to short the ETF in order to take advantage of the expected pullback. The stop was about $1 higher than entry and the target was over $3.50 lower, a nice risk/return ratio... except for one hitch.
The order was rejected at the broker.
I did wonder as volume was not huge on this fund whether I would be able to short it in the first place, I guess not. As a result I am sitting on the side lines out of the trade. Too bad I did all the math to get into it.
I fully expected to not be able to take part in all trades through this newsletter service, so this is the first. I will be able to take the long side at least as there will be no trouble buying this fund at such time as appropriate for a long position.
Oh well. I am curious to see if this trade works out anyway.
Jeff.
Seeing as there were no short funds (reverse correlation) I would have to short the ETF in order to take advantage of the expected pullback. The stop was about $1 higher than entry and the target was over $3.50 lower, a nice risk/return ratio... except for one hitch.
The order was rejected at the broker.
I did wonder as volume was not huge on this fund whether I would be able to short it in the first place, I guess not. As a result I am sitting on the side lines out of the trade. Too bad I did all the math to get into it.
I fully expected to not be able to take part in all trades through this newsletter service, so this is the first. I will be able to take the long side at least as there will be no trouble buying this fund at such time as appropriate for a long position.
Oh well. I am curious to see if this trade works out anyway.
Jeff.
Friday, January 28, 2011
Gold... short for the pull back.
I am not a gold bug by any stretch of the imagination. I know I used to do some day trading off of the gold indices some time back, and had fun with that, but I would take the long and short with equal ease.
Today I closed a gold short that I entered and managed by using a newsletter service that I started earlier in the month.
This is not a typical hyped newsletter or trading service. It's inexpensive, informative, membership is small and is based on personal trades made by the newsletter author. The only reason I am doing this is I have followed this fellow for some time now and have seen his ideas play out well. Also I was on his mailing list when it came time for him to actually monetize his ideas. Based on his fee and number of readers he is not doing this for the money.
That is the good side, the not so good side is that he bases his trades on futures contracts, CFDs (Contracts For Difference... which I have to research more to really understand), FX and commodities. These are all less familiar to me than typical stocks and options.... but that is half the fun.
The last trade was a short gold play to take advantage of the counter trend move as gold pulls back (my style of trade in the first place). He based the trade on CFDs that are worth $10 for every $1 (research needed here). Not only do I not have access to these I doubt that my broker has them anyway and there are restrictions that do not allow US citizens to even trade these... not that I am American but it just makes them likely harder to get into.
In order to be able to trade in my current arena I need to convert everything over to ETFs... which was easy enough as I just plotted the Gold March contract prices (highs and lows over 6 months) compared to the corresponding ETF highs and lows (DGZ for short and IAU for long), calculated the current price correlation and the current ratios, plugged in the target entry, exit and stops and VOILA! ETF conversion.
My entry was bang on and my exit was 5 cents lower than the exit target... but that is due to me not being able to trade ETFs afterhours as futures and CFDs are, so I took a 5 cent loss of potential to ensure a pre-market exit. It turns out I could have nailed the target, but that is the nature of trading.
DGZ entry at $15.73 jan 18th (short Gold ETF)
DGZ exit at $16.30 jan 28th (today)
3.6% gain in 10 days. a 100 share trade pays for the annual membership to the newsletter. Nice start.
I played it small in order to be able to not be concerned about how much I had in the trade and to ensure that I could take part in other trades that may come up. We had a S&P500 trade that I lost a few pennies on but it was opened and closed as a daytrade and I had to wait until the next day to close mine out... obviously a hinderence being restricted to typical stock trading hours.
Jeff.
Today I closed a gold short that I entered and managed by using a newsletter service that I started earlier in the month.
This is not a typical hyped newsletter or trading service. It's inexpensive, informative, membership is small and is based on personal trades made by the newsletter author. The only reason I am doing this is I have followed this fellow for some time now and have seen his ideas play out well. Also I was on his mailing list when it came time for him to actually monetize his ideas. Based on his fee and number of readers he is not doing this for the money.
That is the good side, the not so good side is that he bases his trades on futures contracts, CFDs (Contracts For Difference... which I have to research more to really understand), FX and commodities. These are all less familiar to me than typical stocks and options.... but that is half the fun.
The last trade was a short gold play to take advantage of the counter trend move as gold pulls back (my style of trade in the first place). He based the trade on CFDs that are worth $10 for every $1 (research needed here). Not only do I not have access to these I doubt that my broker has them anyway and there are restrictions that do not allow US citizens to even trade these... not that I am American but it just makes them likely harder to get into.
In order to be able to trade in my current arena I need to convert everything over to ETFs... which was easy enough as I just plotted the Gold March contract prices (highs and lows over 6 months) compared to the corresponding ETF highs and lows (DGZ for short and IAU for long), calculated the current price correlation and the current ratios, plugged in the target entry, exit and stops and VOILA! ETF conversion.
My entry was bang on and my exit was 5 cents lower than the exit target... but that is due to me not being able to trade ETFs afterhours as futures and CFDs are, so I took a 5 cent loss of potential to ensure a pre-market exit. It turns out I could have nailed the target, but that is the nature of trading.
DGZ entry at $15.73 jan 18th (short Gold ETF)
DGZ exit at $16.30 jan 28th (today)
3.6% gain in 10 days. a 100 share trade pays for the annual membership to the newsletter. Nice start.
I played it small in order to be able to not be concerned about how much I had in the trade and to ensure that I could take part in other trades that may come up. We had a S&P500 trade that I lost a few pennies on but it was opened and closed as a daytrade and I had to wait until the next day to close mine out... obviously a hinderence being restricted to typical stock trading hours.
Jeff.
Friday, January 14, 2011
Lethargic Trading Strategy
... at least that is what it feels like.
I closed two trades this month one winner and one loser.
I started looking at gold ETFs to see if I want to dabble in those, perhaps look again at some others. Gold should be set for a pullback, in fact it already started without me so I will likely wait this move out.
That was exciting.
Jeff.
I closed two trades this month one winner and one loser.
I started looking at gold ETFs to see if I want to dabble in those, perhaps look again at some others. Gold should be set for a pullback, in fact it already started without me so I will likely wait this move out.
That was exciting.
Jeff.
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