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.
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