It is an hour long video, but it is interesting discussion about left brain vs right brain and what trading style fits your dominate side of the brain.
Posts
So just glancing at my summary of results. I was reviewing the section where I classify my profits from the source of the idea. So far it looks like I am best just following my own ideas. Do not get me wrong IWO has been and will continue to be a great educational source. But I have come to the realization that he structures his portfolio in such a way that it only makes sense to do his trades if you do all of them. He is reallly good about keeping risk balanced. So when you pick and choose you may be picking the unlucky few that loose money. But all of his positions are in the context of the overall portfolio. I am not saying I won't take any more of his trades but I will be that much more critical. This month I found myself and my orignal ideas doing well even though I got stopped out of a few of my own trades it looks like most of my porfits for the month of March were wipped out with the IWO trades that I took. And looking further it looks like I do even worse when I take one o...
http://www.cnbc.com/id/36111899 I do not personally like the company but I think it will be a hit. They are pricing 24 million shares at $12-$14 per share and they have the option to sell an additional 2.7 million shares if demand for the stock is strong. Last year Prime America as a stand alone unit had $2.2 Billion in revenues and $495 million in Net profit. If I am doing the math right that is about $18.53 in profit per share [$495 million NP/ (24 million initial issuance + 2.7 million Citi remaining shares)]. I think I want to get in on this one. I think the ticker is going to be PRI. I have it on my watch list so I know when it trades publicly.
I have 3 components to my personal page. Section one is a short bio and picture, section two is my trading performance, and section three is my evolving trading plan.
PFE In a post a while back that I can't seem to track down I mentioned that I was interested in PFE as it traded closer to 17 and it 200 day moving average. PFE is currently trading right on its 200 day moving average and it seems to be acting as support. I am buying 5 17 Jun '10 calls @ .80 for a total of $400. Stop: 16.75 ($130) Entry: 17.23 Target: 19 ($610) Risk vs Reward: about 1:5 I would be interested in selling the 16 puts if this name pulled back further. COP I am also interested in COP. I am looking at buying a ratio spread in August. More specifically I like the idea of selling the 50 put and buy 2 of the 52.50 calls. I can put one of these trades on for 1.12. Stop: Break of 200 day currently at 48.26. Risk (335) Entry: 51 ish Target: 56-58 ($700-$1000) Reward Risk vs Reward: about 1:2 to 1:3
Dr. Steenbarger is there again... I think this post of Dr. Steenbarger may be just what we were looking for to find people like ourselves. I am going to post our blog and my email address and see if I get any feedback.
Today I closed out a trade for about a $40 loss. In the past this would have drove me nuts and I would have rather gambled further and continued holding, thus taking on risk, than take the small loss. Especially once I started tracking my win/loss percentage taking even a small loss was somehow looked at as failure. I was more concerned with an internally generated scoreboard rather than the total profit and loss. I used to want to book a $1 gain than a $1 loss. This makes no sense as a win percentage of 100% means nothing if they are all $1. But now that I'm planning on keeping the average $ and % gains and losses in addition to the overall win/loss percentage, it allowed me to take the small loss and see things in the big picture. I'm no longer concerned with the win/loss percentage on a stand alone basis and instead more concerned with the combination of the average $ and % gains/losses. Example 1 : 70% wins looks good on paper by itself. If that were all I was tracking I wo...
I am not sure I am convinced with only looking at 1 day of volume to see how many people might be following IWO's trade recommendations. First like you said most of the volume takes place at or around the ATM options. Also SBUX has had a great run over the last few months and you can see that its first level of support was around 24 from its bull flag breakout highlighted in the chart below: So this was a natural place in my opinion for people to buy puts to protect their gains. This is illustrated well if you look at a daily chart for the 24 put for the past few days (See Below). Notice how it traded almost 2x the amount just 2 days prior when SBUX started to breakdown on the daily chart above. You might even be able to go as far as saying the people who put protection on 3/24 for .10 might had realized by 3/26 when IWO sent out the alert that 24 support looked like it was going to hold and the majority of the volume could be attributed to them cashing in on some profits from thei...
So I've been curious as to how many people are acting on the IWO trade recommendations. We've all seen stocks move in after hours when Cramer hypes something. So just for the hell of it I looked at the SBUX option activity for a trade he recommended on Friday. Below are the results. Normally you see the most volume at and just above and below the current stock price. As you can see here, the $24 put recommendation has more volume than the other nine strike prices combined. Call Volume 22.00 SSU100417C00022000 2.73 0.15 2.58 2.63 10 4,885 23.00 SSU100417C00023000 1.86 0.03 1.65 1.70 12 4,442 24.00 SSU100417C00024000 0.87 0.07 0.89 0.91 141 7,441 25.00 SSU100417C00025000 0.37 0.08 0.36 0.39 ...
From Dr. Steenbarger A couple of years ago, I posted an article ( now available as a PDF ) on managing the psychological risks of trading. I encourage you to review that article; it offers an important perspective for those learning how to trade. The financial risks of trading are fairly well known: If we size positions too large or incur too many runs of losing trades, our capital will become depleted. Lose half your money and suddenly you have to double your remaining capital just to return to breakeven. If you trade every day and average 55% winning trades, you'll incur runs of four consecutive losing trades roughly every month. Size those trades too large and you'll be looking for a new vocation or avocation. (Another article in PDF worth reviewing is Henry Carstens' Introduction to Testing Trading Ideas . Even if you're a discretionary trader, knowing your typical win ratio, average loss size, average drawdown, etc. helps you gauge your fin...
This month has been very volatile in terms of my account value. I have been moving between 15,600 and 16,700 all month. I am currently at about 16,000 net liquidation value. I have been stopped out of about 50% of the positions that I have put on this month. The biggest urge that I am fighting right now is wanting to close out positions that are working. I think that many times we are all guilty of trying to wash away losses with what little gains we may have in positions that may have just started working. I know I am guilty of this on many occasions. I really think this is the reason I leave a lot of money on the table because the last loss I made is always in front of me. Which if you think about it is completely ass backwards. You need to be able to put your losses behind you and be forward looking. I mean learn from those losses but you really need trade amnesia when looking at current positions. Another thing that I found myself doing this month is going long when stocks had alre...
Toward the end of February I was trying to get some exposure to oil going into summer via RIG. I was stopped out because my entry flat out sucked. Then I tried again recently with HES and was stopped out yet again. Here again I think entry is the common theme. So I think I need to make a few tweaks with respect any energy trades that I put on. One is I either need to get a better entry or I need to reduce my trade size to allow for a wider stop loss area. I can also play directionally with some limited risk/reward trades buying call spreads or selling put spreads. I am leaning towards the latter as I prefer to collect the credit when using spreads.I am currently looking to sell Put spreads on the following oil names: DVN, HES, and maybe something with USO. But I am going to sit on it and wait to see what the oil numbers are that are coming out today. I am really starting to prefer analyzing potential positions when the markets are closed as I don't feel the need to rush and put som...
From Dr. Steenbarger Do you find yourself on a performance roller coaster? This is a situation in which you make money for a while, begin to think you have it all figured out, only to fall back, lose money, and feel like a rookie all over again. A while back, I wrote about the performance roller coaster and some of the emotional factors that sustain it. The gist of that important post was that how we process wins and losses affects our subsequent trading--and sometimes contributes to winning and losing streaks. I just finished an enjoyable interview with Mark Wolfinger of the Options for Rookies site . One topic that came up was the way in which traders identify with their P/L. Once a trader's sense of identity and esteem becomes caught up in profits and losses, the trader begins an emotional roller coaster simply due to the natural ups and downs of markets. There's an important difference between *wanting* to make profits and *needing* to make them. Wh...
http://online.barrons.com/article/SB126844973242861545.html#articleTabs_panel_article%3D1 Basically Dom's got it right using TOS free for their analysis, and IB for their execution and pricing. Why not take the best of both worlds.
I am considering a few things in the context of my trading strategy and trading business plan. I mentioned the other day that I am going to at a overall trading strategy to my business plan, Trend/Momentum trading. This will act as the overall theme to my trading and all my trades will be in the context of this strategy. So I guess that then the strategy has to be broken down on a more micro level as to how I trade the trend, I guess these would be called tatics? I haven't ever written a business plan but I vaguelly remember the elements from a marketing class I took. To me the tatics would really be comprised of the different options strategies that I would use to play up, down, or sideways markets. And I think if I break this down with more granularity than I will also need to break down my risk/reward constraints. Because I think a position like and Iron Condor is much different that a flat out buy. In an Iron Condor I may be looking for a minimium return on capital to put the p...
I bought an Apr (SPY) 117/113 put spread, and took the IBM straddle and RIMM double diagonal trade suggestions. Those have been the only two ideas lately that I liked. For the next few months I'm going to probably stick with my current level of activity and passively play small defined risk positions to try and bring in some income while I concentrate on CFA test prep and preparing to move to Chicago. I'm looking forward to jumping in and managing full time in June.
This is irritating. I just did a post and published but as I was clicking off the site I saw that it said "error." So I'll try to reconstruct it again. It went something like this: I just signed up for Twitter on the JasonAndrew email and realized that in addition to opening up the blog and hoping others find us, we should start to seek them out as well. I have some ideas for this but really don't have the time or heart for it until after the CFA exam. Some things are starting to sink in subconsciously. I'm still going to Chicago in search of contacts, education, information, etc. that will help me/us along our journey, but regardless of what produces I think we should start to cultivate our own community as well.
The spy has now beat its all time record by two days, and there is nothing to say that it can't continue. But I think odds are there will be one down day between now and opex. There is no way to no how much down it will be but you have to tkink that people are starting to get nervous and are itching to book some profits. I think there is still room to the upside but I would think further upside would be healthier if we could digest the move of the past few weeks. I mean we are up 12% from the recent correction. Lets see how the rest of the weout pans out.
http://www.markettaker.com/options_blog/ This is the author of the book I'm currently reading on the Greeks. I just took a look at past blog posts and this is something I'll definitely add to my list. Lots of relevant ideas and education for where I'm at right now. Just wanted to share in case it works for you.
MDR: Description McDermott International, Inc. (MII) is a global engineering and construction company with specialty manufacturing and service capabilities. It provides a range of products and services to customers in the energy and power industries, including utilities and other power generators, major and national oil companies, and the United States Government. The Company operates in three business segments: Offshore Oil and Gas Construction, Government Operations, and Power Generation Systems. In December 2009, the Offshore Oil and Gas Construction segment completed a transaction with Oceanteam USA involving the acquisition of an approximate 50% interest in a vessel-owning company, which owns a subsea construction vessel and a 75% interest in another company, which intends to construct a similar vessel. In September 2009, MII’s subsidiary in the Power Generation Systems segment, B&W de Monterrey, acquired certain assets of Instrumentacion y Mantenimiento de Cald...