PCX - Time, Time, Time

"...and then one day you find,

ten years have got behind you,

no one told you when to run,

you missed the starting gun,

and you run and you run,

to catch up with the sun,

but it's sinking,

racing around to come up behind you again..."

I CAN NOT STATE THE IMPORTANCE OF TIMING IN THE MARKET ENOUGH!

Let me back up a bit to catch you up on what's happening. I recently got a job - after approx 10 years of being self employed. So, now I'm on someone else's "time". I'm currently working out the kinks in order to be able to trade the last 30 minutes of the trading day (i.e. 3:30 p.m. EST to 4:00 p.m. EST).

Anyway, my first few days on job corresponded with PCX hitting my stop for 2 consecutive days. I could not get out because of my job. I tried a conditional type of order (which I'll continue to work on) with my broker, but I screwed it up and it didn't work.

Anyway, I had today off - yes, you must have a 3 day weekend after working your first week at a new job don't you??

I broke my rule of only trading in the last 30 minutes of the day and ended up closing PCX because it hit my stop for 2 consecutive days at approx noon today. However, if I had looked at this chart between 3:30 - 4:00 p.m. then I would NOT have gotten out of the trade due to the candle (even though it was a valid exit signal).

Here's the chart at noon, when I exited:

Here's the chart at 4:00 p.m.:

As you can see, the noon chart looks bad - looks like we are going down down down. However, by 4:00 p.m., the buyers had come in and drove those sellers back up. Also all 4 markets: SPY, QQQQ, IWM, DIA all had a higher day.

I.E. - I SCREWED UP.

I take my lumps, here's the result of this trade:

Bought the Call Option for $2.39, and sold it today for $0.49, for a NET LOSS of $1.90 for a ROI of (79% negative ROI).

Even experienced traders can screw up - chalk it up. NEVER BREAK YOUR RULES.

AND REMEMBER - TIME IS UTMOST IMPORTANT!!

So, what do I do now? I continue trading EXACTLY as my trading plan states - I now look for my next entry.

Philippians 4:13

"I can do all things through Christ who strengthens me."

Profits Taken - CBS

Glory to God! The future is so bright that it's dazzling the market makers - poor guy had to put on a pair of shades after seeing what God did for this trade!

Here's the chart:

Just a textbook play. It went right up to where the target was - such a well behaved stock. I could have squeezed a few more pennies out of it, but you never know when those bears are going to come in and get nasty. Close enough, let's not get greedy.

Originally bought this option for $2.80 and sold it today for $4.30, which gave me a $1.50 gain for 53% ROI in 9 trading days. Very sweet.

Time to look for the next one...

PFE - halfway there

God is good!

Halfway to our total trade completion - took profit at first target today:

3 days made $0.11 - that's right, big money. However, it did equal an ROI of 16%, which is a nice return in just 3 trading days.

You MUST think in terms of %ROI so you can compare apples to apples. If you just look at the NET amount you made, then the profit/loss can become distorted and you'll also be less likely to take profit at your targets.

Now, I CURRENTLY HAVE a small trading account and I traded just 1 contract for this first part of the trade. But if my trading account was:

2x larger then I would have traded 2 contracts and made $0.22,

OR

5x larger then I would have traded 5 contracts and made $0.55

OR

10x larger then I would have traded 10 contracts and made $1.11

OR

100x larger then I would have traded 100 contracts and made $11.11

You see, it's all based on %ROI. So, you should be trading and honing your skills in order to keep increasing your %ROI. Because whether your account trading size is $1,000 or $1,000,000 the %ROI is the same - and you keep the profits in the same proportion by keeping the amount of contract options being trading the same percentage in your account.

So, thanks for the $0.11 - I'll take it!!! Now, time to leave halfway and get the rest of the way there.

New Trade - PCX

Proverbs 21:21

"He who pursues righteousness and love finds life, prosperity, and honor."

Happy Valentine's Day!

Here's the chart for this trade:

Simply a pullback entry in an uptrend. Had a close above the high of the low day of the pullback. Stochs are moving up nicely and the overall markets are making new recent highs as well. All is a go for a bullish entry here.

Bought a March 25 Call for $2.39.

Thank you LORD for this trade!

New Trade - PFE

Proverbs 21:31

"The horse is made ready for the day of battle, but victory rests with the LORD."

Here's the chart on the new entry:

As you can see, PFE (like the rest of the markets) is in an uptrend - higher highs and higher lows. The entry today was due to the buyers coming in and pushing up the closing price above the high of the most recent low. This is the classic pullback entry - nothing special, just the norm.

There was some type of news released concerning health care related companies and this stock benefitted from it. I don't know what the news was - don't really care - all I know is that PFE, along with other stocks reacted favorably to it and should continue to do so. This is just a BONUS for this entry. As long as there's no BAD NEWS, then I'd take this type of entry over and over again.

I bought 2 April 19 Calls for $0.66 each. Why two calls? Well, they were cheap, and I've got 2 targets this time. The first target is the most recent high - I shaded that target zone in green. The second target is the next level of resistance above - here's a longer term chart showing that:

I've got 60 days for both targets to hit. Shouldn't be much of a problem for either target. From here, I simply wait and see what the stock is going to do - keeping relaxed.

WFT - profits taken

Thank you LORD for the Valentine's Day Gift - a blessing!

I took profits in WFT today, here's the chart:

This was close enough to my target for me - as I had other trades I wanted to get into and needed to free up some trading capital. Sometimes, when most of the profit has been made, then I'll close out the trade early in order to capture my profit and use that same trading capital to place trades that have a bigger potential. This is called Money Management and is one of the keys in helping you grow your account more proficiently.

I originally bought this option for $3.31 approx 9 trading days ago and sold it today for $4.00, thereby netting a $0.69 profit with an ROI of 20%. Another base hit - Glory to God for this trade.

New Trade - NYB

Deuteronomy 8:18

"But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today."

Got into a new trade today, check out the chart:

I entered this for the following reasons:

1. This is a developing "rounding bottom" pattern. This pattern is when a stock pulls back and makes a shallow looking "U". If this pattern confirms, then it will go back up to the point where it started pulling back and then should break out higher from that point. Check out this chart showing the next level of resistance above as a target:

2. Check out the close - on an uptick in volume, the closing price was up in the zone where the sellers had been recently pushing prices down. This means the buyers are getting stronger.

3. The stock is also reacting to the 50 day moving average and getting a boost up off it.

4. The MACD 2 lines have been going lower, but recently they started going sideways and now look ready to start going up. At the same time, the MACD histogram has been getting more bullish.

5. The financial sector (which NYB is a part of) had a very positive day today. They've been lagging the rest of the markets, but today got a nice boost up. It's my belief that big money is now starting to really go back into this sector. Here's a chart showing the different sectors - the financial sector is represented by XLF, which is the lower right chart - look at the green box - it represents this week's price action. Quite positive.

Lots of reasons to enter. I have a definitive edge and I'm blessed to have found this trade.

I bought the April 18 Call for $1.15. I've got plenty of time for this thing to move. I'll have to determine when to take profits, but I do have 2 targets - the immediate resistance above and the next level above that if this pattern works out for me. I'll just play this one day by day.

Okay George Bailey - get your bank cooking on this stock, we need the price to rise...

TIME...

"The waiting is the hardest part..."

"And then one day you find,

ten years have got behind you,

no one told you when to run,

you missed the starting gun.."

I've been waiting for good trade set ups (i.e. "my edge"). But the past couple of days I haven't been able to find any that I like. You must remember that you'll run into times like these and you are MUCH BETTER off not just taking any trade in order TO trade.

Yes - it IS VERY important to keep your trading account using your set maximum trading capital employed in active trades as much as possible. Just don't sacrifice quality for quantity.

These type of times are most dangerous because you are more prone to let down your guard and try to get into more action. But, you are much better off to wait and use that trading capital to get into a GOOD trade rather than just get into a MEDIOCRE trade. NEVER EVER EVER EVER EVER GIVE UP YOUR EDGE - EVER EVER.

If you want action - then play a video game instead - it'll be much cheaper in the long run. If you want to make money - then time and patience are to be respected.

MAS - profits taken

Glory to God - thank you for another profitable trade!

Well Mr. Stock Market, it's time for me to take back the money I "loaned" you over the last several years. By the way, my interest rate is exorbitant!!

Check out the chart:

As you can see, today's action got close to the target. I COULD stay in this trade for another few days to see what happens. But, I decided to take profits for 3 reasons:

1. This trade is profitable and there's not much room left to hit the target - no need to get overly greedy.

2. See the upper tails on those candles - those are sellers, and who knows when they may get aggressive and start pushing this price back down. I'm not going to ride out the possible push down and possible then push back up from the sellers because of #3.

3. Earnings is right around the corner. Earnings is a GAMBLE. They could push the price up higher or drop it way lower. Nobody knows how the market is going to react to these earnings. Since it's a gamble, it decreases my edge and without an edge - I DON'T TRADE. I booked a good profit in this stock and I'm taking my money and finding the next set up that has a nice edge in my favor.

This is my sandbox and I'm done playing with this trade!

So, my long option on this stock cost $1.80, I sold it today for $2.25 for a $0.45 profit. This gave me an ROI of 25% in approx 19 days. LOVE IT. I'll take these type of trades the rest of my life - base hits.

Now, onto the search for the next one...

New Trade - CBS

Jeremiah 29:11

"For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future."

CBS - I'm getting back into another trade here. After the last trade (and hitting the target/resistance), it had a pullback. The nice thing about the pullback is after a strong down day the buyers came right back in and drove the stock price back up - they did this at a higher price level than that last level of support. This tells me that the buyers are strong.

I've had 2 days of consecutive closes above the level of resistance, the stochs are pointing higher and the MACD looks like it's getting more bullish. The volume is dropping off as we are going higher, however that is a weak point. We've already been to these levels recently and we really don't need volume to accompany the buyers going back up. IF, we were going to NEW RELATIVE highs and the volume was dropping off like it has been, then I would be concerned. But at this price, no worries at all.

Another thing I really like, check out this intraday 5 minute chart:

Notice how the last part of the day, as the prices were going higher, volume was coming into this stock. This tells me that the buyers are here and they are driving it up.

My target is the next level of resistance above - here's a longer term chart to identify this target:

I got long a June 19 Call Option for $2.80. June was the closest option to 90 days out. The other option, March, but it only had 38 days - MUCH TOO close for my liking.

We've got the stop 2 support levels below. From here, we just relax and let the stock do whatever it is going to do.

Early Profits - DDR

Thank you LORD!

I decided to take profits a little early today. It was more of a "gut feeling" than anything else. It's a Friday, we're fairly close to the target, and I'm looking for some good longer term movement out of stocks with entries lining up early next week.

I could have just as easily stayed in and it would have been a good thing to do as well. Sometimes you'll find with trading that there are times when there is no real solid right or wrong way to go, you just gotta follow your gut. My gut said to take the money and use it for the next good set up.

Here's the chart:

I sold the long call today for $1.85 and originally bought it for $1.48, giving me a $0.37 return in 14 trading days for an ROI of 25%. I'll take the trades day in and day out for the rest of my trading career. These could be thought of as "base hits" and base hits are what makes a team WORLD CHAMPIONS.

New Trade - WFT

Isaiah 54:2 “Enlarge the place of your tent, stretch your curtains wide, do not hold back; lengthen your cords, strengthen your stakes.”

i.e. let's get ready for some blessings!

Groundhog Day Trade #2

Here's the chart:

We had 2 consecutive closing days above resistance, which coincides very closely with our last high. The MACD looks like it's starting to move higher and earnings is behind us. All systems are go!

The stop is place a couple of support levels down and we've gotta look at a longer chart to find our next level of resistance (i.e. target) above.

The target is $25.75. I bought the May 22 Call for $3.31, so I've got plenty of time for this trade to work out.

Now, I just sit back and let the market work.

New Trade - MDR

Ephesians 3:20 "Now to him who is able to do immeasurably more than all we ask or imagine, according to his power that is at work within us"

Here's Groundhog Day Trade #1

Check out the chart:

We had 2 days' closing above the broken resistance line (which is now new support). I put my stop below the last low where the buyers came in and drove up the price to break the resistance. I like the big white bullish candle the other day on a nice uptick in volume and the MACDs, after having been negative for quite some time, are just starting to turn bullish. This thing seems poised to take off.

If you look at the chart you can see that this general area has been a support area for awhile, so by putting my stop in where I did, I figure if price does get below this for 2 consecutive closings, then the sellers will have overpowered the buyers and my trade is dead.

I've gotta pull up a longer time frame chart to find the target:

The next level up is just above $25.50, so that will be my target. I'll most likely take profit just before hitting that level.

I bought a May 20 Call for $3.00. Now, I'll just let the market do what it's going to do and I'll sit and wait - I've got plenty of time for this trade to work out.

MTW - Target hit - and then some!

GLORY TO GOD!

Check out this deal:

Got into this one, it went sideways, and then had a pullback. After that it started coming back up and today was earnings - KAPOW!

I usually don't enter trades when earnings is under 2 weeks away. Today was earnings and I entered approx 1 month ago. If you've followed this blog then you know I don't like to trade earnings, because it's more of a gamble. However, if I'm already in a trade and earnings is coming up, then I'll usually just stay in the trade (unless I'm very close to my intended target).

Like I stated above, earnings is a gamble. I don't know what the earnings were. They could have been good or bad - but the main thing is that the market did like them. This made the stock just pop way up above my target. And what do I do when my target is hit? I take my profits. Because once my target is hit, then I have lost my edge for the next move.

I originally bought a Call on this stock for $1.55 and sold it today for $3.20. This gave me an ROI% of 106% in 14 trading days. That's what I'm talking about! High five Grizz!!

I need to add a couple of new positions to my account, but I have had the flu and have not been in any mood to trade. Hopefully, I'll feel better tomorrow and will get into new trades in the next few days. I still have a couple of active trades on, so stay tuned for what those do.