New Trade - KR

Philippians 4:13 "I can do all things through Christ who strengthens me."

Time to make some profit.

Here's the 2nd trade I got into today.

Same method as DELL, the hi/lo method.  2 day's close above a significant high and I'm ready to trade.

The target (i.e. next level of resistance above) is 26.84, so just over a dollar or so away.  Not as much way to go as DELL, but since it's still the same method, then I buy 90+ days out.

I bought the October 26 Call for $1.00, and put my stop just below to levels of support below.

Now that I've given some examples of my different methods of trading, I'm not going to go into the particulars too much anymore to shorten the time it takes to blog these trades.  I'll still put them on here, and with some research of this blog, you'll easily be able to understand how I trade.

Let's make some profit now.

New Trade - DELL

Isaiah 54:17 "... no weapon forged against you will prevail..."

The markets are starting to show some strength again after some foolery lately.

Today I got the second consecutive close above a significant high.  The line on the chart shows the high, but that high was longer than 3 months ago, so you can't see it.  Believe me, it's there.

This is the first method of trading that I use, for lack of a better term, I just call it the "hi/lo" system.  The main thing is that this used to be bear territory and now with 2 days of closing in this territory tells me that the bulls are getting strong and should push the bears back to their next "line in the sand" - i.e. the next level of resistance above, which is approx 23.00

In this method, I'm looking for longer dated option, around 90+ days.  So, today I bought a Nov 18 Call for $1.07.  This trade is something that we'll give plenty of room, and time, to move - also plenty of room above to make some great profit.  I have a stop placed just below the 2nd level of support below.

We'll let God take it from here...

IP - target hit, profit taken

Glory to God, another profitable trade!

Here's the chart:

Textbook choppy market trading - and NO SURPRISE news on this one.

After the entry, the stock went down and traded near the last low.  I actually got out of this trade around 1:00 p.m. EST.  I was watching it go down during the day, saw it hit the zone, and by the time I got my computer up and running (yes, I was at work during this time so my laptop wasn't up and running) the stock price had already started trading back up.

The overall markets were down considerably today, but they also started trading higher going into the close.  If I had waiting to exit until my normal 3:45 p.m. EST trading time, then I would have had much less profit. You gotta take profit when your target is hit and if you can monitor the trades sporadically during the day then do it.  PUTTING on trades need to be at the end of the day, but taking them off can be ANYTIME.

I originally bought this option for $1.50 and sold it today for $1.75.  This gave me a $0.25  profit with an ROI% of 16% in 5 calendar days.  Not bad for a choppy mixed up market.  That's the way choppy market trading goes, just looking for quick small profits.  Guerrilla warfare.  I'll take that trade every single day.

Now I'm back to zero trades on.  I'm comfortable with that.  Once I find another edge, I'll take it.  Until then I'm relaxed.

PXP - took stop, loss

Thanks to BHP, I took a loss yesterday.  It really doesn't phase me, it's just a really great learning experience.  The big takeaway is that it's amazing how news can really affect the market.

One simple takeover can move a sector so incredibly much.  But you know what, that's all part of trading.  There's NOTHING you can do about news.  When news hits, then it's either going to POSITIVELY affect your trade, NEGATIVELY affect your trade, or have NO affect on your trade.  It is what it is.

I always keep my portfolio risk exposure relatively low on each trade - EXACTLY for reasons like yesterday.  If I had purchased 10 Option Contracts, then I would have gotten hurt.  But, due to my account size, I keep my buys at 1-2 Option Contracts.  And, I always figure worst case scenario.

I always think of how bad it would "hurt" if I lost the entire option value.  This way, no matter what happens, my portfolio won't get hurt.  This is called "Portfolio Management". I'm not going to go into the depths of it now, but the gist of it is to keep each trade's risk only equal to a very small portion of your entire portfolio.  This way one bad trade won't hurt you.

Let's get onto the PXP chart:

I had a valid entry on Thursday, and on Friday I took my loss.  Momentum changed - obviously, so in order to protect any value left in my option, I got out.

I originally got into the trade for $1.61, and yesterday I sold the trade for $0.82, which gave me a $0.79 loss for an ROI% of NEGATIVE 49%.

No biggie, it's all part of trading.  Do you know what happened immediately after I took my loss?  I looked for my next trade to get into.  The loss doesn't affect me or my trading, I just keep on trading because I know that my trading style has an edge over the market, so the more I trade, the more my edge has a chance to work.  Just like Vegas baby!

Onward...

KAPOW!!!!

Stepped in front of that one!!

Let me get back up and dust myself off after stepping in front of the Energy Sector train.

Apparently BHP still has enough money after paying for it's spill in the Gulf of Mexico because yesterday it decided to buy HK for approx $38 per share.  BHP MUST REALLY HAVE A LOT OF MONEY because HK closed the day before at $23.49.

Check out the chart of HK:

Yes, that dot in the upper right hand corner of the chart represents the price of HK yesterday.  Nice little spike in volume, huh?  A mere 62% increase from the prior day.  For giggles, I looked at how much it would cost to buy one of the Call Options for HK on Thursday, it was approx $1.00 (or $100 really).  You could have sold that same option for approx $14.00 (or $1,400) on Friday.  Now THAT'S an ROI!!!!

Thanks to BHP, the entire energy sector (XLE) was lifted and was the highest closing sector yesterday.  XLE had a 2.69% increase from it's closing price the day before.  Here's it's chart:

The overall markets gained in the .33% to 1.37% range respectively.  Here's their charts:

So, BHP really pulled up the Energy Sector (Oil and Gas even more), when all the other market sectors were really flat.

Why do I care?  Because the trade on put on the very day before was PXP, which is in the Oil & Gas part of the Energy sector.  Onto the next blog entry...

New Trade - IP

Deuteronomy 28:8 "The LORD will send a blessing on your barns and on everything you put your hand to."

In addition to PXP, I also took 1 other trade, IP.  Here's the chart:

This is just another simple trade.  I'm looking for a quick move lower down to the last low (in yellow).  I bought an August 30 Put for $1.50.

Now, let's see what happens.

New Trade - PXP

Psalm 108:13 "With God we will gain victory, and he will trample down our enemies."

I've been waiting for the market to make up it's mind on where it's going to go.  We were on a long bearish pullback, then a sharp bullish move higher, and now I've got a bearish entry.

So, needless to say it's been quite the choppy market and you just have to be patient and wait for your edge.  I've been in cash for about a week now - my last trades were bullish.

Here's a chart of the trade I took today:

You can see my highs and lows marked on the chart.  I had an entry today in PXP and I'm just looking for this to trade down to the last low.

I bought an August 37 Put Option for $1.61.  Looking for this to be a quick profitable trade.

AKS - took early profit

Another winner - Glory to God!

I took some early profit today.  This stock didn't hit my target, but in just 4 days of trading, there was enough movement for me to take profit now and to keep an eye out for a re-entry.  I'll look for a pullback and then if I get the right opportunity, then I'll re-enter and look for the stock to move the rest of the way.

I originally bought this option for $1.13 and sold today for $1.48, for a $0.35 profit and a 30% ROI in 4 trading days.  Nice.

I now am officially 100% cash and NOTHING in the market.  This isn't a position I TRY to get into, it's just that the market has been going up and up without any pullbacks, so I haven't had any opportunities to trade this style.

However, we are getting close to many stocks that are about to have 2 closing days above a recent significant high - when this happens, I'll do some of my hi/lo style trading.

Also, I'm perfectly content just to sit out of the market and just wait for my EDGE.  I'm not going to chase anything and I want GREAT SETUPS - otherwise I'm not playing - and you can't make me!

AEP - finally took profit

Glory to GOD - another winner!

On Friday afternoon, July 1st, I played hookey from trading and all things business.  I thought the day was going to be a pullback, but instead the market just shot higher.  I could have taken profits on that day, because my target was hit.

So, then we come to Tuesday (yesterday) the next trading day and had another higher day.  As Murphy's Law was still in full force, I couldn't trade due to work commitments.

That left today, thank goodness it was still another decent day up.  I took profits today.  SHOULD have taken them on Friday, that was reckless, and although it paid off to my advantage today, in the long run that's a losing way to go.

Let's go to the numbers.  I originally bought this option for $1.15 and sold it today for $1.75, which gave me a $0.60 profit for an ROI% of 52% in 5 trading days.  Nice.

I'm down to just 1 trade right now.  So, I'm looking for new entries.  The market is just kinda taking a rest right now.  Once it starts moving in either direction, then I can take more action than just waiting.

WNR - target hit - profit taken

Glory to GOD - another profit!

This is just a great trade, got in the trade and the next trading day, the target is hit.  Doesn't get much better than that.

I bought the option for $1.92 and sold it today for $2.20 for a profit of $0.28 and an ROI% of 14%.

These ROI% and profit may seem small, but you must understand the numbers.  I trade a small account (for now - yes, it's growing, so someday I won't be able to say this), so I'm only buying 1-2 contracts at a time in order to keep my risk low and manage my portfolio in a safe way.  The last thing I want to do is load up on contracts and risk a large percentage of my account in any one trade - because the market CAN DO ANYTHING AT ANYTIME and I don't want to be "all in" and get clobbered.

These ROI% do apply to any account size, which is why I concentrate on ROI%.  If I had purchased 10 contracts instead of 1, then I would have still made 14% ROI, but my profit would have been $280.

Also, you have to trade based on edges and consistency.  Think of it like baseball, the BEST of the BEST get around 3 hits out of 10 times at bat - those hits include simple base hits - not all home runs.  

OR, you can think of it like a casino.  The casino makes a TON of money off their slot machines.  The slot machines only have roughly 3-7% edge over the player.  So, out of $100 played through the machine by a player, theoretically, the casino would make $3 - $7.  That doesn't sound much, but it works.  If you've ever been to, or seen video/pics, of Las Vegas you will understand that those little percentages/edges work VERY WELL.

DELL - target hit - better late than never

Thank you LORD for another profitable trade!

Here's the chart:

This trade took a looooooooong time to hit the target.  After the entry, there were a couple attempts at going higher and then a pullback and sideways trading until the last few weeks, then finally it got going higher again.

Better late than never, but when a trade takes this long to complete, it does hurt the ROI a bit due to theta.  However, it's a win, here's the numbers:

Sold the long option for $1.38, bought it originally back on May 9th for $1.21, for a profit of $0.17, with an ROI% of 14%.

Again, this isn't a bad trade, it's just a long trade - but that's why when trading this hi/lo system I like around 90 days until option expiration.  If I had bought an earlier option expiration date, I would have had a loss instead of a win.

WNR - back into this one

Deuteronomy 15:6 "For the LORD your God will bless you as he has promised, and you will lend to many nations, but will borrow from none."

Got back into WNR on Friday, here's the chart:

Along with AKS, this one is also based on the hi/low trading style.  A 2 day close above a significant high.  This will be a short move, just up to the next level of resistance and will look to take profit just below that level.

I got in at at noon and look where this trade closed:

It really rallied the rest of the day, going close to the next level.  If I was not playing hookey Friday afternoon, I most likely would have taken profits on this one again.

I bought the Sept 18 Call for $1.92.

HAVE A SAFE AND HAPPY INDEPENDENCE DAY!!!

DID I MENTION - SAFE??

AKS - new trade

Romans 8:28 "And we know that in all things God works for the good of those who love him, who have been called according to his purpose."

Got into AKS around noon on Friday, here's the chart:

This is an entry based on the hi/lo system.  I had a 2 day close above a significant high.  As you can see by the support/resistance lines, this stock's next level of resistance above is approx $17.  So I'll look to take profits just below that resistance.

I bought a September 16 Call for $1.13.

P.S. Don't forget to buy your firewroks

WRONG

I admit it - I was wrong.  

I thought we would see profit taking by the big money Friday afternoon.  This is what happens USUALLY.  However, the market has been anything but "usual" over the past couple of months.

I decided to put on a couple of trades around noon on Friday.  Again, USUALLY, there would have been a pullback - but there wasn't.

Here's a 5 minute chart of SPY for Friday:

As you can see from the chart above, there was a BIG buying jump early in the day, after that the market just kept going up and barely even tapered off at the end.

Let's look at the DOW's (via DIA) chart for Friday:

Again, even the DIA just kept going up - and notice it was on increased volume compared to the prior week!

So, the big money not only did NOT take profits, but they BOUGHT going into this long weekend.  To me, this is extremely bullish.

Looking over the last week, we should have a pullback at some point before continuing even higher.

As I mentioned earlier in this post, I put on 2 new trades around noon (which I will blog next), and then I took the rest of the day off.  However, since I played hookey I missed my exit on AEP.  And could have taken profits on DELL as well.  Oh well, you can't unscramble eggs.  I'll most likely be able to take profit on both of those next week.