For Directional traders

Rob on Business,

UGO MC is the option ticker. The stock is SGTL. My other trade is NUS XW and the stock is NUS. Both has hardly moved.
I still believe these two stocks will move to the downside as it is pretty much flat.
My reason being that both stocks are still below the 20 day moving average and is moving up and down very slightly. A break down is what I am counting on.
I'm down slightly on one and up slightly on the other. The next couple of days might answer the question.
 
Quote from smallfil:

Rob on Business,

UGO MC is the option ticker. The stock is SGTL. My other trade is NUS XW and the stock is NUS. Both has hardly moved.
I still believe these two stocks will move to the downside as it is pretty much flat.
My reason being that both stocks are still below the 20 day moving average and is moving up and down very slightly. A break down is what I am counting on.
I'm down slightly on one and up slightly on the other. The next couple of days might answer the question.
More...

Ever since CNMS2 mentioned volatility (and I thought it was primarily volume) I noticed that the trades you guys have mostly been doing have been flat to start with - that is, the underlyings been moving very little, with the Bolinger Bands narrow, indicating little price movement - and it dawned on me that this is what must be meant by low volatility, something that would indeed diminish option prices since the risk of the underlying moving further from the strike price is lower than if the stock was fluctuating more, making it a more advantageous time and price to buy options. I can see that now. What really piques my interest now is how you determine what direction the stock is going to breakout to? When the stock is below the BB's 20EMA, for instance - a guideline I often use, how does one know that the stock is done its low profile and ready for a rise, or conversely, still under a bearish influence and ready for some more bottom feeding? In the case of RIMM a couple of months back, I think it was Optionpro007 or Beaver that said he was ready to reap on an upswing after a low flat stretch, as is Multi on the "My Options Play" thread with APA. RIMM did swing up handsomely, as did some other successful plays by the other guys on this thread, including Multi's PEET, yet APA is down as was BBY, and you're expecting yours to go down as well - what determines that expectation? The only thing I have been able to expect is to anticipate a tanking after a peaking, and a rise after a bottom - if the overall trend is bullish. That's why I've only been playing GOOG and the energy stocks ECA and SWN before Oct.3 - I knew the overall sentiment was bullish and the fundamentals were good. Incidently, my system totally failed today as I had to get rid of DIA and DNA puts that ended up moving against expectations after a 4 day flat.
 
Rob on Business,

I am sure each trader has his own approach or style to trading. Whether it is stocks or options, each person would have an approach to trading. Before I seriously studied charts, I had no clue to how to use them and analyze them.
All these seminars, dvds and books has enhanced my knowledge.
My impression is you are guessing as to direction of your trade.
In my opinion, that is a serious mistake.
I try to determine direction first based on the charts then, I choose what I feel is the correct option price and time period.
Despite all the analysis, you can still be wrong!!! Other times, you have to be patient for the stock to move its course. One of my main mistakes is exiting a trade too soon if it turns negative.
From my trading journal, I can see that a lot of times, patience pays off and a winning trade botched because I did not have the patience to wait. Other times, you get a gift like my last trade on IRF MG which dropped $6 in one day and my option rose from $2.65 (my cost) to $8.20 in one day!!! That move took just 10 days. Most of my trades move in about 1 1/2-2 months. I am still on the studying phase as I seek to minimize my mistakes and also enhance the accuracy of the entry of my trades.
 
Rob on Business,

Comment on APA. I looked at the chart of this the other day and got a bullish signal and frankly thought it was going up. It has since, reversed course and given a bearish signal. Coupled with it being below the 20 day moving average (bearish signal) so, I would in my opinion go short or buy some puts on APA at this time.
 
Quote from smallfil:

Rob on Business,

Comment on APA. I looked at the chart of this the other day and got a bullish signal and frankly thought it was going up. It has since, reversed course and given a bearish signal. Coupled with it being below the 20 day moving average (bearish signal) so, I would in my opinion go short or buy some puts on APA at this time.
More...

You say I give you the impression I'm guessing my directions (and that may very well be, compared to your methods), but the last few posts on the "My Options Play" thread between CNMS2, ICEMAN1 and THENEWGUY, including your last one, are referring to what best option positions to take on the UNCERTAIN direction that APA and VLO are going to take, given that they both have been mentioned to be going opposite to expectations. What I mean is, I'm trying to get some input on what makes you guys decide what direction a stock is going to take - because you don't seem to discuss that process between yourselves, only the option calculations. From where I am, it looks like you collectively are as uncertain as I am about where things are going after a move has proven wrong, yet more than one of you have said I need to learn more stuff. And I agree, I DO need to learn more - I'm just trying to glean some from chatting with you all, besides just the options calculations.

Do you know if the U.S. markets are open tomorrow - Veteran's Day?
Thanks.
 
Yes...

Quote from Rob on Business:

You say I give you the impression I'm guessing my directions (and that may very well be, compared to your methods), but the last few posts on the "My Options Play" thread between CNMS2, ICEMAN1 and THENEWGUY, including your last one, are referring to what best option positions to take on the UNCERTAIN direction that APA and VLO are going to take, given that they both have been mentioned to be going opposite to expectations. What I mean is, I'm trying to get some input on what makes you guys decide what direction a stock is going to take - because you don't seem to discuss that process between yourselves, only the option calculations. From where I am, it looks like you collectively are as uncertain as I am about where things are going after a move has proven wrong, yet more than one of you have said I need to learn more stuff. And I agree, I DO need to learn more - I'm just trying to glean some from chatting with you all, besides just the options calculations.

Do you know if the U.S. markets are open tomorrow - Veteran's Day?
Thanks.
More...
 
Rob on Business,

In answer to your question, I use technical indicators to tell me where a stock or option is headed. This is not 100% but, per my experience is probably 80% accurate.
In the case of APA, the technical indicators (moving average, stochastics, MACD) has given a bearish signal. That being the case, if I am in a trade and am convinced that I am wrong----I will get out and go the opposite way!!! I did this with the QQQQ. Bought calls originally but, when I determined that the QQQQ was going down, I sold my calls and bought puts to go the opposite way!!! The puts turned profitable as expected. If my analysis proves to be false, I would not be hard headed and stick to my trade. That would be foolish.
We have to take what the market gives us and adjust to the market. The market is not going to adjust for us!!!
 
SMALLFIL -

Thanks - that was great - I also use those indicators, but probably not as knowlegeably as you. I find different stocks respond better to different indicators, by looking at how they've responded to backtesting. Certain stocks can be said to be bullish as long as they stay above a say, 20EMA, and bullish if they dip below it - at certain periods that is. The way I've been told to read slow Stochs is be ready to be bearish when above 80 and peaking, and bullish when above 20 and rising. I actually try to look for a reversal in the underlying at or after those points. I find the MACD slow in indicating a trigger point, for the stocks I've been playing. I like the Bolinger Bands - showing volatility and acting also like MA's. One can say of some stocks to reverse position when touching either line or breaking out of either line. I watch volume for strength of a trend.

Both your pos'ns rest below the BB 20EMA line - bearish for those stocks, and the band narrowing is nice and thin - low volatility (good option pricing?) - my MACD is also low and slow Stoch shows ready for some rise for NUS and fall for SGTL. I notice Stoch doesn't stay low for any stretch on both stocks, suggesting a bottom on the indicator precedes a rise in the underlying. Interesting play - we'll have to see! I use Big Charts interactive charting and Market Watch's streaming charts intraday. I would like to find charting that would allow me to see any stretch of historical intraday I choose, rather than have to see everything from this point backward.

Happy Trades...
 
You must log in or register to reply here.
Back
Top