Let's Take a Test Drive by Pay$ense

Covered calls anyone? Yeah you IRA investors. I said I manage a total of (6) trading systems and cannot let you not know what I will be trading in them.

This year my low risk approach is up 25%. It does not profit from downtrends, however the phrase "cash is king" has applied.

Take a look at the performance graph and see that most of the year traded FLAT (fully into cash).

Recently, I have "dipped" into (2) positions. Perhaps I can post a third today. These will produce about 10% per month - if we are in an uptrend.

I do not want to hold growth stocks through corrections and stop them out with a decline. You may have experienced a stock that has fallen into the abyss never to return (dead money)?

So I'll look at a few (STP, YGE, EXM, MNTA) and pick one. Solar stocks are again showing strength today (YGE).p$
 

Attachments

Hello WILD Bill. I'm glad you have taken a peek at the thread.

I didn't notice you bearish call yesterday, otherwise I may have had a much better time of it!p$

:confused:
 
1:25 pm EST

Thus far here is today's take:

Ho-hum. Not willing to trade any of this precarious low volume chop. At any point in time it can go any way (based on my pure PA analysis, infantile I admit).

Traders are back from lunch and more ho-hum. Where is the conviction, man! Just taking cues from how the big money flows.

Let's see what happens going into the close (if we don't get a hedge fund redemption dump before that!)

pay$
 
I take that back. Head-and-Shoulders pattern:

STO 3EMD @ 511.8
STOP 512.8

Profit target: ?

Also

STO 2NQ @ 1218.75
STOP 1225.75

Profit target?
 
BTO 2EMD @ 513.40
STOP 511.40

Profit target: ?

This was 3rd trade and was STOPPED.

Told you I suck at day-trading.

Anyway, analysis - (see above regarding not wanting to trade this day, yet LOL)

Now what?

Well, indexes although pulling lower (looking a LOT like yesterday's action) have not yet traded through the ES, YM or NQ BD (break down) levels.

We shall see.

Psychology: I wanna recoup the $840 loss. . .but actually need to re-evaluate what this weakness means for my "swing" (still open) positions.

:mad:
 
In lower-margin account LONG 1TFS is was hedged with SHORT 2NQ and I had closed 1NQ earlier at a higher level :eek:.

I added it back at the lower level.

Hedged well enough for the plummet!

I had previously closed LONG 2NQ in higher-margin account and replaced it with 1YM LONG.

With the market tanking. . .STO 1NQ to have somewhat hedged!

pay$

These accounts are fine - I just do not like to give back playing with a day-trade.

Anyway, we'll see if the market can retain it's bullish bias and perhaps add the CC (covered call) position (trade) as we watch things into the close.

Hmmmphh!!!
 
Just to clarify above haphazard trades. . .

Closed SHORT 2NQ trade for $70 profit.
Closed (1) SHORT 3EMD trades for $300 total loss
Closed (1) SHORT 3EMD trades for $210 total loss
Closed LONG 2EMD trade for $400 loss.

$860 total loss

With first 3EMD trade (at the time) the loss was minimal. When I tried to change the STOP to market it had already been filled.

Then while typing this I entered and closed a second SHORT 3EMD trade.

I thought I entered my SHORT trade(s) too late, when the market didn't move quick enough in my direction. Translation: "See ya later!"

I closed the second 3EMD trade out (which at the time had a small loss) using a market order. Translation: "oops, market moved and loss jumped to $210.

So I tried LONG 2EMD with 2 point STOP.

:eek:

Edit: Market is now moving in my direction.

STOPPED! (then proceeded to move sharply lower).

Like I said I do not use all the tools most of you use and so keep these day-trade gains and losses relatively small (I know I shouldn't be playing around as small losses do add up).

BTW: It did turn out to be a good trade - had I held for the minor uptick! The market did drop very nicely right after that. Oh well.

Summary:
The first two I said - I'm outa here (didn't move quick enuf) - but got dinged using a market order. Then I reversed and it hit my stop (reaction trade in an already known flippant day).

Minor move in my $75k account. <b>Have to stay on point, though: capture the major "swing" or MACRO trend from the indexes.</b>p$
 
Despite the drops (which was the case early, yesterday) the indexes have yet to cross over into BD (break-down) zone.

"We shall see".

pay$
 
Further analysis of trades:

$860 loss could have been just $230 ($300 STOPPED loss and $70 gain) or even VERY profitable had I set my STOP more accurately and went with my conviction of the head-and-shoulder pattern.

Once it broke lower - 6 points on 3 contracts is $1,800. So r/r was correct.

Extra (2) trades made things even worse. Lesson: live and learn.

Better yet, had no losses had I heeded that this was not a good day for this!

As we speak the market is still undecided with one hour left until the close.p$

With the bounce I added 1NQ SHORT to now hedge w/2NQ, the LONG 1ES contract in the higher-margin account.

Translation: This market is going to <i>have</i> to prove itself to me!

FYI: buying looks to have perked up once the SPX bounced off the low: pulled off SHORT 1NQ in higher-margin account. Looking to do the same in lower-margin account with a small retracement.

Translation: I didn't get it and indexes keep moving up so did it (closed) anyway;)

Do we now have the right exposure? Do I dare add another CC trade? Hey, there is no gain without risk!

Translation: either way I will be fine, since gains are much larger than losses - which I (try to) keep tight.


:cool:
 
Here is a covered call trade.

Wednesday, December 10, 2008
3:25 pm EST

Bought 500 shares of YGE (Yingli Green Energy Holding Co. Ltd.) at $5.00 (ask).

Sold (5) YGE Dec 5 (YGELA) call option contracts at $0.50 (bid).

Stop Loss: $4.50

Usually when these don't get stopped market uptrend has legs.
 
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