"The only way to trade with Fibonaccis" journal

Quote from Took2Summit:

Was nothing special about the $6,000. I just saw a pretty decent upwards wedge forming, as I stated in my journal I saw more upside then downside. I really do like your idea of having hedges with the ability to close them out for profits during short term corrections like we are in right now. That said, I think I would have a more defined strategy of closing them out. You and I obviously both believe the market is heading higher, and we are both unsure as to when or how much. Since we both believe that, it could make sense to take profits on the hedge when it's even up only $1,000 or whatever.

Basically, this probably sounds like a pretty useless post. And it probably is. Do you, or are you planning on, having any more of a business plan for the hedge in the future?

EDIT: The other reason too is you had earlier mentioned you wish you closed the hedge when it was +5,000 and then it was only up like 4,000 and you missed the opportunity and then it was up 6,000, which is the main reason I brought it up in the first place.
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Oh :)

There are a few ways I tend to manage the hedge depending on how I am feeling. I know I keep saying this but I am going to explain it more in depth in the future.

Sometimes the hedge won't always work out. You put it on and price immediately goes against it until you close your main position. This is no big deal, it's just what happens sometimes. Position sizing is important.
 
9/1:

SPY -$14,820.00
hedge $2,612.76

Net for this trade

-$12,207.24 (unrealized)
$1,223.60 (realized)
$2,931.69 (realized)
$1,129.72 (dividend)
------------------------
-$6,922.23
 
9/2

SPY -$32,433.00
hedge $3,938.25

Net for this trade

-$28,494.75 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$23,209.74

Are we going back down? Good thing I didn't close out the hedge yesterday. lol.

Next update will be on Tuesday since the market is closed on Monday.
 
9/6

SPY -$37,335.00
hedge $4,278.42

Net for this trade

-$33,056.58 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$27,771.57
 
9/7:

SPY -$18,525.00
hedge $2,800.44

Net for this trade

-$15,724.56 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$10,439.55


back and forth
 
Hi abc,
I threw together a quick chart to get a grip on the trade management. Are you sizing your hedge around a % fractional bet? Obviously I had to make a lot of assumptions on this data. Could you elaborate on the pieces regarding the sizing.
thanks.
 

Attachments

9/8

SPY -$25,650.00
hedge $3,340.02
Net for this trade
-$22,309.98 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$17,024.97



trackstar, nice chart. I'm in a hurry now (hence why this post is late today) but I'll talk about that soon.
 
9/9

SPY -$43,434.00
hedge $4,712.43

Net for this trade

-$38,721.57 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$33,436.56
 
The next div date is Friday, 9/16.

The average SPY dividend this year so far has been $0.59. If that is the value of the next dividend then I will get a payment of $3,363 to be added to the net total of this trade.
 
SPY -$39,159.00
hedge $4,325.34

Net for this trade :

+-$34,833.66 (unrealized)
+$1,223.60 (realized)
+$2,931.69 (realized)
+$1,129.72 (dividend)
------------------------
-$29,548.65
 
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