After feeling good about my successful trade, dipped my tows in the water some more, buying some qqqq calls and a goog call. All were stopped out, which may be a symptom of my newfound interest in tight risk-management. In the meantime, I've gone back to completing once-and-for-all my analysis of my prior trades.
Also, a seasoned pro acknowledges that it's tough out there here:
http://hardrightedge.com/dor.htm
Thursday, March 26, 2009
Sunday, March 22, 2009
Made money on those calls from last week
In the interest of transparency, I'd like to post the actual results of my trade from last week. Here it is.
BOUGHT WED 18-MAR-09 ORCL MAR CALL $18 STRIKE 2@ 0.05 ($ 5) + 3.00 comission = $13.00
SOLD THUR 19-MAR-09 ORCL MAR CALL $18 STRIKE 2@ 0.15 ($15) - 3.00 comission = $27.00
The good news is that I more than doubled my money. I risked $13 (the entire cost of the options), and I ended up with $27 after ORCL reported good earnings after hours, and the stock popped up overnight. To bad I didn't have like 5k in this trade.
The bad news? Well, this is really bad. In this particular account, this was the last $13 I had in my account. I risked 100% of my account because it was toasted anyway. The account started off at 2k. There is something psychological about not going to actual $0.00 from money that started off at 2k. I realize I will have to fund this account again - I am not under the illusion that I can trade my way back to 2k.
The other piece of good news is that I've been reviewing my trades. There is so much to report that I've been delaying doing a post. But to preview the bottom line, it comes down to this: avoiding the fear of taking a loss, and proper money management. What I've discovered is that I am not a horrible trader. In fact most of the issues I ran into came in the September - October timeframe when things tanked at a speed not seen in 80 years, and fighting the trend (going long) cost me dearly. A few big out-of-control losses will quickly ruin an otherwise decent trading account. If I had only been able to cut off a few medium sized losses before they became big losses, I would have been fine. From now on I am going to have one rule above all rules: decide in advance how much you are willing to lose (maximum), stick to that, don't move or take out your stop - and live with it. Even expect a lost, so that your positively surprised if you actually win. Controlling your loses seems to me to be my biggest problem and the biggest killer of my accounts. More details to follow.
BOUGHT WED 18-MAR-09 ORCL MAR CALL $18 STRIKE 2@ 0.05 ($ 5) + 3.00 comission = $13.00
SOLD THUR 19-MAR-09 ORCL MAR CALL $18 STRIKE 2@ 0.15 ($15) - 3.00 comission = $27.00
The good news is that I more than doubled my money. I risked $13 (the entire cost of the options), and I ended up with $27 after ORCL reported good earnings after hours, and the stock popped up overnight. To bad I didn't have like 5k in this trade.
The bad news? Well, this is really bad. In this particular account, this was the last $13 I had in my account. I risked 100% of my account because it was toasted anyway. The account started off at 2k. There is something psychological about not going to actual $0.00 from money that started off at 2k. I realize I will have to fund this account again - I am not under the illusion that I can trade my way back to 2k.
The other piece of good news is that I've been reviewing my trades. There is so much to report that I've been delaying doing a post. But to preview the bottom line, it comes down to this: avoiding the fear of taking a loss, and proper money management. What I've discovered is that I am not a horrible trader. In fact most of the issues I ran into came in the September - October timeframe when things tanked at a speed not seen in 80 years, and fighting the trend (going long) cost me dearly. A few big out-of-control losses will quickly ruin an otherwise decent trading account. If I had only been able to cut off a few medium sized losses before they became big losses, I would have been fine. From now on I am going to have one rule above all rules: decide in advance how much you are willing to lose (maximum), stick to that, don't move or take out your stop - and live with it. Even expect a lost, so that your positively surprised if you actually win. Controlling your loses seems to me to be my biggest problem and the biggest killer of my accounts. More details to follow.
Thursday, March 19, 2009
Bought some calls
Bought 2 out of the money ORCL 18 March calls late Wednesday for .05 ($5) each + $3.00 in commissions , making a $13.00 bet that ORCL will release good earnings. So far so good in after hours. Unfortunately I could only affor the 18 calls so I'll most likely be able to make back what I paid, but we'll see how much I net. At the same time the Fed announced a huge treasury buying plan that stimulated a closing rally. Let's see if there will be some follow through and the market can break through a lot of its overhead resistance. Triple witching is coming Friday so we'll see what happens. The more I learn the less I try to to predict what could happen, and only try to control my risk level.
Thursday, March 12, 2009
Sucker's Bounce or the Big Bottom?
Nobody knows. Place your bets. The media is going all ga-ga over the 3 day rally. But we are hitting major resistance on the charts tommorow, and it is Friday the 13th. We shall see.
Monday, March 9, 2009
Nationalization or Dow 4000
It's funny - I haven't posted for a while and the "have we bottomed" post is still relevant. By the way.. the site I pointed to was a joke - it doesn't use artificial intelligence! Heck - no one knows when we will bottom - a bell won't magically ring. Traders are waiting for capitulation and it seems we just have apathy.
I think there is a reason though, why there is no bottom in sight. I have a theory that there are very powerful people, either bankers, friends of banker, and/or head of foreign states, that have too much to lose if the Citibank and Bank of America, our two toxic banks, are nationalized. A very intelligent person who has a background in finance told me today what amounts to the same thing - in order to protect the wealthy, the American taxpayer is going to have to pay 3x what it would normally cost before we heal. However in the process we all have to be boiled slowly like a crab being cooked. At some point even the wealthy and/or the government will realize this is all so bad that we have no choice but to nationalize the banks before the entire financial system goes to hell. At that point the damage will have been done. I hope to goodness I am wrong. The sooner this gets over with, the better.
I've been studying my trades and I have some preliminary findings. Will get back to regular posts on trading soon. In the end, the system is all rigged against individual traders, so the key thing is what rules & system can I put in place for myself to protect against loses, preserve capital, and make a few bucks along the way.
I think there is a reason though, why there is no bottom in sight. I have a theory that there are very powerful people, either bankers, friends of banker, and/or head of foreign states, that have too much to lose if the Citibank and Bank of America, our two toxic banks, are nationalized. A very intelligent person who has a background in finance told me today what amounts to the same thing - in order to protect the wealthy, the American taxpayer is going to have to pay 3x what it would normally cost before we heal. However in the process we all have to be boiled slowly like a crab being cooked. At some point even the wealthy and/or the government will realize this is all so bad that we have no choice but to nationalize the banks before the entire financial system goes to hell. At that point the damage will have been done. I hope to goodness I am wrong. The sooner this gets over with, the better.
I've been studying my trades and I have some preliminary findings. Will get back to regular posts on trading soon. In the end, the system is all rigged against individual traders, so the key thing is what rules & system can I put in place for myself to protect against loses, preserve capital, and make a few bucks along the way.
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