2010

Just looking back at my comments over the year- well until the end of July actually.
I got back 'on the horse' for August, and obeyed my rules and had a profitable month.
What did I do in Sep? Yup- disobeyed the rules and ran my losses into Oct. Which meant taking big risks to claw back losses. The Dec trade was ok but had to be super cautious and had no rules left for the market action that found me in a possible loss making situation 2 weeks before expiry. I could have traded better but didn't like the risk/reward, and high cost of rolling up. Another awful year and it seems that is the case for many of the traders I used to know. We have been baffled by the excess money, and downright interference allowing certain 'elements' to claw back their losses at the expense of everyone else.
I'm bitter but not blinkered, and need to be on the same side of the trade as institution x.
All quiet this week and I have no trades yet for Jan expiry.
I've been trying to write a new type of manual, allied with a course for options trading and still seek some answers as to why it is hard to get the message across. Like Sudoku, options trading is about mindset, and helping people 'get it' is key.

No downside risk

Closed out my short put spread so I have upside risk above 5466, but with a few bizarre possibilities from planetary alignments to rubbish job numbers(even though they are fudged) to a global catastrophe or some nutcase with a bomb, I do not think it prudent to be long for now.
Having now seen most of 'Floored' the film about pit traders in chicago, I know I am not alone inbeing baffled by the market since mar 2009, but like some of them it's a case of adapt or die.
Well I'm still here.

Back on the horse + DOW

I'd closed out a while ago and now I'm back in the market- very modest size for now, but a vast amount of paper trading to confirm what I felt about my latest strategy- it should be robust enough not to lose money in the event of a 10% move within the options expiry cycle. I'm not going to reveal the strategy suffice to say several vendors offer this at $100 a month.
Still watching cable trades(profitable and simple) adapted from john Piper's PBW system which had an awful run with FTSE, but also very excited about real time forward testing of my own simple trading system for DOW.
Just recently it occurred to me that DOW moves outside US market hours on certain spread bet platforms, and while spreads are wide, the moves are often prescient, giving substantial gains from easy entries. Thursday a case in point- 210 ticks going long at 07:38 UK time.
The trade was at no point at risk of hitting its initial stop, but using a move of +15 to move the stop to break even, it was just a hold all day long.
How much is it worth to be able to place these trades knowing the worst case scenario is that you will lose nothing?
I challenge anyone to dispute my claims when I say this method can produce 200-300 ticks per week with max 10 trades.

Long? Wrong!

Well after my last post I am stunned that the market dropped so much, as reality and stockmarkets don't usually correlate.
I still remember Barclays announcing a profit of £533 million in either '91 or '92 and promptly announcing the sacking of thousands of staff-nice business.
Of course the markets have bounced back big stylee- all that lovely cash sitting in GS accounts allegedly, as our own banskters get their snouts in the trough too. It's the banks and the miners that move ftse, but I've always said buy BP if it goes under a fiver-didn't do it myself of course,and now a big bounce from 470 something to 520- 10% on a share is huge in my world of options.

A Week of torment

I closed out my neutral/mod bullish positions on tuesday as had been my plan going into the election and other big market movers, such as nonsense farm payrolls( which are as accurate as an 11th century clock).
I was not even at the screen on thursday when all hell broke loose but frankly I had no plans and no ideas about trading this week.
I have yet again traded dismally with cable 8 o'clock system which did rather well, if only I'd managed to trade it properly.
I think the markets will smash up in the next few weeks based on the alleged $2,900 billion in cash on the sidelines according to FT's the 'short view'.
So how to trade options when Vix is so high? Ideally one should be selling premium, but the safer route would be to buy spreads,and if one must sell naked, then have big protection or a plan like rolling into a condor.
Example- buy 10x 5500/5550 call spread sell 3 more 5550 calls. Market goes up big, sell 7 more 5550 calls to make it:
Long 10x5500, short 20x 5550, then buy 10x 5600, hopefully for no extra cost, reducing risk to zero.
I don't have option prices so this might be a bad strategy, but as we have dropped from 5833 to <5000 I think 5500 is a key level for the banksters who are still awash with other people's money.
All the above is for provoking thoughts, it is not advice-that costs ££££

CABLE system

Yet again the system worked- I took the trade but closed out for a small gain. I had decided some months ago that a 30 pip target is optimum and all this week -6 trades one break even, made 30, but 2 of them went on as runners to make another 150pips.
The way to trade this seems to be in 2 lots- take the initial 30, then leave the runner to be closed at ones discretion- and the chart should give a reason or 3 for closing out.
It's been a better week, a the gloom has lifted somewhat, now if only they'd put that silly debate of the big three in a desert island survival setting, I'd be interested.

Forex-too big to fiddle?

I don't know the answer to that but I suspect there is a lot less of the cartel type manipulation that goes on in the stockmarket(allegedly).
I have been gifted a system that works very well based on a breakout at 08:00 a.m. and have been following it for many months-so this morning's short was taken and closed out early, as I am still trying to build confidence in my own trading, but it is a classic example of the chart saying one thing and the market doing another. It is a reminder that when testing any system, we have to be honest about the failures and if the system is based on chart patterns we tend to have a bias(endowment theory) and look for the winners when we should be looking for the losers, which should be far outweighed by winners. It's a bit like peeling potatoes, you look for the bad bits.
Anyway, if my thoughts are reaching anyone, have a great day and remember I can now offer real help with debt-especially if it is a combination of personal and business debt.

Resurrection

Not sure who if anyone will be reading this, but after a revolting 12 months of trading where nothing has worked, I am slowly grinding towards being out of a losing position carried on from Feb.
I have been isolated from other traders for a while now as I felt it was mutually beneficial to have a break as we all seemed to be going nowhere. I now know why I have been going nowhere- bad trading and poor management of losses. I'm almost in a position to address this, so watch this space.
My other life- the saintly part that balances out the ying and yang has led me on another journey, and I am now a representative for an Insolvency Consultancy. I have been giving free debt advice of 5 years and have become disillusioned with the whole finance sector, but it seems there are as many cowboys claiming to be good for helping with debt, as there are gangsters on Wall street.
I now know how much money is being made off the backs of the poor, and it sickens me, so if anyone wants decent, real debt advice, I can help.