Monday, 4 March 2013

They Are Still Printing Money

Everyone is still printing money. Strangely Gold and Silver have had their day for the time being. Maybe I'll be able to buy back the Gold I sold at $880 and then watched the price go up.

Lot's happening in the markets again as the transition continues. The only constant is the methodology I use to make my trading decisions. I'm spending a lot less time in front of my screen and am using the daily timeframe with options more and more.

Here are a couple of charts that show the type of things possible. When you look at the chart, if you ignore the description on the top, the chart looks like any intra day chart even though it is daily. Instead of using the underlying, I use a vertical credit spread (VCS) so that my ROI is increased and I improve my edge by more than 66%. How is the edge improved? Well, the VCS means that I make money by both the directional move and the erosion of the sold option. My typical trade is a 15% profit on the margin I use. It's important how the trade is constructed using the variables of DTE (days to expiration) and the Deltas of the two option legs. I've set up a screener on MultiCharts and can follow lots of symbols and take the cream, trading as many opportunities per month that come up. Same analysis as intraday.

The book is going slowly but surely. I'm getting what is often called "scope creep" which means that what I have decided to cover in the book is increasing. As I cover something, it leads to something else that I think is important. And so it goes.

I'm skiing most mornings. We've had lots of people staying over here during the winter and that's been a welcome distraction. We're heading to Dubai in a while to have a look and then to the Italian Riviera as summer gets under way. I'm planning on getting a Microsoft Surface Pro as my travelling PC. I can connect it to TVs wherever I am with HDMI and get a big enough screen. My Samsung Note2 will allow me to tether to the Internet wherever I go.




19 comments:

  1. Hi EL,
    Does your MultiChart scanner can for conditions on the underlying or for conditions on the option (i.e., delta, DTE)?

    Thanks,
    Gary

    ReplyDelete
  2. Gary, on the underlying. I have to make the decision of what strikes and DTE's to use. That part is the art. The trade selection is mostly science and fairly mechanical.

    ReplyDelete
  3. jenrique42

    mi oportunidad de hoy, 04/03/2013

    - http://img10.imageshack.us/img10/3481/trade259.jpg

    - http://img194.imageshack.us/img194/4665/operativa03042013.jpg

    ReplyDelete
  4. jenrique42

    Today was a little less stressful than yesterday, I knew I would have to wait before taking the shot, and has been, I had to wait almost an hour before entering the market, between the red asterisk and fleche which my entry indicates

    - http://img802.imageshack.us/img802/648/trade260.jpg
    - http://img854.imageshack.us/img854/1679/operativa03052013.jpg

    the result expected, positive trade

    jenrique42

    hoy ha sido algo menos estresante que ayer, ya sabia que iba a tener que esperar antes de dar el tiro, y asi ha sido, he tenido que esperar casi una hora, antes de entrar al mercado, entre el asterisco rojo y la fleche que indica mi entrada

    - http://img802.imageshack.us/img802/648/trade260.jpg
    - http://img854.imageshack.us/img854/1679/operativa03052013.jpg

    el resultado el esperado, trade positivo

    ReplyDelete
  5. jenrique42

    I saw the opportunity but do not, for various circumstances, but there is

    - http://img542.imageshack.us/img542/8846/operativa03112013.jpg

    jenrique42

    la oportunidad que vi pero que no realice, por diversas circustancias, pero hay esta

    - http://img542.imageshack.us/img542/8846/operativa03112013.jpg

    ReplyDelete
  6. jenrique42

    after a couple of days seeing only the screens, today I found a loophole where they put me, and do my trade of the day

    - http://img163.imageshack.us/img163/5131/trade261.jpg

    - http://img46.imageshack.us/img46/1970/operativa03132013.jpg


    PD-green asterisk, is where I began to see the possibility of a long trade, and the arrow where I got long

    jenrique42

    despues de un par de dias viendo solamente las pantallas, hoy he encontrado un resquicio donde meterme, y hacer mi trade del dia

    - http://img163.imageshack.us/img163/5131/trade261.jpg

    - http://img46.imageshack.us/img46/1970/operativa03132013.jpg


    P.D.- el asterisco verde, es donde empece a ver la posibilidad de un trade largo, y la flecha donde me meti a largo

    ReplyDelete
  7. Glad to hear the book is progressing, even if slowly. Take care good sir.

    ReplyDelete
  8. JENRIQUE42

    MIS OPORTUNIDADES DE AYER, 15/03/2013
    1.- 1º TRADE; http://img716.imageshack.us/img716/216/trade262.jpg

    2.- 2º TRADE; http://img43.imageshack.us/img43/7715/trade263.jpg

    SU EVOLUCION POSTERIOR

    http://img853.imageshack.us/img853/9702/operativa03152013.jpg

    ReplyDelete
  9. Hi Tom,
    I think I have read the blog start to finish 4 times now over the past 2 years. What role does trading 3 contracts per trade entry play in your profitability? If you took the exact same entries and exits with one contract would you still be profitable at all?
    Thanks,
    Bill

    ReplyDelete
  10. Bill, you can be profitable with 1 contract. It's all in and all out. Multiple contracts give you a opportunity to create a more flexible money management plan be scaling out. Trading onc contrct means you could exit on a peak and re-enter on the trough until the trend is over.

    ReplyDelete
  11. jenrique42

    18/03/2013
    http://img546.imageshack.us/img546/908/trade264.jpg

    http://img202.imageshack.us/img202/8162/operativa03182013.jpg

    19/03/2013

    http://img831.imageshack.us/img831/130/trade265.jpg
    http://img10.imageshack.us/img10/1300/trade266.jpg

    http://img42.imageshack.us/img42/778/operativa03192013.jpg
    http://img837.imageshack.us/img837/1639/operativa03192013b.jpg


    los trades y su posterior evolucion

    ReplyDelete
  12. jenrique42

    Today my operative 22/03/2013

    - 1st trade is http://img803.imageshack.us/img803/705/trade267.jpg failed, but the idea was good, the area was ripe for a short but I got one last push

    - 2nd http://img42.imageshack.us/img42/9290/trade268.jpg trade is what must have happened in the first, but hey, the day ended neutral

    and its subsequent evolution http://img27.imageshack.us/img27/4322/operativa03222013.jpg

    jenrique42

    mi operativa de hoy 22/03/2013

    - 1º trade http://img803.imageshack.us/img803/705/trade267.jpg es fallido, pero la idea era buena, la zona era propicia para un corto pero le metieron un ultimo empujon

    - 2º trade http://img42.imageshack.us/img42/9290/trade268.jpg es lo que tenia que haber pasado en el primero, pero bueno, el dia acabo neutro

    y su evolucion posterior http://img27.imageshack.us/img27/4322/operativa03222013.jpg

    ReplyDelete
  13. jenrique42

    mi operativa de hoy


    http://img16.imageshack.us/img16/6388/trade269.jpg

    http://img841.imageshack.us/img841/6996/operativa03252013.jpg

    ReplyDelete
  14. jenrique42

    one thing for a couple of days I haunts the mind, in one of your post, tried to explain how, despite my putting, for example, shopping, market prices could go down as the opposite can also happen at that time he first gave too much importance and secondly I did not understand but now I would like to understand it, so I wish you'd come back to explain but now with a little more detail if possible, thanks

    jenrique42

    hay una cosa que desde hace un par de dias me ronda por la mente, en unos de tu post, intentaste explicar como a pesar de ir metiendo, por ejemplo, compras, el mercado podria ir bajando los precios, como tambien puede suceder lo contrario, en aquel entonces primero no le di demasiada importancia y en segundo lugar no lo entendi sin embargo ahora me gustaria entenderlo, por eso me gustaria que lo volvieses a explicar pero ahora con algo mas de detalle si es posible, gracias

    ReplyDelete
  15. My operational today, 02/04/2013

    1st trade. - Http://img843.imageshack.us/img843/6688/trade272.jpg
    2nd trade. - Http://img546.imageshack.us/img546/2767/trade273.jpg
    3rd trade. - Http://img39.imageshack.us/img39/8611/trade274.jpg
    4th trade. - Http://img843.imageshack.us/img843/6479/trade275.jpg

    Positive ALL

    and complete evolution
    http://img199.imageshack.us/img199/25/operativa04022013.jpg

    ReplyDelete
  16. jenrique42
    My operational today, 05/04/2013

    1st. - Trade http://img43.imageshack.us/img43/4020/trade277.jpg
    2nd trade http://img534.imageshack.us/img534/5438/trade278.jpg

    and its subsequent evolution
    http://img822.imageshack.us/img822/2155/operativa04052013.jpg

    PD-in this last graph are also several stars, are all trades that although e seen the setup, I have not done, but also were positive
    jenrique42
    mi operativa de hoy, 05/04/2013

    1º.- trade http://img43.imageshack.us/img43/4020/trade277.jpg
    2º trade http://img534.imageshack.us/img534/5438/trade278.jpg

    y su posterior evolucion
    http://img822.imageshack.us/img822/2155/operativa04052013.jpg

    P.D.- en este ultimo grafico hay tambien varias estrellas, son otros tantos trades que aunque e visto el setup, no lo he realizado, pero tambien fueron positivos

    ReplyDelete
  17. my operation today, 08/04/2013;

    1st trade. - Http://img577.imageshack.us/img577/3213/trade279.jpg
    2nd trade. - Http://img197.imageshack.us/img197/8806/trade280.jpg

    its subsequent evolution
    - http://img22.imageshack.us/img22/1809/operativa04082013.jpg

    ReplyDelete
  18. jenrique42

    http://img600.imageshack.us/img600/4513/trade281.jpg

    http://img812.imageshack.us/img812/5306/operativa04092013.jpg

    ReplyDelete
  19. jenrique42

    1º trade .- http://img163.imageshack.us/img163/2586/trade282.jpg

    2º trade .- http://img248.imageshack.us/img248/6161/trade283.jpg

    y su evolucion posterior
    http://img441.imageshack.us/img441/7417/operativa04102013.jpg

    ReplyDelete