Trading Journal Entry For 2-27-2014

It was an interesting day for the markets today, with the major US indices posting some solid gains by the closing bell. It was also a day of indices trading for us, one of our more favored trading strategies, when the right conditions exist. In the end it treated us alright, with some modest gains on the day at least. Better than modest losses right? But we should have done better. We made a risky “Double-Up” play where we probably shouldn’t have. Well, in hindsight we definitely shouldn’t have. Anyway, let’s take a look at a daily S&P500 Index chart, since that’s all we even traded on today.

daily s&p500 index chart for 2-27-2014

As you can see it was a mildly bumpy, but basically steady rise throughout the day for this, and the other major US indices. We did not get to any trading until about two hours before closing, or somewhere around the 2pm mark on the chart above. Just in time to ride through two distinct “waves” that presented themselves to us with almost no analysis work involved. Our first trade of the day was made just as fast as we could log into our Traderush account. We had opened up our TOS charting and the first chart we checked was the S&P. Just in time to see price breaking below a minor trend line (minor but still important on a short-run time scale).

nearing expiry of s&p500 futures trade 2-27-2014

We decided that the picture above was the best of the bunch for this trade because you can see here both what it was that got us into the trade, as well as how the trade ended up developing. We entered this trade just as soon as price dipped below that top trend line, and the decline rapidly accelerated immediately afterwards. A nice outcome indeed. We chose to use the S&P Futures contract in this case because it was offering a 3% higher return than the regular S&P500 index contracts. Every little bit helps.

Summary For S&P500 Futures Trade #1 – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 19:11 / 20:00
Investment: $100
Returns Offered: 73%
Entry Rate / Expiry Rate: 1851.875 / 1849.625
Returns Received: $173.00
Profit/Loss: $73.00 Profit

Unfortunately, we followed up this very nice trade with a very nice blunder. When price declines accelerated so quickly, and then even broker through that second, more major yellow trend line you see in the picture below, we took a big risk by entering into a “Double-Up” trade. This feature simply allows you to purchase a new, identical contract to the one you have open with the click of a single button (at the current entry price, of course, not the old one). But as you will see in the next image, it only very briefly dipped below that trendline, and almost just as rapidly regained the channel. And never dropped back below it. We jumped the gun too quickly, in other words. We should have waited for a follow-through bar, or stayed away from the trade entirely.

second s&p500 futures trade for 2-27-2014

Summary For S&P500 Futures #2 – “Double-Up” Put Option

Trade Outcome: OTM
Entry Time / Expiry:
 19:44 / 20:00
Investment: $100
Returns Offered: 73%
Entry Rate / Expiry Rate: 1847.875 / 1849.625
Returns Received: $0.00
Profit/Loss: -$100.00 Loss

With that mistake out-of-the-way, we quickly put it behind us and moved on to the next trade. Nor did we let it shake us off our trading plan using S&P500 futures. You can probably see from the charts below that as soon as we realized our mistake with the premature trendline break, we got right back into the trade, but this time on the other side of things. The call option side. Price really stuck to those trend lines for most of the day, and we had no reason to think that wouldn’t continue for the time being. And indeed it worked out fine. You can see that we were never even in the red at any point of the trade. Though interestingly enough, price did actually exactly touch our entry-level price, twice.

final s&p500 futures trade for 2-27-2014 binary options trading

Summary For S&P500 Futures Trade #3 – High/Low Call Option

Trade Outcome: ITM
Entry Time / Expiry:
 20:05 / 20:30
Investment: $100
Returns Offered: 73%
Entry Rate / Expiry Rate: 1850.375 / 1851.375
Returns Received: $173.00
Profit/Loss: $73.00 Profit

And that of course brings us to the day’s summary for the combined trades. As we mentioned in the opening, it was a mildly profitable day, and it could have been better. That double-up trade was just not well thought out or executed. It was an instinctive play we got into too quickly because we wanted to get in at as high a level as possible. But we recognize it for the mistake it was, and therefore it is one that will not be repeated any time soon. You learn as much or more from your mistakes as you do from your successes.

daily investments history and outcomes for 2-27-2014

Daily Investments History Totals For 2-27-2014

Trades Made: Three (3) Standard High/Low
Trade Outcomes:
Two (2) ITM + One (1) OTM
Total Investments: $300.00
Total Returns Received: $346.00
Total Daily Profit/Loss: +$46.00 Total Daily Profit
Daily ROI: +15.3% Daily ROI

Not a great day from an absolute perspective, but not too bad on a percentage basis, and definitely better than a loss. And after yesterday’s great gains, we can certainly live with a day of lesser gains. Trading tomorrow will be entirely dependent on market conditions. We will not be trading if we do not like conditions throughout the day. But either way we will, of course, be publishing our weekly roundup for this week’s trade summaries and profit/loss totals. So until next time folks, trade smart and be lucky!

Monday, 24th Trades | Tuesday, 25th Trades | Wednesday, 26th Trades

Binary Options Trading For 2-26-2014

Well, we saw something today that you definitely don’t see very often. An almost perfectly flat day for the S&P500 index. Flat enough that it doesn’t even register on a percentage basis rounded to up to four decimal places. The index recorded a gain of +0.04 points, or 0.00002% for the day. But it was another fairly wild ride in the getting there, as you can see. And while the indices may have finished flat for the day, our Traderush account balance sure didn’t. These were near perfect short-term trading conditions from our point of view, and we took full advantage of that while we could. We didn’t start trading until the last half of the day, but that worked out perfectly as we missed most of that long flat period in there, and then got in just in time to benefit from the steep afternoon declines.

S&P500 daily index chart for 2-26-2014

We logged on to our trading account at about 1 pm EST, and then spent the next 30-45 minutes on chart technical analysis using both the Traderush charts, and the ThinkOrSwim charting software. When we hit the USD/CHF currency pair chart, we simply couldn’t open our trading window and click the purchasing buttons fast enough. The setup just looked that good. There was no hesitation entering this trade, and the outcome was never really in doubt. A rare occurrence. Unfortunately, in our haste to get the trade executed we didn’t take a picture of the TOS chart and you can’t see anything in the small time window below. However, the chart we linked to for the USD/CHF currency pair shows everything quite clearly. The pair was all set for a rip-roaring run up, and it didn’t fail to deliver on that promise.

opening of usd/chf currency pair call option trade 2-26-2014

Summary For USD/CHF Currency Pair – High/Low Call Option

Trade Outcome: ITM
Entry Time / Expiry:
 17:18 / 17:30
Investment: $100
Returns Offered: 85%
Entry Rate / Expiry Rate: 0.89220 / 0.89224
Returns Received: $185.00
Profit/Loss: $85.00 Profit

The next trade of the day was made after returning to our charts, and going back to the S&P500 for a look at our earlier technical work on the daily chart. At this point there was fairly strong indications of an impending decline in prices, but of course exact timing of these things is next to impossible. Nevertheless we took our shot as the odds seemed favorable, and we like favorable odds. It ended up being a much closer outcome than we would have preferred, with price fluctuating in a tight range right around our entry price. Luckily, in the end it finished up on the “right” side of things, for another ITM trade.

near closing of our s&p500 futures trade for 2-26-2014

Summary For S&P Futures Trade – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 17:36 / 18:00
Investment: $100
Returns Offered: 73%
Entry Rate / Expiry Rate: 1849.625 / 1848.625
Returns Received: $173.00
Profit/Loss: $73.00 Profit

After those trades we took a break for an hour or so because markets went flat and we had other things to do. We kept an eye on things the whole time though and when those afternoon declines began, we were very quick to hop back on for the ride. The DOW Index happened to be the one we were watching on our TOS charts, so to save time that’s where we went straight to upon opening up our trading account. And below you can see in our TOS chart exactly what we were seeing, and why we got into this trade.

dow index thinkorswim chart with technical analysis for 2-26-2014 trade

We had been waiting for it or the S&P500 to break trend lines, and here it finally happened, and happened decisively too. The funny thing is we almost lost this trade anyway, because we didn’t know we had been logged out of our account and our trade wasn’t being executed. We didn’t get in at near the level we should have gotten in at. Luckily, declines were so steep for a while after this that it didn’t matter. In the image below you can see where the trade stood just seconds before expiry. We also superimposed the TOS chart so that you could better see exactly where we went from the opening shot. This was just a classic trend-line break setup. Although they aren’t usually this clean.

closingof dow index trade for 2-26-2014

Summary For DOW Index Trade – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 19:08 / 19:30
Investment: $100
Returns Offered: 70%
Entry Rate / Expiry Rate: 16199.48 / 16164.62
Returns Received: $170.00
Profit/Loss: $70.00 Profit

Lastly, we went back to our first love of the day, the USD/CHF currency pair. But this time the short-term technical picture was very different indeed. By this time the short-term rapid advances seen earlier were long-gone, and the larger trend of declines had resumed. Here again we have a nice picture of our ThinkOrSwim chart with trend lines drawn in. We entered our trade at the point where the pair broke under the bottom trend line, before popping back up just as fast. It never dropped back below trend before expiry of the trade. However, because the trend was both a declining, and a narrowing one, it was good enough for the ITM finish in the end.

opening of afternoon usd/chf put option trade for 2-26-2014

Summary For USD/CHF Currency Pair – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 19:34 / 20:00
Investment: $100
Returns Offered: 85%
Entry Rate / Expiry Rate: 0.89131 / 0.89104
Returns Received: $185.00
Profit/Loss: $85.00 Profit

That’s it! We didn’t end up making any trades in the last hour of US trading, and we’re glad we didn’t because they didn’t act as expected towards the end there. We finished out the day with a flawless win record of 4 for 4 so nothing to complain about there. It was a needed change from the last two days of boring markets and minor losses. Hopefully tomorrow will have some action to it as well. All four trades today were standard high/low options, and all were made for the same $100 investment. No 60-second or Custom options were traded.

Daily Investments History Totals For 2-26-2014

Trades Made: Four (4) Standard High/Low
Trade Outcomes:
 Four (4) ITM
Total Investments: $400.00
Total Returns Received: $713.00
Total Daily Profit/Loss: +$313.00 Total Daily Profit
Daily ROI: +78.25% Daily ROI – Very Nice!

daily traderush investments history for 2-26-2014

Today’s decent gains were able to easily erase the combined losses of the last two days, and bring us up into profitability for the week so far. As we mentioned yesterday though, we have no intention of trading any more “bad” markets this week, and if that means sitting out the day entirely, then that’s what we’ll do. We have been going against our own good advice to often lately, and trading without conviction and in unfavorable markets just for the sake of trading. Mostly so that we have something for our visitors each day. But you should do as we say, not as we do. Knowing when to walk away, and when to push your luck is critical to your overall profitability. So until next time folks, trade smart and be lucky!

Monday’s Trading | Tuesday’s Trading

Daily Trading Journal Entry For 2-25-2014

Broad market measures ended relatively flat for the day, but it was somewhat of a wild ride in the getting there. This market is a potential train wreck waiting to happen in our view, and as a result we have been and will be sticking to only short-run trades, of under one-day at most. Of course we have been wrong before, and although he wasn’t right about much else, economist John Maynard Keynes‘ famous quote that “the market can remain irrational longer than you can remain solvent” is spot on, unfortunately. Which is why, in the short-run at least, you must let price action be your guide, not your macroeconomic thesis. And with that thought in mind, let’s start this off with the usual daily chart of the S&P500 index.

daily chart of the s&p500 index for 2-25-2014

That little leg up, just in the last 20 minutes or so of trading, may have helped the indices erase a decent portion of their losses for the day, but it sure didn’t do us any favors. We were actually looking for the opposite action, accelerating price declines in the last minutes of the US trading day. We didn’t actually have any trades open for this period, so it hasn’t cost us any money, yet. What it did do is make tomorrow’s opening action much harder to predict. It muddled up the technical analysis picture quite a lot. We have really not been liking these markets of the last, oh roughly two weeks probably, and it looks like that may be set to continue. But on to today’s trades…

detail chart for google trade on 2-25-2014

We didn’t get to take many screenshots today, but we made too many trades to have shown them all anyway. We made a total of 7 trades today, with 6 being standard high/low, and 1 pair options contract. As usual we will summarise the outcomes at the end of the post for easy reference. But first the individual trades. We did get in one shot though, of our very first trade at least. That’s the shot you see above, of course, and was taken about halfway into that first trade of the day. Like the others after it, it was a standard high/low put contract, purchased on Google. And it’s looking good so far right? But with plenty of time left for things to wrong, how did things end up?

Trade Summary For Google High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 18:31 / 19:00
Investment: $100
Returns Offered: 70%
Entry Rate / Expiry Rate: 1221.365 / 1218.855
Returns Received: $170.00
Profit/Loss: $70.00 Profit

Trade Summary For S&P500 Trades – 2 High/Low Put Options

The next two trades, well, they didn’t go quite so well as the first, returning a whopping $20 combined! Ah well, such is the life of financial markets speculation. Frankly if we can get out of this week at break even, or at least very close then we’d be perfectly happy with that outcome in this market. And hope for more favorable conditions next week. We may in fact even end up taking the next few days off from trading just to see how things develop.

S&P500 Index Put Option Trade #1

Trade Outcome: OTM
Entry Time / Expiry:
 19:05 / 19:30
Investment: $100
Returns Offered: 73%
Refund Rate: 10%
Entry Rate / Expiry Rate: 1845.71 / 1847.28
Returns Received: $10.00
Profit/Loss: -$90.00 Loss

S&P500 Index Put Option Trade #2

Trade Outcome: OTM
Entry Time / Expiry:
 19:18 / 19:30
Investment: $100
Returns Offered: 73%
Refund Rate: 10%
Entry Rate / Expiry Rate: 1846.81 / 1847.28
Returns Received: $10.00
Profit/Loss: -$90.00 Loss

Trade Summary For FB  v. TWT Pair Options Trade

This trade was made on the Facebook v. Twitter pair options contract, and was purchased as a put option. In this context that just means that we were expecting Twitter to perform better than Facebook over our chosen time period of 30 minutes. However, our confidence level on this was not especially high, and as a result we made a cautious investment of only $50, instead of our standard $100. Too bad we weren’t more bold here, because this was one of our winners of the day.

Trade Outcome: ITM
Entry Time / Expiry:
 19:33 / 20:00
Investment: $50
Returns Offered: 70%
Entry Rate / Expiry Rate: 1.26698 / 1.26586
Returns Received: $85.00
Profit/Loss: $35.00 Profit

For the last three trades we are just going to record the summaries, without any commentary. This is because we don’t have any pictures, and didn’t take any notes on our reasoning today. We try to always do so, but we obviously don’t always succeed.

Trade Summary For CitiGroup High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 19:36 / 20:00
Investment: $100
Returns Offered: 70%
Entry Rate / Expiry Rate: 48.715 / 48.675
Returns Received: $170.00
Profit/Loss: $70.00 Profit

Trade Summary For Starbucks High/Low Call Option

Trade Outcome: OTM
Entry Time / Expiry:
 20:04 / 20:30
Investment: $100
Returns Offered: 75%
Refund Rate: None
Entry Rate / Expiry Rate: 70.995 / 70.675
Returns Received: $0.00
Profit/Loss: -$100.00 Loss

Last up for today is a couple of currency pair trades. One of which worked, and one of which did not. Unfortunately, the one that worked was for an investment of half the size of the one that didn’t work.

Trade Summary For USD/CAD – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 19:30 / 20:00
Investment: $50
Returns Offered: 70%
Entry Rate / Expiry Rate: 1.10844 / 1.10813
Returns Received: $85.00
Profit/Loss: $35.00 Profit

Trade Summary For EUR/USD – High/Low Call Option

Trade Outcome: OTM
Entry Time / Expiry:
 19:30 / 20:00
Investment: $100
Returns Offered: 81%
Refund Rate: None
Entry Rate / Expiry Rate: 1.37465 / 1.37419
Returns Received: $0.00
Profit/Loss: -$100.00 Loss

daily traderush investment history for 2-25-2014 journal

Which finally brings us to the day’s grand totals, whew. As we mentioned in the opening, we made a total of seven (7) trades today. Six (6) of them were standard high/low binary option contracts, and one (1) was a standard pair options contract. Out of the seven total trades, four finished ITM, and three finished OTM. Let’s take a look.

Daily Investments History Totals For 2-25-2014

Trades Made: Six (6) Standard High/Low + One (1) Pair Options Contract
Trade Outcomes:
 Four (4) ITM + Three (3) OTM
Total Investments: $600.00
Total Returns Received: $530.00
Total Daily Profit/Loss: -$70.00 Total Daily Loss
Daily ROI: -11.7% Total Daily ROI

Not actually as bad as it first appears. Not good, but it definitely could have been worse. We may or may not be actively trading the next few days, but we’ll keep you posted. It may just be a good idea to step back for a couple of days and be an outside observer. So until next time, trade smart and be lucky!

Monday, 24th Entry | Tuesday, 25th Entry