Trading Journal Entry For Friday 4-25-2014

Today’s pullback  makes three. Today’s action has confirmed Tuesday’s peak and marks the third time in as many weeks that the major US indices have made a run at the highs and failed. If I were of a bullish inclination that would certainly worry me. Luckily I am already bearishly inclined so that isn’t a problem. This is actually the first time that we have had the chance to trade and post to our trading journal in over a week due to some other priorities that must be addressed. We did, however, get in a little trading today so we may as well report on it. Although it wasn’t particularly impressive trading. Taking a look at the S&P500 index in the daily chart below we can see that it finished up well below that 1880 level which many technical analysts have been talking about and watching.

daily chart s&p500 index for 4-25-2014

 

For our trading today we kept it fairly light, making just two standard high/low trades, and one ladder option trade consisting of four separate contracts of $25 each. Both of the high/low trades were made on major US indices for an end-of-day expiry based on our fundamental views, rather than the current technical picture at the time of purchase. Unfortunately most of the day’s declines took place before we ever even started trading, so we were lucky to get a 1-and-1 split even rather than a total loss. Let’s take a look shall we?

s&p500 index trade for 4-25-2014

S&P500 Index Trade Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry: 18:09 / 20:00
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 1863.050 / 1862.840
Returns Received: $176.00
Profit/Loss:  +$76.00 Profit

dow index trade for 4-25-2014

DOW Index Trade Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry: 18:09 / 20:00
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 16352.60 / 16363.42
Returns Received: $0.00
Profit/Loss:  -$100.00 Loss

That amounts to some mild losses for those trades. The ladder option trade went somewhat better but as far as absolute profits earned it still doesn’t amount too much. Not even enough to offset the minimal standard trade losses. The trades below can actually be considered to be one single trade, with four separate contracts. Two are purchased above current price as “Below” contracts, and the other two are purchased above the current price as “Above” contracts. This is part of a simple ladder option strategy we have been working on developing for ourselves. Let’s look at the ladder option chart for oil at the time of our trade.

 

ladder options oil trades chart for 4-25-2014

Ladder Option Oil Trades Summary

Total Contracts Purchased: Four (4) * $25 Contracts
Ladder Trade Outcomes: Two (2) ITM + Two (2) TIE
Total Ladder Investments: $100.00
Total Returns Received: $114.07
Ladder Contracts Profit/Loss: +$14.07 Profit = +14.07% Net ROI

ladder option trade outcomes for 4-25-2014

Daily Investment Totals For 4/25/2014

Total Trades: Two (2) Standard High/Low + Four (4) Ladder Contract
Standard Trade Outcomes:
 One (1) ITM + One (1) OTM
Ladder Contract Outcomes: Two (2) ITM + Two (2) TIE
Total Investments: $300.00
Total Returns Received: $290.07
Total Daily Profit/Loss: -$9.93 Daily Loss
Daily ROI: -3.31% Daily Net ROI

Well, so it turns out that today was actually a very small loss instead of the very small gain we thought it was before adding it all up. Not that we can get too upset over a whopping ten bucks, but profits are always nicer of course. Unfortunately we can’t be sure when we will have more time to ourselves for trading and publishing of our trading journal, but it certainly won’t be daily for the next month or so anyway. We will try as often as we can though. So until next time folks, trade smart and be lucky!

Trading Journal Publication Break

Good afternoon everyone! We hope that these markets haven’t been treating you too harshly lately. We just wanted to post a brief update regarding why publication of our daily trading journal entries has stopped all of a sudden. Unfortunately, we are currently dealing with some severe problems related to our rankings in the various popular search engines. Because of that we have been forced to concentrate all our efforts towards finding out where the problem or problems lie, and then of course we must go about actually fixing those problems. Until we do that we would be writing to an audience of just a small handful. Which it is hard to motivate yourself to do. Nevertheless, we would still do it because those return visitors that track our trading journal deserve as much for their loyalty. However, it is simply a matter of not having the time available for now. Indeed, we have not even been doing any trading which we could report on.

30-day s&p500 index chart on 4-19-2014

We want you to know that we are working very hard on resolving this problem in a timely manner. We hope to be getting back to the business of helping our visitors become better and more profitable binary options traders as soon as possible. No matter what it takes to get there. Unfortunately, that will take some time. We expect that we will be taking a break from trading, and publishing the trading journal for at least the next few weeks. Hopefully our trading journal will be going full-steam ahead again by June at the latest, one way or another. Thank you for your loyalty and support everyone! We have very much appreciated the kind words we have received from so many of you over the last few days since we mostly disappeared from your search results. Thank you all!

We do remain open to your questions though, and will always try to answer all contacts in a timely fashion. So until next time folks, trade smart and be lucky!

Trading Journal Entry For 4-15-2014

It was another day of indecisive and inconclusive market movement for the major US indices today, unfortunately. We were certainly hoping that today would provide more clues as to the future than yesterday did (which is to say basically none at all). But alas, it was not to be. There is a substantial minority of technical analysts that were looking at the 1,840 level as an important ceiling to break, signaling a return to the bull market. And that level was in fact broken today. We, however, are not among that group and we remain in cautious mode until we see further supporting evidence. Because frankly, we’re of the opinion that it is correction time. The market has not had an “official” correction (10%+ decline from peak) in over 2 1/2 years! Nothing goes up forever, especially when you consider that the US, and indeed world economy is still pretty blah overall. Anyway, let’s take a look at today’s daily chart for the S&P500 index, our favorite broad market proxy.

daily s&p500 index chart for 4-15-2014

If you look at the chart above, most of our trading today was done between the 12 – 1 pm period on this time frame (EST). This was not by choice, but rather forced by an appointment we had. Thankfully it actually ended up working out rather well in the end. Really, we should say “luckily” it worked out well in the end. Because it truly was mostly luck in this case. As you can see in the chart above, that 1 pm point marked the lowest level of the day, and that’s also when our put contracts were expiring. Any time after that and we would have had across the board losers, instead of across the board winners. Let’s take a look.

s&p500 index call option trade for 4-15-2014

The first trade of the day (pictured above) kind of goes against much of what we have been talking about over the last week as a counter-trend trade. Not something which we usually recommend. However, for very short-term, purely technical plays it can be an acceptable risk in some cases. We felt that this was one of those cases. We purchased this call option as a very short-term bounce play, with an expiry of only 17 minutes from the time of purchase. It was the right play.

S&P500 Trade #1 Summary – High/Low Call Option

Trade Outcome: ITM
Entry Time / Expiry: 16:12 / 16:30
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 1821.850 / 1822.530
Returns Received: $176.00
Profit/Loss:  +$76.00 Profit

s&p500 index put option trade for 4-15-2014

These next two trades were opened even before the first one reached expiry, as we (incorrectly it turned out) believed that the index was turning back around to resume its downtrend of the last few hours. As we know from that daily S&P500 chart in the introduction, that is not at all what happened. But this “fake out” reversal did in fact last just long enough for our trades to finish ITM, and by a fairly “safe” margin too. This goes back to that 1 pm low point we touched on earlier. With an outcome like that it’s impossible to claim pure skill with any kind of straight face. Nobody is that good.

S&P500 Trade #2 Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry: 16:22 / 17:00
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 1821.150 / 1817.830
Returns Received: $176.00
Profit/Loss:  +$76.00 Profit

nasdaq index put option trade for 4-15-2014

Last up for the standard high/low trades for the day was basically just a “doubling down” on the other S&P500 index trade. In fact this contract on the NASDAQ index was purchased just seconds later, also at 16:22 system time. A play like this is only slightly different from just buying a $200 contract on the S&P. But it can also sometimes be an important “slight” difference. In this case it wouldn’t have mattered either way though, with the returns being exactly the same regardless.

NASDAQ Index Trade Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry: 16:22 / 17:00
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 3964.760 / 3948.970
Returns Received: $176.00
Profit/Loss:  +$76.00 Profit

ladder options oil trades chart 4-15-2014

Last up today we had a series of ladder option contracts purchased on oil. Four contracts to be precise. All on oil, all for the same expiry, and all purchased at the same time. You can actually consider all four contracts as making up one single trade. It was done as part of a strategy which we are working on developing for ladder options trading. It is actually a pretty simple strategy that other ladder option fans are probably independently using. But it has been working very well for us for the last couple weeks. Hopefully we’ll get a write-up done and published on this strategy soon, probably sometime this month if all goes well.

ladder option expired trades history 4-15-2014

Ladder Option Oil Trades Summary

Total Contracts Purchased: Four (4) * $25 Contracts
Ladder Trade Outcomes: Four (4) ITM
Total Ladder Investments: $100.00
Total Returns Received: $147.37
Ladder Contracts Profit/Loss: +$47.37 Profit = +47.37% Net ROI

daily standard trades investment history 4-15-2014

Daily Investment Totals For 4/15/2014

Total Trades Entered: Three (3) High/Low + Four (4) Ladder Contracts
High/Low Trade Outcomes:
 Three (3) ITM
Ladder Option Outcomes: Four (4) ITM
Total Investments: $400.00
Total Returns Received: $675.37
Total Daily Profit/Loss: +$275.37 Daily Profit
Daily ROI: +68.84% Daily Net ROI

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As you can see today’s trading resulted in a “perfect game” of seven ITM finishes, and not a one OTM finish. Can’t ask for much more than that. There was certainly a fair amount of luck in today’s outcome, but luck goes both ways in the long-run so you should be happy with the good when it comes. Since we took yesterday off from trading that makes today our opening for the week, so that’s a good start. But it will also be a very short week with US markets closed on Friday. See you all next time, and good luck out there!