Trading Journal Entry For 2/14/2014

We took the day off from our trading journal yesterday. Partly because of other responsibilities, and party because we really didn’t like the market conditions that much anyway. Today, on the other hand, was a fairly high-volume day for us with seven (7) short-term high/low trades expiring on the same day, and one (1) long-term trade with an expiry a week out, the 21st of February. We also kept things simple today with all seven short-term trades being made for an even $100. Obviously we can’t fully report on the long-term trade until it expires next Friday, but we will introduce it and then update this post as soon as we know the outcome. So, let’s get to those trades which did get closed out today.

sp500 future contract trade for 2/14/2014 journal entry

The first trade we opened today was actually that long-term trade. It was also the only trade made today that was based on anything other than charting technical analysis. We have been mostly staying away from indices trading because markets are not currently behaving as we would expect them to and we don’t like to “trade against ourselves” by taking on positions we find no logical support for. It is better to sit it out and wait for either markets to come into line with our investment thesis, or for our investment thesis to change with the evidence (we’re not emotionally attached to our analysis, and neither should you be). On the longer time horizon of a full week till expiry there is a much greater chance for fundamental factors to come into play and overpower the random noise. So, we purchased an S&P500 Future for $277, with an expiry of 2/21, and offering a return of 75%. We will post the results of this trade as soon as they are in.

chart for opening of aud/chf trade for 2/14/2014

Now we can talk about the trades which are actually finished. It started with an asset which we hardly ever trade in, the AUD/CHF currency pair. Trade the markets you know best is always our advice and it is advice we try to follow ourselves. No trading “rule” should be set in stone though. Flexibility is good, to a certain extent. We entered this trade at 17:15, just 15 minutes prior to its expiry at 17:30. It was a $100 trade with a 70% return for a profit of $70 on the trade. A good start to the day. But plenty of time yet for things to go horribly wrong.

chart for our DOW index binary options trade on 2/14/2014

Next up was a play on the DOW index, despite our misgivings about doing any short-run index trading right now. And, as usually happens when we don’t follow our own (very good) advice, we lost. The chart setup just called out to us, but we still should have stuck to our plan and stayed away from the indices for short-term trades. Instead, at 17:46 we purchased a $100 DOW call option with an expiry of 18:00, and offering a refund rate of 10%. So at least we got $10 back on this loser, for a $90 net loss on the trade.

optionpro chart of our citigroup/JPM trade on 2/14/2014

We’re going to go “out-of-order” at this point and jump to our last trade of the day, which happens to be our only other loser besides the DOW play. This trade was made using a Traderush pair options contract. We like pair options trading but we cannot say it has ever been one of our most profitable asset classes. You can’t see it in the image above due to the short time window shown but it was right at a significant support level going back several days at least. We felt that there was a reasonable enough chance of a rebound higher to be worth a $100 shot at least. And it was a close trade throughout the life of the contract, fluctuating right around our entry point the entire time, and finally finishing just barely on the OTM side of things. This trade was also offering a 10% refund rate though so once again, we post a $90 net loss for the trade.

mid-way into the aud/usd trade for our 2/14 trading journal entry

Next up is our AUD/USD trade. Now this is both an underlying asset which we prefer to trade, and a very nice technical setup to boot. A trade which we actually felt very confident in for the first time today. We felt OK about the other trades mentioned so far, but not great. This one we went into with some conviction. Nevertheless, we kept our trade to $100, purchasing a put contract at 18:41 with an expiry at 18:45, and offering a return rate of 71%. That very short time window is the main reason we kept the trade size modest despite our confidence in a declining price. Random noise can easily kill a trade of that short duration. Luckily for us, it didn’t do any such thing this time. We finished up well into-the-money and received a return of $171, a profit of $71 for the trade.

charts for oil, silver, and wheat trades on 2/14/2014

As you can see in the image above, we are going to present the last three trades of the day as something of a “package” deal because that is how they were made. And also for the sake of keeping this post to something less than novel length. All three trades were opened within a five-minute window, on three different assets, but for the same $100 investment. These trades were on wheat futures, silver, and oil. All commodity plays as you can see. Totally different market environment from the US indices, and more favorable to our trading style and current investment thesis. All three trades were also based entirely on technical analysis factors taken from charting analysis using the advanced ThinkOrSwim charting software (which you should also be using for any serious analysis and for your longer-term trades). We just cycled through some charts for our favorite assets and these three just looked really darn good.

To sum up the trades we invested a total of $300 on the contracts, and all three were offering the same payout rate of 70%. This makes for a dollar return of $510, which is a profit of $210 on the combined trades. Not a bad finishing stretch. And that brings us to today’s total investments history.

investments history for 2/14/2014 binary options trading journalIt was a pretty good day overall, which we needed after the beating we took Wednesday. I believe it also brings us back up into profitability for the week as well. But that is for tomorrows weekly roundup post. The totals for today (excluding the still open long-term S&P500 trade of course) are as follows.

  • 7 trades were made, with 5 finishing ITM, and 2 finishing OTM
  • We invested a total of $700 on the combined trades, and received returns totaling $871
  • A profit of $171.00
  • Which is a 24.4% daily ROI

That’s a great day on a percentage basis, and also helps out our weekly numbers a fair bit. Stay tuned for those numbers in tomorrow’s post! Until next time, trade smart and be lucky folks!

Monday’s Trades | Tuesday’s Trades | Wednesday’s Trades | No Thurs. Trades

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