Trading Journal Entry For 2/6/2014

Well, we finally had a less than perfect day. They can’t all be winners, unfortunately. The goal is simply to minimize your losses on those losing days, while maximizing gains on your winning days. Of course that is easier said than done, but it is also what differentiates the profitable traders from the not so profitable ones. But this isn’t a strategy article so we better get down to business eh?

Today we only made two trades and then called it a day, despite the fact that US markets are still open even as we write this. We just weren’t feeling it today and none of our favorite asset charts were really speaking to us (we use TDAmeritrade’s free T.O.S. software for our binary options charting and analysis. And we recommend our readers do as well). We are not gamblers and we only trade when we feel that we have an advantage, which was not the case today. In the end we had one winner and one loser, resulting in a roughly break-even day. As with the rest of the week, today’s trades were also index plays. The S&P500 index to be precise.

opening of s&p500 trade for 2/6 trading journal

Although the image above is a bit hard to decipher from trying to cram all that into such a small picture, you can at least clearly see the chart which led us to enter this trade. While our overall view is a bearish one we felt that there was a pretty good chance that the S&P500 index would “bounce” off this low point (which roughly aligns with a minor support level on this time frame). A good enough chance to be worth a $100 investment anyway. So, at 18:20 GMT (which is also “broker time”) we purchased a call option on the S&P500 at 1767.750 for $100, with an expiry of 18:30 and offering a 70% return rate.

Unfortunately, as you can see in the image below there was one “bad bar” where the price declined sharply just before expiry, and then bounced back up just as sharply right after. You have to take the bad luck along with the good, it’s just part of the deal. Luck balances out in the long-run though and that’s where skill (or a lack thereof) comes into play.

opening of 2nd s&p500 trade for 2/6 trading journal entry

The above screenshot was taken just after expiration of our first trade, and just prior to entering our second. The unfortunate outcome of our first trade did not affect our trading thesis, however. Nor did affect the technical analysis picture here. A long red bar right at the 18:30 mark that was erased and then some on the very next bar is nothing but short-term “noise,” and should preferably just be ignored. With that in mind we opened up a new trade on the S&P, moving the expiry forward 30 minutes to 19:00, and increasing our investment from $100 to $120 dollars (to more fully cover the losses from our first trade).

traderush optionpro chart of 2nd s&p500 trade for 2/6

This trade went well from the start and never looked back. The image above shows the trade about 5 minutes after opening and was about as close as it got to ever dropping below our entry point. This option was also offering a return rate of 70% so on our $120 investment we received a payout of $204, for a profit of $84. And we forgot to mention earlier that the first trade offered a refund rate of 10% on investment, for a $10 return on our $100 invested.

traderush investments history for 2/6/2014

That brings us to the end of today’s trading journal and our Traderush investments history. We made two trades for the day, with one winner and one loser. We invested a total of $220 on the combined trades, and received payouts totaling $214, for a daily return rate of -2.73%. A loss of $6 for the day. Not exactly a crippling loss. And a loss which we don’t really mind. A losing day of -$6 will be erased and then some by almost any winning day. And as long as your profits on winning days are larger than your losses on losing ones you will be a profitable trader overall. So until next time folks, trade smart and be lucky!

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