Trading Journal Entry For 3-3-2014

Welcome to the month of March everyone. And may it turn out to be a profitable month for most of us! (all of us being just a tad too much to ask). As we had predicted, US markets started the day with a steep drop off, before declining even further throughout the first half of the trading day. They were able to regain some ground during afternoon trading hours, but not enough to erase the majority of the earlier losses. In the end, our favorite market proxy, the S&P500 index finished up the day at 1,845.73, a loss of 13.71, or -0.74%. The low of the day, however, was way down around 1,835, a good 10 points lower than where we finished. Look for that level to become a future “testing ground” in the coming days.

daily s&p500 index chart for 3-3-2014

As for ourselves, it was a very “lazy” trading day, with almost no analysis work and only two trades made. And one of those two shouldn’t have been made at that. Laziness rarely pays. The first trade was a solid play though. Since both trades were made for the same $100 investment amount, and the loser had a 10% refund rate, it was basically a break-even day with this split outcome. But let’s look at that first trade.

opening of our vix index trade for 3-3-2014

We snapped this overlay shot immediately after entering this trade on the VIX volatility index (one of our favorite assets to trade in volatile market conditions) so that you could at least partly see what we were seeing to make us enter this trade. That’s a pretty nice chart set-up there and the timing was right as far as the expiry so we got into this trade without much hesitation. That setup is commonly called a “Head and Shoulders,” with price being right at the end of the right shoulder when we got in. Of course things don’t always turn out the way the are “supposed” to, but they certainly did this time.

Summary For VIX Trade – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 17:58 / 19:00
Investment: $100
Returns Offered: 70%
Entry Rate / Expiry Rate: 16.25 / 15.97
Returns Received: $170.00
Profit/Loss: $70.00 Profit

charts showing our s&p500 index trade for 3-3-2014

Our next trade wasn’t a terrible play, but it was probably premature. It was also a decision that was made quickly and without much in the way of analysis or reasoning to back it up. So why was the trade made? Good question, and it probably shouldn’t have been. In our defense, it was breaking fairly decisively down when we pulled the trigger. However, there was also an hour left till expiry. And while we had good reason to believe that price was going to decline over the very short-run (and it did), we had very little reason to believe that it would do so for the whole hour (and it didn’t).

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

Trade Outcome: OTM
Entry Time / Expiry:
 20:28 / 21:00
Investment: $100
Returns Offered: 70%
OTM Refund Offered: 10%
Entry Rate / Expiry Rate: 1841.120 / 1845.340
Returns Received: $10.00
Profit/Loss: -$90.00 Loss

investment history for monday 3-3-2014

Which brings us to the daily trading totals for our Traderush account. Totals which you have probably already arrived at on your own, considering the small numbers we’re dealing with today. We made only two trades today, both of them standard high/low options, and both for an even $100 investment. One finished ITM, and the other finished OTM for 1/1 split.

Daily Investments History Totals For 3-3-2014

Trades Made: Two (2) Standard High/Low
Trade Outcomes:
 One (1) ITM + One (1) OTM
Total Investments: $200.00
Total Returns Received: $180.00
Total Daily Profit/Loss: -$20.00 Total Daily Profit
Daily ROI: –10.0% Daily ROI

Certainly not a good day. However, since it was such a low volume “lazy” day, the absolute values are quite survivable. Heck if only all of our losing days amounted to a mere $20 loss we would be very “happy campers” indeed. Alas, they are usually not so small. They are, however, both less frequent, and of less magnitude than our winning ones, on average. And that, my friends, is all you need to be a consistent profitable binary options trader. Until next time, trade smart and be lucky!

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