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12/20/18

Return of Volatility

Like most traders who risked their own money in the market, I have lost my fair share of "tuition money" learning how to trade profitably. I spent enough money and had just enough success to convince myself that I could trade for a living. I saved for over a decade for a (very) modestly sized trading account with the intent to trade full time in 2017. In my anticipation to trade full-time, I have been sowing the seeds of my bearish biases to the bullmarket.

Needless to say, a bearish sentiment in 2017 was not good for my trading account. I had a few short-lived winning streaks followed by massive losses. As 2018 comes to an end, I have given a lot of thought about what happened in 2017. In short, I learned that I am not the cool calm pure technical trader I thought I was, or want to be.

2017 was clearly a bull market, technically on a monthly chart, it was as clear as day. I never bothered to look at the big picture as to what was happening, I stubbornly stayed focused on day trading from the perspective of a daily chart for an overview, and used a 5minute chart for initiating my trades. On the surface, there is nothing wrong with the way I was trading, the issue comes into play when the majority of trades I was taking in a bullmarket were short trades.

I became fixated on wanting to daytrade in a bearmarket. For a guy who took pride in using technical analysis realized that most of my successful "daytrades" occurred when I was shorting into a down market. I began trading in 2002, I cut my teeth daytrading with real money between 2003 and 2008, my first real profits came quickly on short trades, my winning percentage was well above 50% and I was taking these wins for granted.


I also took the volatility for granted, as the market was nearing the great recession before it was obvious to everyone, the housing market was doing well, banks were offering CDs as high as 5% for 12 months, all was good. The secret sauce to my quick success in trading I owe to volatility in a market that was trending downward. Having the basic knowledge of technical analysis and the confidence to risk real money, I became the biggest advocate for all things "technical analysis", just do a search on Trin Café to see how much of nut I was.

Fast forward a decade, I am firing off real trades with real money and size and the volatility in 2017  decreased dramatically as indicated in red, in contrast to the highlighted green area where the VIX was well above 25, it was not just some random chance that my best [short trades] occurred during this same time.


Vix 2002-2018




The truth is, I have been a bear trader pretending to appreciate going long or short, my bias for taking bearish trades began on the first profit I ever made trading. If you have shorted a stock or a futures contract and been rewarded with instant profit, you can relate to the euphoric feeling of being right. I now know that my bias to short has never left, I'm not sure if I can ever claim to not have a bias. With all of that said, my current trading has been doing well the past few months, notice how the VIX has popped up since October.

In October, the market began selling off, the same time my bias ass trades started working and paying off. Unfourtantly my account is too small to trade with any real size, perhaps that's a good thing? Trading options with a small size can serve as a humbling reminder of who I am and who I am not which will lead into my next post about how I plan on trading into the next decade.
October began the return of volatilaty... and profits for a bear like me.

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10/26/18

Profitable


Some days it is ok to keep to yourself.


I have no plans of participating in today's market. The idea is to wait till next week for another opportunity. Hope we all ended this week with some trading success.

Disregard above. I saw the market selling off and I jumped into a Nov DIA option trade. It was quickly turning a profit until the market started to recover, oddly enough around the same time, the "Bomber" was arrested. I was able to close my position with a $10 profit.  Happy to be able to end the week with a good profit.

Hope you all enjoy the weekend!


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10/23/18

BURDEN OF A PROFIT

YM Chart
DIA Chart [DIA JAN18'19 PUT 260 Strike @ 10.14]

The saying let your winners run sums up my trading experience, I assume it is the issue with most traders. We hold on to our losers for far too long and we quickly cut our winning trades for the quick profit. Why a dopamine fix of taking a profit outweighs taking a large loss still puzzles me.
I'm going to use this position as my opportunity to let this winner run, God willing I will not turn this winning position into a big loss.













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10/10/18

SELL OFF!

YM 5min Chart
I'm doing my best not to regret closing my DIA NOV02'18 270 PUT. I took an 80% increase in option value over what is now a 300% gain... would've should've could've I know.

I did not day trade this chart, other than the option positions I closed today. Perhaps this is just another bear trap, either way, I took my profit off the table and I will wait for a market retracement before I decide to get short again... via options.


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10/3/18

October 2018



The market has continued to rise higher despite U.S. political drama, trade war, Middle East conflict, China's aggression in the disputed islands. Not to mention the midterms are on the horizon with the FBI investigating Russian election interference.

I'm still bearish. I am fully aware I can not time the market, but I am putting my money to work before it becomes obvious the market is selling off. I have been bearish for the past 24 months, I have taken bullish positions to supplement my losing bearish positions. My stubbornness is my willingness to commit to a strategy of being one of the first to take advantage of a slow down (when) it happens.

My current positions are all bearish(I cut my losses quickly and hold on to my winners).
For the month of October, I'll update this post in the comments section from my phone.

Bought 10/3/18 @  3.40
DIA NOV02'18 270 PUT
Close    ----
P&L 69

Bought  Sep
THRM DEC21'18 45 PUT
Close    ----
P&L 93

Bought  Sep
UVXY2 MAR15'19 CALL 
Close    10/3/18
P&L -132

Bought  Sep
WFC APR18'19 PUT
Close    ----
P&L 72





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9/6/18

Whale Hunting

A three day market slide is a good day for my current positions. 

UNRLD $189



EWZ has to be watched closely, might close it Friday if it continues bleeding profit.

SPY is starting to work well, my largest position I will jave to keep on a tight leash, I have seen the market rally against me for the past two years.

UVXY, it was at a historic low when I bought it. A expiration of March is a lot of time for volatility to come back into the spotlight.


I'm holding expiration dates in November December and March anticipating to catch the market fall. You guys know I have been like Captain Ahab looking for my white whale since 2016.




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8/10/18

When Is Enough Enough? Update

It's been a long time since I posted, I have been on a hiatus from blogging here on Trin Cafe.
The Summer break has given me a lot of time for some humble self-reflection on the past 18 months as a "full-time trader". I won't bore you with the details, I will just say that you will learn a lot about yourself after losing the cost of a small house in less than 2 years in this opportunity I have called trading for a living. When years of preparing and saving for the trading account does not pan out as once hoped, what is a trader to do?

Option A: Call it quits.

Option B: Seek small wins and smaller losses.

Option C: I am still searching for an option "C", I am not sure there are any other options. For now, I am sticking with option B.

I am blessed to have a passive income that allows me to sit on my hands and ass long enough to risk it in these financial markets. For better or worse, the Pandora's box has been opened, the genie is out of the bottle, the toothpaste is out of the tube... I am a trader... FYI, (I hate the casino).
I began trading in 2002, I have traded through the "great recession", I was trading real money in a live account during the flash crash of 2010 and I am still here (dumb ass) maybe?

I am definitely foolish enough to think that I may get it right someday just long enough to where I can manage a decent size account again. Is that someday coming in 2018?

Stay tuned!




POSITION

SPY SEP 283 PUT @ 4.17

RESULT

Closed @ 4.70 for $51 profit.



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6/21/18

A Broken Clock...

Long August Put 24,700 STRIKE

If your bearish long enough and can stay capitalize, it will pay off someday?

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5/29/18

May 28th 2018

I cut my losses on previous AAPL options positions. The Bull Put on AAPL 185/175.5 PUT Option expires June 8th, it still may be profitable, the break-even was AAPL @ 183 by Jun 8th expiration.
I'd rather close my long position and prepare my portfolio for a potential negative downturn. I've been bearish for damn near two years, looking at the Geopolitical landmines coming up with the Russian investigation along with Euro stress from Italian political turmoil has me cautious to the upside. We have three choices as traders, go long, go short, or do nothing and sit on the sidelines.
For the knowledgeable options traders out there, yes there are strategies that can make money options trading in a low volatility market. I believe betting against high volatility is a recipe for disaster in the long term.

Portfolio
YM September PUT 24600 Strike
FXE September PUT 110 Strike
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5/21/18

Options Trading With Apple (AAPL)

No trades today. In my 16 years of trading, I have primarily day traded 60-70% of the time, the other trading I was doing  attempting was in options. My understanding of options is better than average, with that said, I know I am not sophisticated (smart) enough to implement too many complexed option strategies at one time.

See below for some of the various option strategies. 
Option Strategies
Options I have baking in the oven.

Max credit by Jun 8th exp. $244
Looking for AAPL 185 Call to go higher this summer

Today my P&L was positive $152, or I could say I was visiting "Profit Island", a phrase a shamelessly stole from Rhiese over on his blog Trading & Stuff.  The trader I want to be is the kind that trades 70% options and 30% day trading.

Options give a trader the ability to lock in the profit as well as the risk. At the end of the day, we are all trading because we believe we can identify and minimize our downside risk. Currently, my winning day trades gives my account that quick injection of P&L that makes trading feel worthwhile. However, with every winning trade, I have been prone to overtrading digging myself a deeper hole to climb out of.

YM 5min 
As I mentioned, I didn't daytrade today knowing I have capital tied up in option positions. The YM was up more than 250 points, I'm happy to say that I had zero FOMO. As I reviewed this chart, my trading style/technique/method would have had me trading in chop, possibly dangerously overtrading?

Hope we all end the week, month, year on "Profit Island"!
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8/23/17

Options Portfolio



I'm still mentally on vacation, hence this short post. Day trading conditions have been choppy the entire summer, I'm going to sit back and see how much this bull market has left.
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6/21/17

Dumb Money Is Bearish This Summer!


It's not a secret that I'm bearish on this aging bull market, we all know that trying to time a market correction is a futile attempt, smart money would just get long the market until the music stops playing. My dumb money [disposable day trading capital] wants to participate in a market selloff that has not yet occurred.

I woke up at 4 a.m. wondering why I have such a bearish bias despite witnessing a bull market, then I realized my biased began when I was introduced to trading way back in '02. The dot-com bubble was still fresh in my memory, I traded very well through the 2007 subprime/credit swap fiasco, and I was in early on the "great recession" recovery in 2009. This is not the usual daily rant here on TRIN Café, I'm hinting at the few times a year or a decade that can make the difference in long-term trading success or bottom-feeding for a few points/ticks at a time.

The almost should've, could've, would've is littered throughout this blog, I'm determined to be on board when this bull market turns the corner. With that said, I'm risking a total of $416.54 for the summer in the below option positions. The only clear bearish chart is XLE [Enrgy], the other two charts XLK [Tech] and XLF [Financial] are well into bullish territory, I admit I am way out ahead of any bearish signals.



Summer Option Portfolio



Sep 15 '17 55 Put @ 1.28 | as of 6/21/17 XLK 55.64

Sep 29 '17 64 Put @ 2.43 | as of 6/21/17 XLE 64.75

Sep 29 '17 24 Put @ .68 | as of 6/21/17 XLF 24.20





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