POTATO gun loaded and firing.

Would you be able to consider a put here at resistance in DRIV?

Signed,
Desperately seeking PUTS

The jetstream coming from the flight of the phoenix is blowing me off my seat!

Michelle,

Your question about a stop half way through a candle...

Don't do this. Instead, go to a 1 day chart to look and see what happened inside that candle, and apply the same strategies you would on a 1 year chart.

Unless of course cutting a candle in half is easier.

I'm definitely smiling today. thanks to DRYS,FSLR and RIMM. now for NILE...go up already!

Jeff,
I just wanted to thank-you for yesterday and the whole NTRI trade thing. I got out at five minutes til the close and made a nice chunk of change.

I took a piece of advice that you gave a while ago to heart. Actually, it wasn't even advice, it was just something that you said you do. After a trade is done, good or bad, you let it go. If memory serves me, you said you delete it from your list??

I started doing that and it has helped me to become less emotional about what happens to the price after I exit the trade.

Thanks for all you do!

But Jeff what are you going to do about MON? earnings are coming up.

You are having a great year. Care to share your percentage return(overall)? I could guess,but I bet its higher.

Arty,

The one caution I see in the DRIV puts is that we have a confirmed triple bottom breakout on 10/1 and we seem to be forming a flag from that breakout.

Anu

Sarah,

Since I account for almost 90% of all open intest in the MON Nov Calls, I figure I will reduce my position and take a chunk into the storm.

Jazzy "Jeff" and all the helpful OA. I am one of the many lurkers on the site. Deceided to post today because my emotions are HIGH. I am getty TODAY. I have NEVER seen my account like this before. I always believed I could do it, but today is the day reality HIT. I have been an investools student for one year and on your blog for a month. I have a confession..............

I AM AN OPTION ADDICT. I'm loading up on some gear.

I have to say you are a blessing continue to "Do Your Thang". Hopefully, I will be able to contribute and make a difference like all the other OA.

THANKS

Jenerica

I would love to share my percent return...but I am superstitious. I will allow you to guess though, and we can play "Warm" or "Cold."

GRMN - quick story: a few years back when Phophet Charts - Mr Knight wanted to raise his subscription fees to Think or Swim - Tom & Scott said "screw you" and built their TOS charts - now Mr. Knight works for TOS.

Don't sell GRMN short - Oh! I mean sell Naked Puts on GRMN. A few days ago as posted on this blog I sold the Oct $100 for a $3.80 premium. Go Theta.

Grmn is here to stay and with earnings a few weeks from now, I would not bet it down. GRMN is headed North - maybe slowly but North.

350%

600%

Okay guys,

A little off topic, but here it is:

I still can't get my doggone picture to look right on the blog! I'm the first picture (I think) at the top. When I'm logged in, I can see my picture but no name beside it. When I check it from another computer, I just see the gray outline of a picture and no name.

Any suggestions? Hmmm..

wait as I remember your high from before around 300%, so now I'll 900%

Krystal, Ummm. I can see your picture and your name clearly.

418.599%

Jamie

Krystal,

What you are seeing is normal. None of us can see our name. And yours will always be the picture at the top. Each of us sees our own that way.

--Patti

OH! So you can see my picture and name?

It was really bugging me because I felt like I was messing up the "clean and finished" look of the blog.

Krystal, Yes, I have seen it. But so many OA are on right now, I don't see yours at the moment. It only shows a few of the ones here at any one time.

--Patti

I've tried to change my name on the posted line and add a picture. Can somebody please email me and help. I'd love to figure this out.
jamielongport@yahoo.com

Jamie

Does anyone know if the U.S. Markets are open on Monday, Columbus Day?

This comment has been removed by the author.

Aaaaahhhhhhh!

Today is the inverse of Tuesday (or at least I think it was Tuesday.) I'm loving looking at my RRSP and options. I ditched 3 of my options yesterday because they broke the trend. IBM and LVS were two of them. LVS was a stupid stupid move and it was pure emotion based on someone elses recommendation that I looked at and said "I don't see it... but I'll do it anyway." What a dooffis I was. It was an expensive lesson but one I will not forget (sort of like touching the stove when it's on, or putting the car in gear with the accelerator to the floor. Neither of which I would EVER do.... again.)

************ Educational Interlude **************

Here's a bit of information in a non-traditional format. We'll call it "The Trade I Didn't Make." because it was a trade I thought about... but didn't make. Thus the name.

Actually I even mentioned it. SHLD. 5 days ago it looked like a perfect REE on a descending stock. But I was concerned about the fact that it was on a four day tear and was showing no signs of turning back over and each up day was on stronger volume. So I chose not to take it. Hopefully everyone else felt the same.

Sometimes we learn from non-trades.

markets are open Monday


Amy,
tried to reply to your email and it keeps coming back

VeroBarbara,

I got a notification from TOS saying that no ACH transfers will be allowed. I don't know who your online broker is, but they may be doing something similar (probably just because banks will be closed).

Other than that, looks like we'll all be trading away... :)

Any thoughts on BCSI? It seems to have stalled and doing nothing.

VIP is breaking to a new 52 week high off a bounce. Jan OTM's look reasonable.

Bottom Feeder,

Would you be so kind as to grace a novice with your knowledge...?

When trading a stock like VIP with no recent highs to compare to, how do you set a target? Do tell...

Jeff,
I don't care how much you've made, you've earned that and more. I'm also relatively new to the site, and this is some learning tool, as well as a source of incredible trading ideas. I guess I'd have to say I'm an OA as well, and happy to be one.
You're not big on playing into earnings, even with a monster like MON, are you? I'm holding a couple of Nov calls that escaped your reach, and thinking how to play them. Thanks.
Mark

Check out the price and volume action on STAR.

I lost FXI yesterday because of a huge drop...

now, it has huge gain...

Mimosa

Krystal,

Thanks.

Chris & Catherine & any other Canadians,

Happy Thanksgiving!

NILE is really starting to rub me the wrong way...

Mimosa,

Sometimes you have to weather a few drops to get the big gains.

Jeff

Arty,
Take a look at RL, it broke out of a bear flag three days ago, and is now retesting. Let me know what you think. You're right the put plays are hard to find.
Good Luck

I will tell you this much I love the Doobie Brothers, I love China, and I love RIMM.

Above and beyond that Jeff, I think the potato gun is working and we are going to finish at 63.50 up for the day.

You know that song that says WOOOOOOOHOOO as a lyric. That is waht I am singing right now.

Cheers,
C4

I love the inverse h&s reversal in KSS today.

I agree with you Jeff about the issue of the falling volatility and the impact that has on the value of many options.

On a broader more index based level, I had looked at buying some VIX calls because a pop back up seemed possible in light of the recent steep decline, but was turned off by the high premiums and spread on VIX itself. So instead I looked at IBD's Bottom 200 composite stocks and scanned for puts that I thought my appreciate if the market vents some next week, after today's broad up move.

I scanned specifically for puts on weak companies, or with recent selling pressure. I got WMG, NLS, RAD, ALU, QLTI, PALM, FBR, and USU, and bought some puts on those. It seemed a good alternative to going long VIX here.

Oh by the way a good bet for tonight would be LONG Louisville SHORT Utah, even with that fat 15.5 spread.

VIP target - Ok this is a bit hard to explain without pictures.

Since I'm not working off a pattern I chose to use the 50 da mov avg as my base trend line as VIP seems to bounce off it or the 30 day fairly regularly. You can use your own trend line too if you like. Then I just look for a bounce off the 50 average line and see how far up and away from the average it runs before pulling back. I also consider how long it took.

VIP made a number of bounce and runs since Oct last year. Calculate the size of each move and the average all of them to get the average size of the move.

The average move in this case was around $3.6 which is pretty good for a cheap stock.

I personally am not looking for a short term trade on this one as VIP seems to just move fairly steady so I'm going more intermediate term and multiple bounces.

Brett,

I see the inverse H&S on KSS, actually noticed it earlier today. Is it time to get long some KSS?

VeroBarbara

I see support at 60. Or do we wait for a retest?

Brett,
How would you draw resistance on the H&S pattern? At an angle, or do you pick a horizontal level?

Basstrader

Hey Option addicts have a great weekend.

Jeff thank you for a great blog

VeroBarbara,

Thanks for the Thanksgiving wishes. We're having my family tomorrow (not to eat... but they will come for dinner) and then Catherine's on Monday. I was really expecting to have a ton to be grateful for today. I just sat back and let the money roll in. Then it all rolled back out as the afternoon progressed. My RRSP stocks ended up lots, but the options all kinda pulled back.

Wanted to get into VIP and MDC but neither of them would let me in at the price I wanted. This makes me very ungrateful.

VeroBarbara as far as KSS goes inverse H&Ss tend to be less reliable than some patterns, but there's been a lot of strength in the up and neutral days than in the down days. And it's sitting at what looks like a really good REE. If it moves back down right now, you'd be out.

Take it with a kiss... from someone you know. Not a stranger.

Have a great weekend, everyone. Monday's a holiday up here, so when you see me again I'll be about 15 pounds heavier. Wish Raimo was up here so he could git me a turkey. Mr Butterball will have to do. We're going to visit Catherine's sister in Denver for your thanksgiving. Twice in a row. Life doesn't get any better.

Great week here and a good wrap for the week ...

Congrats to the Big Kahuna for his continued success in trading and being kind enough to pull all of us along behind him ...

Great blog Jeff - you have a heck of a community here ... and the Doobies today .. one of my favorites ..

Good weekend everyone ... I'm still looking for a few good PUTS if you wouldn't mind passing them along over the weekend ... You know - BALANCE! :))

OA's:
Have a great weekend.

C&C Happy Thanksgiving!

High on solars!!!!!!!!!!!!!

FSLR new highs!

YGE headed to $40 soon!

LDK too cheap, too cheap!

--

Buy TSSP only if you believe in the solar/alternative energy bull market.

Oct 3, 2007

TSSP trades@ .0006

The stock is a pinksheet. I have not play anything less than $10 in awhile. But i truly believe in the solar and alternative energy super bull market that will last another 4-5 years. If it turns out to be the case, ALL SOLAR AND ALTERNATIVE ENERGY stocks will fly, regardless of whether they're big or small.

At one point, TSSP traded at $0.35 several years ago. That is nearly 600 times the current price. I know there's been alot of dilution since then but it's a very small cap company, nevertheless. If the solars become white hot, eventually i see TSSP trading above $.35 . I don't mind increasing my stake 600 times. For every $100 invested, it could get you $60,000 when and if the solars become white hot.

Please play no more than $500 and consider it a lottery ticket only. I'm personally only playing $200 for this lotto, but could add more as it rises and as the solars really take off. I plan to hold for a few years.

Good luck.

The blog should disregard the last comment above and it will be stricken from the record.

Lance Ito

Well, it looks like I missed a really good week of successful trades by being out of the market. I hope to catch up to you guys next week and will spend a good portion of Sunday looking at charts and stalking some At The Gate trades.

Took a profit on RESP (100%, thank you Raimo) as they were Octobers and didn't want that to melt over the weekend. If it retests, as I think it will, I might jump back in with longer calls.

So I will enter next week with a clean slate except for DSX & TRAK which is on an almost vertical tragectory. It has to be getting tired and needing a break so I might exit that with a 35% profit (stock trade) for a 6 week trade. Not too shabby.

Have a great weekend everyone. Don't spend all your profits at once!

I finally broke resistance in my account and am projecting another 100% gain by year end.

3 of the 5 stocks I have options on hit all time highs today. :-)

So I was at a little convenient store last night and inquired about Monster Java, he said they didn't have any and I said I think it will be big, he said he would order some, so those of you that have HANS you can thank me for adding to your gains. :-D

This is one of those great days, and I have to be pretty excited when I am up over 10% on the day when I have 1/10 of the size of account of my grandma and she was flat for the day. I mean I hope she does well also but I have to smile a little :-)

thanks Jeff and all you other OA's, lets keep it up next week.

my guess for Jeff's return is 500%, which I hope is low.

Also, anyone who did not make money on the RIMM options, it was probably covered but you bought too far out of the money.

I learned this the hard way on AAPL's last earnings, I gauged it perfectly, I did analysis and came close to actual earnings and figured there would be a 10-15 dollar move, so I loaded up on way out of the money options not knowing about the IV decay.

what I learned from that experience was, if you are going to hold OTM options, it is "best" to hold them going into earnings, then sell and if you think there will be a decent move at least buy ATM if you think the move will offset any IV decay that will occur. Hence why I bought 100 calls, I figured a 10 point move was reasonable in RIMM with higher guidance and an up day. So I assumed worst case it loses 1/2 its volatility that takes off 3 dollars on what will prob be 6 dollars of gained intrinsic value so I gain 3 dollars overall. Luckily it went up more and decayed less so it was a quick 80% gain.

Sorry that was a lot of numbers but just an example of what I was thinking about it, of course after I got Jeff's nod that got me off the fence, haha so I thank him for that.

Ben

What a great day! Thanks to a tip I picked up 100 shares of RIMM yesterday at $98.79 & 2 November contracts. Sold them all this morning (too early as usual) and made 12% on the stock and 44% on the options. Not a bad quick buck.

Thanks for letting me ride on your coattails Jeff. Only $9100 more and I'll be broke even! Or 5 more trades like today. I am making a comeback....

Here's hoping for a nice little rise in NVDA. And next time I'm in town Jeff, I'll drop the spuds off.

My guess for Jeff's return is 375%, based upon a previous comment and also a rant a few weeks ago...

Have a great weekend everyone.

Jim - former lurker

Bottom Feeder,

That was a perfect explanation...thank you!

JK,
Give me a warm or cold. I am going to say that sense T-Bone has hit every trade nuts on this year and she only trades 20% options, that you are up 121.5%. Please advise.

Cheers,
C4

Jeff,

My guess is 295%.

Everybody, have a great weekend.

Arty, you are cold... I am surpassing my best year, which was 280%. Lots of blood, sweat, tears, and transaction costs.

500%

Jeff,

I am assuming you were joking on your comment about having 90% of the open interest on NOV options, but at the same time I am not ruling it out since you ahve been trading for 9 years.

I am curious and I know you prob don't want to advertise but what size of an account does a pro like yourself trade with(you could give me a general average that you know of if you want)?

Also, lets say you make a 300% gain(for the year), do you just roll all that into your next trades, or do you take some of that and put it in something like a CD and just play with profits? Part of me thinks once I get back to glory I should only trade with my profits because it would save you if you ever blew up but it decreases your leverage(unless I can get back to my 100% gain).

thanks and congrats on making the market your bitch.

Ben

You know what I love about you Kohler?



EVERYTHING...

Great job! Keep it up I am shivering and I knew it!

Everybody have a great weekend!

Cheers,
ART

Quick peek in here from the mountains of PA.

Jeff, your returns, whatever they are...not good enough. I plan on exceeding you. It may not be this year, but look out buddy...here I come.....it is my goal...

Raimo,
I am picturing you in a tree waiting to shoot some creature that is about to wind up on your hamburger bun (venison burger of course), while trying to guess Jeff's success rate for the last year and all the while composing a poem to your main poet. I am flattered but something about this situation makes me feel that the world is way out of balance. Get down from the tree, open the closet door and welcome the world. As in the WAMU commercial, you need to feel "free as a barn swallow". We still love you Raimo, even if you are long WNR and short DKS,,,as your buddy alluded to.

By the way, thanks for SNP!!

Poem to follow!!

The Phantom Poet

I think being in computer hell didn't help me this week. When my computer isn't working, my brain doesn't work. And everything suffers... This week was a loss for me overall despite the gains I made (blaiming that on the computer) but I sure am happy for OI and CROX to name a few. My puts went caput but next week I get to start all over again and even though I'll be on a slightly higher level of computer purgatory it will still be hell for a few more weeks which means I'll be winging it. Not a good feeling. But I refuse to buy the computer I want until after they release their newest operating system and that doesn't come out until sometime this month.


I hope all of you Option Addicts have a wonderful weekend. 


Jeff-I can only imagine what %. I'm going to guess 420%.


liz

Jeff,

I would say on the MON trade you are up 436 % , and for the year you are up about 350%..

Anu

I finally sold most of my ELON while it was up near $30, BCSI is next. I still have some hope for BCSI since it just split, but if it can't get over 40 pretty soon... I'm gonna have to bail on it too. Good ol' OCT expiration is coming up too fast for me.

What are the rest of you doing with these two stocks?

James H.

Valerie,

I just ran the search you posted on Thursday using the bearish criteria and replacing the volume indicator with a one day relative performance as low as possible and there are so many great setups there for bearish trades even in this bullish environment. It is a great search for anyone who is looking for bearish plays. This is a search you should really try.

Valerie thanks so much. With this and Jeff's watch lists there should be no reason to not have proper diversification in the portfolio between bullish and bearish plays. THIS IS A GREAT SEARCH.

Anu

Jeff, if 100% =1 and 200% =2...etc .....is your return a number that you could knock off your golf handicap in a year ?
You deserve everything you have worked for. The wealth you created for yourself is compounded by the wealth you have created for all your OA's.
First you empower us to put money in our pockets then you clothe us with OA gear. I can't wait for the next part of the journey.
Thank you for everything.

Have a great weekend OA's

One more thing, can we charter a plane and get Chris to fly it to China. There must be somebody over there we can thank for embracing capitalism.

Jamie

Jeff....just finished the recorded version of weds master talk....it was excellent!!! you are #1 when it comes to visuals, thats why i love learning from you!!!

thanks for your assistance with another great week!!!!

~~Happy Weekend~~

Thanks, Jeff, on suggestions to setting stops on stocks that gap up. I had heard the candle theory somewhere, but didn't know if that was just someone grasping for straws or not.

Maybe are you up 600 percent?

Thanks also for the CME and ISRG setups. I like being on your team.

Michelle

Jeff, Brett, Raimo, et al,

Oh oracles of trading...who's single commissions are greater than my best profit...please enlighten me...

How do you reconcile the seemingly conflicting methods of:
(a) Taking profits when your target is hit, and
(b) Adding to winning positions and letting 'em run?

Many thanks,

Mike from Seattle,

I've been wondering the same thing.

Option gods, do tell...

Mike and Krystal,

I don't claim to be an option god but I have found I take profits as the pattern completes the target and get in on a low risk entry if it continues into a trend. You can leave a portion on the table after the pattern is complete but I have found for myself getting into a whole new trade works best for me. Hope this is helpful.

Jason

T Bone and I were sitting around the house doing searches tonight and she said, "I am going to get me some puts!"

Little did she know, tough to find.

Cheers,
C4

The future is here. The future is solars!!!!!!!!!!!

Last correction (to taunt the bears) before the stratospheric rise............??

Get on board. SO hot my eyes hurt!!

also, our 60,000% solar lotto ticket.
---

Oct 3, 2007

Buy TSSP only if you believe in the solar/alternative energy bull market.

TSSP trades@ .0006

The stock is a pinksheet. I have not play anything less than $10 in awhile. But i truly believe in the solar and alternative energy super bull market that will last another 4-5 years. If it turns out to be the case, ALL SOLAR AND ALTERNATIVE ENERGY stocks will fly, regardless of whether they're big or small.

At one point, TSSP traded at $0.35 several years ago. That is nearly 600 times the current price. I know there's been alot of dilution since then but it's a very small cap company, nevertheless. If the solars become white hot, eventually i see TSSP trading above $.35 . I don't mind increasing my stake 600 times. For every $100 invested, it could get you $60,000 when and if the solars become white hot.

Please play no more than $500 and consider it a lottery ticket only. I'm personally only playing $200 for this lotto, but could add more as it rises and as the solars really take off. I plan to hold for a few years.

Good luck.

Friday, October 05, 2007


Alternative energy ABAT the next HANS?

ABAT closed @ 6.97

The company makes advanced lithium batteries serving mostly China currently. They are growing very fast and are profitable. You know how much i like solars and alternative energy. It's the only reason i would even touch stocks under $10.

ABAT will be listed on the Amex on October 9th. There should be a rally before then as well as a rally after the listing.

I expect this sector to blow the lid of the freakin roof in 2-3 years. All these stocks will go steroidal.

I'm giving a $70 price target on ABAT within 2 years.

Earnings Strangles
Here are some earnings strangles that look decent to me. Who has perspectives on which might be better or worse?
I see some other setups for this earnings season that I've already missed because I didn't research them early enough. Shame on me.

ticker / earnings date / current prices / strangle / mid price
AKAM 10/24 $31 nov 35/25 $1.50 Coiling into a descending triangle
DAKT 11/14 $32 nov 35/25 $1.40 Nov options give only 2 days after earnings
GYI 11/01 $28 nov 30/25 $1.55 Didn't move much 6 months ago
IVGN 10/30 $84 nov 90/80 $2.75 IV still moderate
OSG 10/29 $75 nov 80/70 $3.95 Retesting horiz support @ $72.50

Mike From Seattle,

I know when I am going to take profits BEFORE the trade is placed. Using RTR, when I get there, I take half off the table. Now, I know some folks can't do this because they can only buy 1 contract, making that not possible. For those folks, I would do one of two things. Do not take a trade where you can only buy one contract...look for another trade where you can take two...or....sell at RTR, dont mess around.

If you sell half like I do, you can let the rest run, and make decisions along the way based on time to exp. and what the stock is doing. For me, RTR is pay day, and I am here to get paid. Again, at RTR, I just take half, no questions asked. No emotion. And I dont' feel bd if the very next day if the stock runs straight up..I cannot know that is going to happen, so I focus on following my rules and being consistant.

As far as adding to a trade, I don't if it is going to put my risk % in that stock above my % rule for any given trade. However, lets say I CAN add because at some point I sold half, and now I feel is a good entry to add to my position, I treat the add as a NEW TRADE, but don't risk more than what I previously had sold. In other words, I do not want my adds in a stock (or option play on that stock) to violate my portfolio % risk allowed.

Let me say one other thing here also....and this is based on my personal experience, not something I read or was taught...CONSISTANCY matters. If you are not CONSISTANT, then as far as I am concerned, you are gambling, and the house always wins. CONSISTANCY includes all your trades having the same impact on your account, regardless of the price of the options. You can't have one GOOG contract and 1 X contract and be balanced....if you are trading this way, then you are more concerned about the affect of GOOG to your account than X. That is bad. Each trade needs to carry equal weight......or, just give me your money instead of giving it to the market. Please make checks payable to CASH...


Does this help??

Raimo,

NAVZ - you took a put position. No way were you going to give the market maker that much of your money on the calls. $500 spread? What is up with that? And what is up with the lack of strikes? And the lack of timeframes?

Raimo,

Can't say I really thought about "consistency" in the context that you pointed out in your last paragraph. That makes sense and is definitely something that I will keep in mind going forward.

Va Beach Girl,

NAVZ is traded OTC. I am thinking maybe this has something to do with it...

I was aware that NAVZ is an OTC trade. I just think they're nuts on the spreads. And I'm baffled about the open interest on the put side.

I didn't notice the OTC piece right away. But I know what you mean, I'm not sure either.

Raimo,

Thanks for the comments! I'm still sorting things out on this a bit so I'm going to paraphrase to see if I understand.

First, we agree that when a position moves in our favor AND we adjust our exit area to preserve profits the risk % for that position has actually reduced substantially. Adding to the position at that point can be done without violating our maximum risk % rule (but that doesn't mean it's a good place to add).

If I read your comments correctly you will:
- Sell 1/2 of the position at your initial profit target, RTR.
- Adjust the exit are on the other 1/2 of the position,
- Enter another position in the same equity if it presents a good entry point, treating it as a separate trade with it's own exit area and RTR.

An important detail (at least for pulling this together in my mind) is that in practice the point where you first reach your target (i.e., RTR) is not a point where you would take a trade or add to a trade because it is typically going to be far away from a support level (i.e., far from REE). But if the price subsequently reaches a new REE then is the time to add.

test

Raimo,
Can you explain your comment about one GOOG and one X contract not being balanced? I don't understand that. And I don't have contracts on either stock, I am just trying to understand what you mean.

Thanks!

Laney,

I don't want to speak for Raimo, but here is my take.

On a $75,000 account if you risk 2% or $1500 on a trade, then that is what you need to risk each and every time up to bat. X tardes around $100 and GOOG trades around $600. You need to size the amount of contracts around your risk percentage. If you don't a 3% move in X with a delta of 75% would be a loss of $225 per contract. A 3% move in GOOG with a 75% delta would crush your account $1350- per contract.

I have never traded a GOOG contract. with my account size my choice would be to either not buy the strike with the best R/R (bad deal) or risk more that I would be able to mentally tolerate (worse deal).

For me knowing that at a close below my stop I will lose the same amount on each trade keeps me sane. As long as you can get some winners like MON, CROX ect. losing a bunch of small times can get frustrating, but I don't go home and kick the dog.

Raimo,
I respectfully disagree with your last comment ..."You can't have one GOOG contract and 1 X contract and be balanced". If I were to trade GOOG all I would be able to afford to maintain my portfolio risk level would be one contract. Depending on which strike and month, I might only also be able to take one X contract. I base the number of contracts I buy on the $$ amount of trade risk.

Maybe we're saying the same thing after all but I was confused by the way you worded it.

Meanwhile, tomorrow is a bank holiday but the stock market is open. I think that overall volume will be light which might make for some bigger swings in stocks which might also mean opportunities to buy in at favorable levels. Anybody have any thoughts on this idea? Obviously, having been out of the market last week I am itchy to get in but don't want to chase good stocks that are far from REE.

OK, Flying-Pro, I understand that. I usually don't trade really expensive stocks because I dislike having so much money tied up. I like to take small trades so I guess I have been managing my risk.

Laney,

Flying-pro hit the nail on the head. RPRA is key here so that if your losing trades outnumber your winners, you still remain profitable. If you are not sizing your postions correctly, you are doomed.....in my opinion of course...

Very good discussion going on guys.

From my experience this was one of those AHA moments a few months ago. I was doing 1 contract per trade but when I analyized results I found that I lost more then I made because on trades like CME, GOOG even RUT, 1 contract means I had lot more of portfilo at risk in the trade. I then changed my rules to not risk more then a certain amount and do my calculations based on that. since then I am have become much more consistent.

By the way guys my august win to loss ratio was 1:2 (1 win for 2 losses). For september thanks to this blog and mentors like Jeff, Raimo and Brett and support from all aother regulars the ratio 1:1 which is very exciting for me.

The REE entry has been the single most effective change. I am working on RTR and my aim is to make October even better in term of rate of return.

By the way August rate of return for me was -11.9% and for September it is arround +17%.

I cannot thank this group enough on clearing the fog for me and making learning fun in the process.

Come on Market! I am ready for Monday ;-)

I honestly think that trading as close as you can to a machine will benefit you.

In general I mean just selling when it drops below your line in the sand and selling when it hits your target.

There are times when obviously having rules may need to be slightly adjusted but I am going to see if I can setup Ameritrade to do some automated things.

Also, just an observation from myself, unless you are truly daytrading very short time periods then watching the market constantly can be hazardous. I seem to have gotten things under control as I showed myself last week watching my accound go from +3200 to -800 and finish at +900. But those that get emotional with daily range swings should watch less or just check in. I feel like many may even do better simply checking in around 30 mins to close. I have considered doing this but I want to learn short term trading as well.

just a few thoughts from a learning rookie. :-)

Ben

Also, I have a mybloglog account but when I try and log in using the google/blogger name it always says my password or username is incorrect. Does anyone else run into this?

thanks

Ben

Ben,

I don't want to sound like a salesman, but I LOVE Think or Swim as a trading platform. You can place your exits, both stop and a limit if your price target is hit and one will cancel the other. Also for Investool students the commision is only $1.50 a contract. I got chewed up at Scottrade on commissions. It sucked to have a good month and be up 10-20% only to find out that 5% of the account went in commissions.

Raimo,
Can I ask for you to clarify one more time on portfolio risk. I have recently been playing with the a rule that once my stop is well above my breakeven point I will add at REE and treat it as a new position. The downside to that is if you add 3 or 4 times to the position and bad news hits that 1 position your account can take a hit. The other side of the coin is in a big runner, X last year, your profits would be great.

P.S. - I am about 120 pages into Murphy's Technical Analysis book. Great read, cant wait to get through it.

Flying-Pro,

In order for my portfolio to be in harmony, every new trade must take on the same risk. I dont take a "small postition" here and there. The risk should always be the same..otherwise, whats the point of risk analysis in the first place. If yo utook a proper size on the trade the first time, there should be no adding to the postion for the reason you mentioned..bad news hits, your whacked. The only time I will add to a postion is if I have already taken profits from that position which now allows me to add to it, but I still treat it as a separate trade.

At no time should one stock be able to put your portfolio at risk by more than your allowable risk tolerance, be it 1%, 2%, 3% etc...

Consistancy is key in my opinion...

Doji girl....

Do you see why one GOOG contract will have a greater affect on your account than one X contract?

Thanks,

Raimo,

On options trades then do you only buy contracts with 2% of your account?(assuming that is your risk tolerance).


When you said at no time should a stock put you at more risk than your tolerance I would assume you'd have to only trade that.

I ask because lets say you put on a 10% position but you get in at your exit and likely loss is no more than 2%, now techincally the stock could correct huge below that line and you would then be risking much more than you thought. That is very unlikely but technically it possible.

just curious if you only buy with 2% at a time or as best as you can tell you aren't risking more than 2%

Ben

I was just asking for clarification for others, I know how I prefer to do it already. :-)

Ben

Raimo,
Not really. Again, it depends on the month and strike. I can buy a GOOG Nov 620 call for 13.90. I can buy a X Jan 100 for 13.50. Assuming my allowable trade risk is $500, the only difference is how much room the stock has before I am at my max allowable risk. And that depends a lot on the delta. Obviously a stock like GOOG will make 10 point moves more often than X which is why I don't feel I can afford to trade GOOG directionally. Am I missing something here?

Doji...

When I do risk analysis, I do it for trades I would actually take.

But if your analysis allows you to take a GOOG OTM trade on a one to one basis with an X ITM trade, go for it.

Doji,

If you thought my first post on this thread may have not been worded right, look at my last one. I just read it, and it is not what I meant...nor do I like the way it came across...jeeeesh...late night blogging..sorry if I came across as an ass..

My point is that every trade should risk the same amount (% portfolio risk), but also every trade still needs to be evaluated giving it the greatest possibilty to succeed. If you like the trade, have done risk anlaysis..then take it if you are comfortable with it. My point with GOOG and X was to highlight how different priced stocks need to be analyzed as to there affect on your account, and that they should be equal in weight...you took it a step further...which is fine..

I for one would not take a GOOG NOV 620 call, for me, too risky, does not fit my style of trading.

But if you like it (and I don't think you do) there is nothing wrong with trading it if you accept the risk.

Just got done going through and adjusting my watch list for the week. It is hard to tell what will be in my portfolio by the end of the week.

My shopping list (watch list) in the “close” is HUGE and my money is short.

I’ve got China, Canada, South America and the good old US. Oil, gold, mining, water trans, real estate, insurance, construction serv, apparel, computer hardware & services, communications equip & serv, solar, software & programming, food processing, medical equip, biotech, and BEVERAGES.

My hand is full.

Cheers to a great week!

Happy Thanksgivings to all Canucks (did I spell that correctly?)

SYNA - Friday, this was at REE. Pre-market, it up $1.71. It is currently moving in an upward channel, off of which it bounced on Friday. It looks like it could move up 6-8 points. Any feedback would be appreciated.

Thank,
VeroBarbara

verobarbara,

syna,,,looks good

VeroBarbara,

I agree SYNA does look good. I assume your target is a swing target. Depending on your time horizon, it could move more.

Sue,

Thanks

BOBJ ... a Jeff pick ... up 8 at open ... SAP is buying BOBJ.. Wall Street likes it ...

NILE at REE.

Bass Trader,

From a ways back,

""*Arty,
Take a look at RL, it broke out of a bear flag three days ago, and is now retesting.*""

The unusual thing here is the h&s. Can and h&s be valid in a downtrend?????

Cheers

I can't imagine a portfolio without VDSI .... Look at that sucker .. up to 2 years if you like .. resilient!

Just FYI ...

TAFKAA,

if a H&S cannot be at a bottom of down trend then look at the head and right shoulder as a decending triangle. The action and traget are all same. I had posed the same question to Dave Johnson during a workshop and he response was to not to get hungup in the name of the pattern but concentrate on the price action and sentiment associated with that.

so H&S or decending triangle, the fact is that this stock has made a lower high and same low, now it is almost at REE but you want more confirmation then wait for break below 74.5.

I took a trade on this on 10/2 at REE with a atop above 79.

FCX at REE

GME looks to be at REE.
With the gap up, anyone holding RIMM, what does the target look like right now. I bought at $100, and have a $120 target, taken from the 9/7 low of $80. Anybody?
Thanks much.

I don't know about you guys but I'm finding that everything on my shopping list for today is very pricey, option-wise. I wanted to jump on VMI this morning but decided to sell a put instead, to collect on some of that high ivol. Still looking to get long something but either not finding stuff at REE or because of the high ivol, the r/r isn't there for me. Ideas welcome.

Whoever lit a fire under NILE, come gimme kiss... MMMM WWWWWAAAAAA!

Lovin it! (FINALLY!)

have a look at ENR

Also SIGM

AKS breaking out what about more SCHN at ree

sohu and flir

anyone know whats up with DW?

I see FCX consolidating but not at REE.

Jamie

Mahmood,

I would disagree that NILE is at REE...or I'd be taking the trade myself...and the sme for FCX...at least not what I LOOK FOR in a REE entry...

Thanks Raimo and Jamie,

I agree that FCX is consolidating.

as for NILE, I guess REE was at 92.2 and it was close to that this morning but moved too fast.

Raimo, please provide your read on where you thought the REE was on NILE.

I guess I am need calm my self down this morning ;-)

No Monster Java for me today :-)

OII looks like a entry day for those not already in. As for NILE I have horizontal support around 95,diagonal 92.50. If you're thinking about entering, I'd wait towards the end of day, this stock swings big.

In honor of my friends and relatives in Canada I took the weekend off! Those of you in NVDA, you owe me. The major move here is due to my purchase - the most expensive component in my new computer came from them. How can a video card cost more than state-of-the Intel chip set and mother board? I hope I am now back for good (Liz, sorry to hear you are having the same troubles) and no more computer troubles.

My account is very light right now so need to get some good trades going.

Mahmood,

Currently, NILE would have to retest my diag support line for me to get in...draw a diag line up from back in march, hit the low on 9/7, and extend the line. For ME, THAT is support, where i would get in.

Unless of course this bull flag breaks out....which it is having a tough time doing.

Lesson Learned...

In the spirit of sharing trading mistakes on this blog, I have a recent bad move to share.

Summary: Don't trade what you don't know...

I think I will add this to my rules.

I recently traded a put spread on CME. Bought a 590 put, sold a 600 put. Early last week I decide to get out of the trade and was successful in buying back the 600, but was waiting to sell the 590. I figured I could stem the small loss by holding for another day.

Well CME shot up shot up 25 pts, just like Jeff said it was going to (not the 25 pts, but he said it was ready to break out). I unfortunalty was away from the computer and now my position is almost worthless.

Here I sit hoping for it to go down. Thank god I was postion sized correctly and the other postions in my account are making up for the loss.

Hope by sharing, this helps someone else. Next time I am going to stick with want I know.

thanks
strat

BG is sitting at support for the third day. Looks like a good entry.
Barry

Thank you Jeff for BOBJ. Now THAT'S how I like to start a Monday morning.

Peter

AKS breakout = News that they just settled lawsuit.

James H.

Strat,

Remember, most hope when they should fear, and fear when they should hope. In your case, you should likely fear it continues up and you lose everything, but of course that is your call.

Who has some good bearish plays or patterns they are watching? I really want to get some put plays going.

thanks

Ben

BOOM is breaking out today.

James H.

Thanks Raimo,

I see the support line on NILE now.

I guess the problem for me was that the prophet charts had log turned on but TOS chart for some reason did not. I normally use log charts.

After I turned that on, thins became more clear.

Thanks. I am looking for the bull flag breakout

OIH and NOV look to be at REE today.

Michelle

COP near REE for POTENTIAL cup and handle play?

Any opinions?

COP does look like a potential cup and handle. The options look weird though. Not sure why.

Michelle

Is anyone in BOBJ? I am thankful for the jump today, but just want to understand the double earning report. Was the earning report on 10/7 always there? Now I see another report on 10/24. Any input?

Jenerica

AMZN is moving nicely today. Still looking for potential put plays.

Michelle,

I noticed that too. They look like they're priced funny, even though the strikes are on the up n up.

Raimo, Brett, Jeff, any remarks?

Ben an update...

I moved out of CME when it gave back 12 pts a few hours ago. Overall the loss ended up fairly small and I am moving on.

As far as a bearish setup, take a look at WHR.

thanks
strat

COP bought Burliongton Resources in April '06. The options with the LGS route are adjusted to reflect that. There still around because the were leaps.

Just ignore them and trade the COP route options...if the trade fits your rules.

Jamie

Jamie,

OOOOOOHHH. I see. Thanks a bunch!

MDC is at REE for a bearish trade.

Not finding anything truly compelling though.

WHR - Brett mentioned this as a bearish trade a few days ago. But, it went up for a couple of days. It is looking better for a put play, today

Potential bearish setup - YRCW

clean cups!