Short Euro, Long Dollar, Long Oil, Long Nat Gas

These are things that I am CONSIDERING taking positions in and out of.

I have been scalping the Euro on the short side, bouncing in and out, but I am not willing to hold anything for any significant period of time. It is just entirely too dangerous right now, especially coming into the end of the year. I made no trades today during the U.S open market hours, but I did make 4 Euro Futures trades between last night's currency open, and today's U.S. market close. These were all very small, only 1 contract. It's always good idea to slow your position size, entries/exits, and overall trading if you are going to participate during this period of the year. A lot of 'nonsense' takes place on the accounting side of things from Wall Street.

Overall its been a challenging year for traders, but the volatility has been something, which if properly respected, presented many amazing opportunities. I hope everyone has had a great year and is preparing for another interesting and exciting one in 2009!

I will most likely not be taking any major Index Option Scalps into 2009, my plan is to wait for things to calm down into some early year data, and the complacency that I believe will set in once President-Elect Obama is President Obama. Do not be surprised if you see the market trading lower a month from this post....

Regards,
Hawaiitrader

$RUT scalps, /6E scalps(EURO fx futures)

Aloha Nui Loa traders....

A few trades just closed up...My apologies for not posting, but it was hectic open, had to execute. Remember, our Zen/Samurai trader energy....Stay in the zone.


$RUT

RUW AZ 500 strike calls..
bought to open 20 contracts @ $21.20
sold to close 20 contracts @$24.20... booya trade. I could probably get a little more, especially with all the bullshit that the option writers are trying to get done today on the upside, but oh well. Profit is a profit, and that's a nice one. $6k in about 45 mins.

I also closed out a /6E futures scalp (Euro FX futures) . I had a short on 3 contracts from the break of the H+S pattern that formed and confirmed last night on the 1 min, 5 min, 30 min, and even the 1 hr chart. It was thing of beauty. With the currency trading, as of late especially, traders are finding the fundamentals which usually drive this market place are being given up for panic-book-squaring and massive liquidation/hedging by foreign banks and governments as everyone reacts to the quantitative easy and ZIRP environment. Expect further volatility throughout the end of the year. Things should become less PURELY technically based (currencies always are fantastic technical trading vehicles) an return to little bit more normal environment. What? 12 handle range on the EURO in 48 hours, that's not normal? I WISH!

Anyway my short /6E was taken at 1.4250 EURO and covered at 1.3970, 1.3960, and 1.3950. Very nice profit indeed, and we are on a bit of a run here, so I am super pumped that the weekend allowes for a natural break. As traders, taking breaks at the right moment can extend streaks, break slumps, and in general can be thought of as being similar to proper execution of entries/exits, but instead for your psychology. Do not ever assume that you can trade every day, all the time, and exercise a consistent ability to implement your edge in a way that is cold, objective, and unemotional.

GOOD LUCK!
Aloha...

HELLO TRADERS!

Aloha Everyone! I am back, refreshed, and ready to rock with plenty of new blog entries, trade strategies, and some interesting adventures into new markets. My apologies to all of you who follow the blog (its a small group of us!), the past two months have been extremely busy and challenging to say the least. Ebbs and flows, ups and downs, such is the life of a trader. I hope everyone is managing to do well, or at least hedge off portfolio risk during what has been a most historic period of time. In regards to my own trading, I am chugging along day by day, but I have picked up a few more markets than I have traded in the past, so I have been busy learning, researching, and trading. I hope we can all learn from these new experiences, as well as continue to do so with the core of my trading, option inflection scalping. Just wanted to let everyone know that there will once again be current updating of my ongoing trading, and definitely feel free to once again ask any questions via email!
Regards,
Nigel/Hawaiitrader

Uncharted Waters

Hello Traders-

I hope everyone was able to relax, get refreshed, and do some homework on personal finances as they apply to our current world-wide financial system collapse...This puppy is just getting started, and I personally do not like the sound of that. Global bank nationalization, a return to currencies backed by gold, and the continual printing of money by the Federal Reserve/Central Bank systems have my antennas on alert. I am in no way a tin-foil monetary conspiracy-conspirator (many have come out of the wood work lately to take credit for their doom/gloom predictions), but I do take this situation with the utmost of seriousness. Therefore, even if things do somehow unravel less than expected, and the world finds a safe and feasible way to maneuver out of this situation, I still have planned access to 5 years worth of funds needed to live. Everything else is available for market trading and other expenses. No matter the end game, it is always safe to have a plan. The same goes for trading.

Are you a RISK taker? Discipline, Risk aversion, and 'The Black Swan' (Taleb)

Do you consider yourself a taker of great risks? Not physical risks that could harm the body and or mind, but financial risks that come with the occupation of trading. Interestingly, most traders do not see themselves as risk takers, risk averse, or operating in ways that expose their capital and financial well being to events or situations that could cause serious damage. I find this to be very intriguing, and can admit that for the longest time I never saw myself as a risk taker. I was a disciplined, mechanical, thoughtful, and overly cautious trader who never did things out of order and never was the person to succumb to his or her emotional impulses, so of course there was NO WAY that I could be leaving myself exposed to serious financial risks, right? WRONG....

Although the aforementioned qualities I found within my trading were then, and still are today very important factors when it comes to my ability to be profitable over the long run, what I misunderstood for so long (learned the hard way, will expand further) was that risk simply comes with the profession of trading. There is no way to avoid the act of taking risks while being a trader. It is as simple as that. People may tell you that a computer model or some automated trading system has been tested and retested to show that there are zero risks, but you need only to hear such a thing to immediately know how incredibly false such a claim is. How could trading involve no risk? Even those with the utmost in discipline, the best knowledge, most professional strategies, and entire teams of researchers and trading psychologists to help gain edge (a trader's probability breakdown) have had experiences in the market that blew them up or caused such intense emotional trauma that their trading was never the same again. Probability and chance can be blamed for this, and nothing else. As the author Nassim Taleb writes in "The Black Swan" and "Fooled By Randomness", chance is the only true constant in the markets. The fact that anything can and will happen at any moment in time, should make a trader sit up straight in their chair, but instead ideas such as this are many times brushed off as "too rare for consideration". How could one be so incredibly naive, especially when money is on the line, to assume that their impression of wordly financial markets is somehow a safer bet than the undeniable fact that anything can happen to anyone at anytime? I really am not qualified to answer this question, but after reading Nassim Taleb, I believe he is definitely a great place to start. His books have offended many a great Wall St hedge funders, money managers, and big-time executives because most of these people have derived a great deal of pride and ego from the belief that their superior intelligence is the root cause of their financial success. In certain ways this is true, and should never be underestimated, but in other ways this can be fatalistic in that one can set themselves up for inevitable failure at any moment that the world decides to produce a chance outcome/probability expression that was not accounted for. After all, how can one account for the unaccountable? Simply put, you cannot; but just as simply, you can ensure that your trading takes place from the mental perspective that 'anything can happen at anytime to anyone'. Inherently, in my experiences and in my opinion, one's trading will quite mysteriously improve from this point forward. Do you need to still do the work required from a common sense perspective? Of course. Mechanical strategy, discipline, and emotional/psychological recognition and control are paramount in the search for consistent results.

Day Trading Series 2 of 5: Time Frame Trader

Aloha Traders-

What a market...Never a boring day, never a boring trade. We just need to get past the media ridiculousness over the 'bailout'. It's actually looking more and more like we are in such urgent need of passing this bill because foreign governments that own large amounts of U.S. debt (China, Saudi Arabia to name a few) have more or less refused to lend to us until we buy back massive amounts of toxic paper...But I digress, that discussion could take hours. Suffice it to say that whether or not our financial system is what pushes us over the edge, or foreign debt holders do, THIS IS A HORRIBLE STATE OF AFFAIRS...

So back to the topic at hand, our series on Day Trading. This will be the 2nd of 5, and today's focus is time-frame. The first piece of this series focused on position management and more specifically how your position status on the open and on the close effect your ability to be a successful day-trader.

Understanding and properly implementing the use of time frames in your trading, although only one cog in the wheel of successful speculation, can in many ways have the greatest effect on risk/reward. In my opinion, time frames and your exposure to 'time decay' in option premiums are really two of the most important aspects to look at. In my particular situation, my actual time spent 'in ownership' of whatever vehicle I am trading at the time is so small (5 hours or less) that the decay of option time value may not necessarily be effected unless we are very close to OptionExpiration, but the actual physical time frame in which I am executing the trades is of the utmost importance. I cannot stress how important it is to be able to use time frames on all levels in order to properly evaluate trade signals, macro trends, micro trends, etc, that may effect the direction of your open position. Even though I exclusively enter and exit all of my option trades on a 5 minute real-time chart, I am constantly evaluating potential daily ranges, open interest, and major support/resistance inflection levels that will come into play on weekly charts, daily charts, and sometimes hourly or 30 minute charts. When support/resistance inflection is used as a trading signal , or even a component of any system that is producing trading signals, looking at how these inflection levels come into play from a longer term perspective can be just as, if not more important to how my particular strike (price point of the option) is effected even within a 5 minute time-frame. Fibonacci Retracements (mathematical price flow fractal calculations) can also be used in any time-frame to help the trader judge a bit more objectively where prices may stall, advance, reverse, break-out, or break-down. Although I do not trade using Fibonacci Retracements in regards to entry/exit, I do overlay them onto my daily charts so as to have a structured view of major price levels, and the likely (NOT guaranteed in any way) retracements/advances that could come as a result of any catalyst. There is always the added benefit of many other traders looking at the same information when it comes to Fibonacci data, so while nothing is ever promised, a great deal of the scenarios put forth within this structure end up being 'self-fulfilling', so to speak. Still, I would never condone anyone making trades simply based upon these type or calculations.

Choosing the 'right' Time-Frame for YOU

I am a professional day-trader, but this does not mean that I can make consistent profits trading any vehicle, in any time-frame, under any set of circumstances, while using any strategy. This is just not possible in my opinion. There are a great many people out there who claim that any and all successful professional traders could assimilate to using any strategy and still have success, simply based upon their emotional/psychological mastery of that ever-fleeting 'thing' that makes consistent traders consistent, and inconsistent traders inconsistent. I do agree with aspects of this thinking, but I for one know that although my results show me to be a 'consistent professional trader', there is absolutely NO WAY that I could ever assimilate to someone else's strategy, trading style, and most importantly their time-frame, and become successful at it just because I have developed an ability to control/understand my emotions/psychology as they pertain to my individual trading. The ability to do these two things would definitely help me at having a better chance, and you know what, there probably are certain strategies that I could do this with, however it is my opinion that this ability would have a lot more to do with the ways in which my personal emotional and psychological make-up (consider it static, although through time they are mailable) mix with whatever strategy or methodology it is that I am trying to assimilate to. Many people believe that it is the ability to control your emotions and understand your psychology that all owes you to assimilate, however, in my view of things (and definitely in my own experiences) I must create systems, strategies, methodologies, and money management principles that are based off of my emotional/psychological make-up, not the other way around. So, in other words, I see it as almost impossible to change your emotional/psychological make-up so that they fit into the workings of any strategy or systems while I view the path of least resistance in regards to the effects one's emotional/psychological make-up upon their trading as one in which the trader much build their own trading environment AROUND these pre-existing realities. I hope that makes sense, email me if not. Anyways....The point of this paragraph is that because I personally believe systems must be created because of who you are, and not that you can become whatever you need in order to trade any system, I also believe that choosing a time-frame in which to trade is probably the most important aspect for having long-term success in the markets. To be more specific, I am speaking exactly about the time-frame one uses to enter and exit trades, not the ones in which you view the market place as a whole in regards to Marco trends or themes. Many people think I am nuts for trading a 5 minute chart, and I as well think they are nuts for trading an hourly chart. How could someone expose their capital to all of the unknowns taking place on every time frame under that hourly chart, and still succeed!!?? It is very simple, because in my trading world, it all comes down to personality, emotional make-up, and psychological structure. If your personality is more aligned with trading an hourly chart, than this is a naturally occurring alignment, and it not only should be respected, but taken advantage of. As Timothy Sykes (timothysykes.com) would say, "I have the patience of a ferret on crack". I am not that panic-stricken, but I must say, I have an incredibly short time-frame when it comes to entries and exits because this is just a naturally aligned fit with my personality, emotional make-up, and psychological structure. Now, I am not a psychologist, doctor, or therapist, but I know myself, as you should know yourself, too. We, as traders, are our best allies and worst enemies. If you see a friend or another trader using a certain time-frame or strategy that makes them consistently successful, it could be very enticing to piggy-back on what they do, yet the results are most likely going to be atypical to what your friend accomplishes, only increasing your confusion. There will always be exceptions to this rule, but as a standard, I never trade any time-frame outside of what I have objectively (hard to be objective about one's self) evaluated (open, honest evaluation is a must) as the one/ones that work for me and only me. Just like every trader who can stay in the game long enough to find a path towards positive consistent results; emotional pain, confusion, and frustration tend to define the period of experiences prior to this point in many trading careers. In Jack D. Schwager's "Market Wizards", in which he interviews some of the most successful and interesting traders of modern times, it is quite apparent that there is a common theme amongst their individual and unique roads to achievement, that being consistent failure in the beginning. However, just as common to each and every one of these interviewed traders is the fact that they have developed individual styles largely derived out of individual time-frames that in turn help to create strategies, disciplines, and methodologies. The interesting part of this, and perhaps as well that which proves the ultimate importance of choosing a time-frame that works for you and only you, is that upon reading Schwager's work or any other book about successful traders, the reader can almost instantaneously describe what time-frame is being used by a trader because, in my opinion, time-frames are similar to personality types in regards to what information one can derive simply from having that single piece of information. If you know that a person is a type-A personality, you may not be able to exactly describe who they are as a person, but you most definitely would have a good chance of describing what types of behaviors and emotions they experience as a result of certain situations. Equally, when a trader describes what style of trading works for them, the receiver of these facts can easily begin to derive time-frame information that is likely to in fact be what is used when it comes to that person's specific style. This is obvious for many reasons, but my point is that the fact that time-frames are obvious once someone has described their style, shows how universally important and ubiquitous time-frames are to the profession of trading. Time-frames have to be custom fit to the trader, not the other way around, in my opinion. Understanding this idea, and implementing it into your path towards success will undoubtedly open many doors to you as a trader. Please feel free to contact me with questions or requests for help in developing a time-frame and strategy based on the time-frame that works for you. Remember, there are no 'right' or 'wrong' time-frame when it comes to what works for you, and only you.

Trade Log 9/29

Aloha Traders-

I hope every one had a great weekend, coming back to the market rested and relaxed. It will be a big week, for obvious reasons, but these are dangerous times for taking bad trades, being undisciplined, and not objectively executing your strategy. Feel free to email me with any questions about your trades, setups, or anything else as we move forward into this mess. The 'bailout', which is in no way, form, or fashion enough to cause a lasting turn-around, or perhaps even to stop the bleeding, will most likely pass at some point this week and from that point we can begin to evaluate risk, prices, and volume. It really is too bad that things have come to this, and not to sound ultra-bearish, but this deal could easily push the U.S. government into further financial issues in the not too distant future. A rally through 2009 and a major crash in 2010 would not surprise at all if you end seeing a spike in commodities as many are predicting in relation to the path the government has chosen. On the trading side of things, technical analysis has been, along with all other forms of analysis lately, rendered useless in this environment. That is okay. This is why I use support and resistance inflection as my main form of trade entry/exit signaling. This strategy filters out the 'noise' in regular markets, but as well all the EXTRA 'noise' in markets such as this. Support and resistance truly represent the combination of price, volume, and emotion, which can give a properly objective trader the opportunity to enter and exit trades with a high probability of success or very acceptable risk/reward. Here is today's trade log. I exited two trades today, and completed one day-trade. I closed an option spread trade that I put on in the hopes that we would have a big move, one way or another (delta leveraged to the downside on my trade), and not only did we get one, but the delta directional leverage I was looking for showed up as well. Easy does it, chug along, day by day. Every little bit adds up. Trading in the morning should give clearer and cleaner entries, try to stay away from the middle to the end of the session, although close to the end may opportunities takes place as well. Happy Trading!

Here are 9/29's trades ( the first trade was opened at the close on Friday 9/26, and exited 9/29)

Buy 3 NDX Oct 1400 Puts Executed @ $4.60
Sell 3 NDX Oct 1400 Puts Executed @ $6.30

Buy 3 NDX Oct 1925 Calls Executed @ $2.00
Sell 3 NDX Oct 1925 Calls Executed @ $1. 00

(this was a strategic spread based upon anticipation of a large move for Monday, I didn't realize HOW LARGE it would be! I definitely missed much more than I made on this one. PATIENCE)

Buy 10 NDX Oct 1375 Puts Executed @ $8.70
Sell 10 NDX Oct 1375 Puts Executed @ $9 .00
(this trade developed fairly quickly, so I cut down my profit target, only looking for a very small move. This can sometimes be a great way to make consistent profits in a volatile market, as long as your patience is SUPREME and your entries/exits are smooth. Much easier said than done, but you will know right away if you are on the correct side of the trade.) All in all a profitable day, but frustrating at times. Can't complain though, it was a very tough day for most people out there.

Trade Log

Hello Traders-

Tuesday was a true 'no-bid' trading session, and we have really started to see this phenomenon taking hold over the last couple of weeks. Whether or not the government 'bails-out' the Gordon Geckos on Wall St., the economy is 'in for it' to a certain degree (nobody with a bow tie wants to admit this). What we are seeing right now in the markets is a classic case of value searching. The market is experiencing a great deal of emotionally charged trading, which will always present any trader with a challenge. In the end, the market will somehow and someway cleanse itself of any effects related to our current situation, but it's really going to take some time. Stick to what is working for you, look for higher probability set-ups (it's okay if this means not trading as frequently), and always keep an objective viewpoint of your emotional state. This is the typical trade that has been working for my strategy lately.

Trade Log:
Buy to Open: 10 NDX OCT 1450 puts @$7.00
Sold to Close: 10 NDX OCT 1450 puts @$7.60

This trade took some time to develop once it was put on, actually a bit more than I usually enjoy, but the JS Services pricemap was showing a strong signal and price/volume continued to respect their key levels. As always, the live SnP pit feed confirmed the engery of the trade associated with these price levels, and in doing so confirmed the trade signal.

Trade Log

Aloha Traders-

My apologies for the delay in updates, things have been busy in paradise lately! Yes, it is possible to actually become stressed out, despite living on a tropical island....

Anyways, I wanted to post my daily trade log. I took a solid #2 level signal (of a 1-3 rating system, 1 being the best), and was rewarded for being extremely patient. I was able to exercise a great deal of this patience as a result of the audio trade feed coming in from the SnP trading pit. Vetting trade signals by looking for an energetic presence in the the pit to back up signals given by the JS Servies PriceMap is a great way of reducing risk and increasing potential reward. When trading index options, leverage must be taken into account at all times, and while leverage is what creates great reward potential for traders, it most definitely can create just as much if not more potential risk if not properly implemented. Being a patient trader, and implementing the use of leverage (such as trading the NDX, SPX, or RUT full contracts) only when a valid trading signal is produced from your well planned, followed, and respected trading system will help to keep you on the 'right' side of the trade more often (assuming of course that you have done a proper sample size test for your strategy to determine its long-term validity over a series of trades). Patience, as a trader, is one of YOUR most important allies!

9/22 Trade Log:

Buy to Open: 10 NDX 100 Oct 1525's @$9.50
Sell to Close: 10 NDX 100 Oct 1525's @$10.10

Trade Log

Aloha Traders-

Here is my trade log for yesterday, and today. I will be posting an update to the blog today/tonight (HST).

Happy Trading.

Trade Log:

9/17: Buy to Open 20 NDX Oct 1425 puts@$7.20
9/17: Sell to Close 2o NDX Oct 1425 puts@$7.90

9/18: But to Open: 20 NDX Sept 1600 puts@$6.50
9/18: Sell to Close 20 NDX Sept 1600 puts@$7.00

This extremely quick scalping, targeting small price movements with an acceptable risk/reward ratio and proper leverage correlating with account size can be a more comfortable way to trade during the type of volatility as we have currently.

Day Trading Series 1 of 5: Are you flat?

Before I begin to talk about the first subject of the Day Trading Series, let me just say that obviously the last two days have been intense, to say the least, and I hope everyone has been able to practise disciplined trading. We look to have potentially found some support down here in the morning (Tuesday 9/16), so it will be interesting to see if we can get through the many emotional resistance levels above....

Day Trading Series 1 of 5: Are you flat?

I wanted to do a small series of entries on 'day trading', and its many forms, descriptions, and possibilities. I, personally, find this type of stuff fascinating so I hope everyone enjoys it. When talking about day trading, it is impossible to not consider what your account will hold at the end of the day. Usually, day trading requires that one takes 'a flat' account position into the close. There are several reasons for this, but the main ideas are just money management and trade management. There are some day traders that hold positions overnight, and there are also day traders who upon occasion will hold overnight positions in order to take advantage of a great trade. Personally, I go flat into the close on 95% of my trading days, but on the other 5% I will occasionally take positions that are showing serious potential.
One of the most important aspects of day trading is money management, and so the idea of not having ANY $in flow/out flow$ upon the open of the market each day is very important to many people because controlling emotional responses is much easier when you do not have to begin your last 'with losses'. This can cause irrational trading behavior, and bad decisions. You know, 'reaching for the money', everyone has done it at one point or another in their trading lives. So, ultimately, I would say that going flat into each and every close is a great idea, but if a fantastic opportunity comes along, do not hesitate to hold it overnight, just accept the risk and manage the trade with caution.
Trade Log:
I took a call and put position overnight from yesterday's close to today's open, worked well:
Bought to Open: 20 NDX Sept calls @$2.30
Sold to Close: 20 NDX Sept calls @$1.00

Bought to Open: 20 NDX puts @$3.80
Sold to Close: 20 NDX puts @$7.60

Wall Street Crisis, Risk Calculation, and Moral Hazard

And so the story continues, as we find out that as many had expected, Lehman Brothers was in such horrible financial shape that nobody was willing to buy them. This, of course, was exacerbated by that fact that the U.S. Government refused to back-stop this deal, as they agreed to do in the case of Bear Stearns, Freddie Mac, and Fanny Mae. Why would they refuse? There was no other option. Behind closed doors, for weeks, many people spoke secretly on Wall Street about the potential that Leman Brothers was in such bad shape that even the government would not be willing to back-stop something that was inevitably a losing deal for tax payers. Then, minutes after the news that Lehman Brothers wouldn't survive, Bank of America and Merrill Lynch announced a buy-out deal that values Merill Lynch at around $29/share, or approximately $44 billion. This is a 70% premium to Friday's close. The interesting caveat to this scenario is that rumors are being floated around that federal regulators forced Merrill to begin shopping itself, culminating in a deal this weekend. It really doesn't matter, but what does is how this is going to effect world-wide financial markets going forward, and especially U.S. government credit around the world. We are now left with WaMu, AIG, and Citigroup as the 'ugly-red-headed-step-children' of Wall Street. Many have speculated that those in the bear camp will attempt to raid AIG and Citigroup even further this week, as they did Bear Stearns, Lehman Brothers, Merrill Lynch, IndyMac, Freddie Mac, Fannie Mae, and Washington Mutual. To help in anyway possible, the Fed now says it will now accept 'low quality' assets in return for government loans, or in other words they will take horribly effected equity positions and other no-bid, no promise 'assets' in order to execute emergency capital exchanges. At some point, the U.S. government becomes a serious issue in regards to its own credit, its own balance sheet, and world-wide worthiness as a financial business partner going forward.

Calculations of risk obviously failed, but it is important to look at these issues in combination with moral hazards going forward. It is impossible to plan for every and anything, but to be leveraged 100:1, 75:1, or even 50:1 is just INSANE. What is even more insane, is the fact that many, if not all Wall Street firms use and or used this type of leverage on a regular basis. Great when things are going your way, almost so great that the potential for disaster seems to become a distant worry, but in the event that anything turns against you, things happen so quickly that being so highly levered makes getting out of the way impossible. Interestingly enough, a great many quantitative models designed to run millions of scenarios based upon investing inputs decided upon by these firms when testing, came up with these exact scenarios, yet the degrees to which models showed them as 'possible', really didn't even make a blip on the radar. Obviously, firms do these tests in order to design protocol and risk management strategies for situations more likely to occurr, but there MUST be a plan for the worst case scenario, and in my opinion, many of these firms did not adhere to this fundamental investing rule. ALWAYS HAVE A PLAN, and especially, ALWAYS HAVE A PLAN FOR THE WORST. It is not clear yet (it very well may never be clear) whether these firms saw themselves as 'too big to fail', 'too intelligent' to fail, or just took the very humanistic approach of 'this cannot happen to me/us', but ultimately there was a disconnect between percieved risk, regulation, and internal firm responsibility to clients, employees, and the financial system as a whole. Ultimately, leverage ratios reached such enormous levels that when these disaster scenarios came to pass, what was created was such an intense gearing to the downside that when rumors began or clients wanted their money, the chain of events did not allow time for any planning, adjustments, or capital preservation. Admitedly, this period will go undoubtedly go down as one of the most infamous Wall Street implosions, so I do not speak on these issues as though they truly could have been altered to any great degree, but I simply want everyone to learn that for their OWN trading, having a disaster plan is always of great importance. So, plan or no plan, over confident or not confident enough, this is what happened to the firms experiencing disaster scenarios right now. Many of them, even if they had wanted to (and they did!), could not have avoided this end game, greatly coming as a result of poor planning and continuing to pretend as though everything was okay. Do you remember how many times Lehman, Merrill, Bear Stearns, Citigroup, WaMu, AIG,etc, came out and said things like 'we are well capitalized, our balance sheet is strong, things look good going forward, and on and on? There was this idea that financial firms simply needed just a little more time to get out of the woods. The entire 'mark-to-market' debacle in which these firms finally had to value many of their assets (which had inflated, old valuations) at true, real market value (most of the time this was pennies on the dollar), finally put a nail in the coffin for the 'wait out the storm' idea. And so, alas, this passing moment never came, and although this 'hide your head in the sand strategy' has worked many times in the past, just as in trading, bad decisions that are rewarded at times, end up creating the potential for major disasters at some point in the future. Well, that time is now, and at some point as Americans we must hope for the best of our financial system. As a trader, I will do whatever I can to exploit the situation for profits, but that's because it is my job....I have some out of the money put contracts on the NDX 100 that I expect to sell on the open, but depending on the action, I may keep them for further downside later into this week. It is OptionsExpiration as well, so on top of everything going on right now, this only helps to contribute to the volatility and potential nastiness of the markets.

Good Luck This Week Traders! Be careful, lots of head fakes, expect the unexpected, and trade as though you expect the completely 'impossible' to happen at all times. "Think like a criminal". What would hurt the most people, most of the time? This is something I ask myself on a regular basis, and although you cannot trade solely based on this idea, it helps to keep proper perspective. Nothing is for sure, and nothing is promised. Discipline, discipline, discipline. This is not a bad time to take a break from trading if you are worried about what to do. Being in cash is NEVER wrong, don't let anyone tell you that it is.
Aloha, and talk to you tomorrow!

Markets never repeat, but they OFTEN rhyme...

Hello traders, I hope your week was profitable, and at the very least you were able to exercise discipline in a market environment that has and will continue to test the best of traders. In an environment like this, where rampant price manipulation (mostly financials), 'news' leaks, false stories, and misrepresented economic data reign supreme, trading the indices makes things a little bit easier in certain ways that stocks do not. Although the indices are obviously tied to each an every equity in some form or fashion, the movement of the indices is not solely based on the news, data, or movement of one stock or sector, but instead many all at once. There have, however, been days lately where the financials have dominated trading, just as oil and gold were able to do several months ago.
The title of today's post relates to several aspects that traders must keep in mind if they are going to participate on a daily basis in this type of environment. The first is that the market almost never repeats itself, but it most definitely rhymes quite often with what it has done in the past. This is not to say that it would be a safe bet to put positions on solely based upon time symmetry and or candle chart patterns, but these are most definitely aspects that can help to fill in the wholes in your trading thesis. A lot of big time technicians, market crooners, and so-called Gurus, are beginning to dip their feet into the 'CRASH CALL SCENARIO'. Not only do I think this is reckless, and self-satisfying, but I also pay no attention to this WHATSOEVER. How can this help my trading? It cannot, all it can do is allow my emotions to begin to alter and shift the ways in which my mind perceives the information that the market is sending, or in other words, the data that I need to be able to perceive objectively in order to make high probability trades that reflect my strategy's rigid methodology. Okay, well what about taking positions JUST IN CASE a crash does occur, you say? I condone one and only one form of such gambling(that is exactly what it is), and that would be to take one to two positions WAY OUT OF THE MONEY, expecting ZERO return, and being totally comfortable with the fact that the most likely outcome is losing your entire investment. The most important part of doing this is that if you lose your entire investment, it should have no effect upon your ability to continue to trade, both fiscally and emotionally. Such plays are called "lotto tickets", and rightfully so. Now, I have had several lotto tickets in the past that have ended up being very large winners, upwards of 10x-20x the original investment, but for the most part they have ALL been losers, and have all ended up as big fast ZERO's. So, ultimately, the point is that many people would love to see the market crash, and potentially just as many would like to see the market rebound and bottom. It is just impossible to fully quantify such data in a manner that makes it tradeable, at least responsibly tradeable, so the best idea is to forget about these attention grabbers and take a few lotto tickets so that you do have exposure in the event that something like this occurs. I do agree that it is always a good idea to have some exposure, very limited at most, to a scenario like this since it does not happen that often and yes, can be extremely profitable. My main point is simply that as a trader, you should not focus on such extremes, since they really are the exception and not the norm of daily trading.
Today's trading environment was similar, and rhymed with several of the others this week in that it screams 'indecision'. The SnP 500 has been able to form a short-term base since we touched 1212.25 intra-day on the SnP Futures, but the last three green days have had decreasing volume in compared to the previous large candles from the start of this week and end of last. This tells me that not only is the market indecisive, but there are more participants making trades when the market is threatening new lows, then when it is trying to base and move higher. All of this is short-term, of course, so things can change at any moment for any reason. This weekend is going to be very interesting, with potential deals for Lehman Brothers going on, WaMu take under rumors, and a continued focus on whether or not the market can hold itself together. In my personal opinion, which I never base my trading on (outside of the limited lotto ticket exposure previously spoken about), I would expect there to be another couple of 'straws' coming this weekend, and next week, yet the question remains 'which straw will be the one to break this camel's back'....Have a great and safe weekend, and good luck next week. Stay on your toes!

Today's Trade Log:
Today's trading was very similar, if not exactly matching, yesterday's trading. The reason is that the environment was also very similar, and I found that my best option was to take a high-probability entry (had to wait 90 minutes to get it) and use a larger than normal position size while at the same time cutting my normal profit target for such a high-probability signal, in half. As described the other day, this allows me to profit in a similar fashion as on normal trending days, but limit my overall exposure and risk due to very patient trade execution, and a smaller profit expectation (exposed for less time, need a smaller move in a my favor).

Buy To Open: 20 NDX Sep 1700's PUTS @$8.50
Sell To Close: 20 NDX Sep 1700's PUTS @$9.00

9/11/08

Let me first send my thoughts to all of the people involved with 9/11, let us never forget on this day of the year.....

Well, I am officially back from vacation to the mainland U.S., and am ready to rock and roll. For those of you that are following along, or have been waiting for responses to emails, thank you very much for your patience. Things are now back to normal, and I will be returning my regular schedule.

I made one trade today, based on the R-Level reversal indicator from the JS Services pricemaps. Today was a fantastic lesson in patience, and allowing 'the market to come to you'. One of the MOST important aspects of trading support and resistance is patience. These significant levels act in many ways, but they can be deceiving, causing the trader to jump and be early if emotions get in the way. Do you ever find yourself feeling anxious or nervous in anticipation of a trading signal that you perceive to be setting up? I know I do, but I also know that it is quite normal, and very controllable. Half the battle is simply being mentally objective, recognizing this emotional signal, and adjusting your mental energy so as to compensate for whatever potential errors in judgement might arise as a result of falling victim to such an impulse.

Today's trade log is as follows:

Buy to open 20 NDX Sep 1675's PUTS @$6.50
Sell to close 20 NDX Sep 1675's PUTS@$7.00

This trade was extremely short, since the market was really whipsawing and in a sort of digestive trading mode. I expect significant range movement in the next couple of days to weeks, especially when you see several days of consolidation/'spinning tops' candle bodies on a chart. Take a look at the daily charts for $SPX, $RUT, $NDX, $DJI, and you will see similar trading patterns for the last several days. Something is brewing, and most likely will result in a significant move which should direct the next couple of week's trading. Financials, FDIC involvement, FED issues, Treasury issues, and a litany of other market influences are causing a great deal of uncertainty and pain on Wall Street, expect a reaction, and be on your toes! In environments like this, I LOVE scaling into and out of positions, and taking very quick profits. If you trade for a living, you must make money to survive. There is most definitely a difference between letting your winners run and taking profits too soon, but nonetheless, there is ALWAYS something to be said for paying yourself along the way as the market makes money available to you. I bring this up because my trade today speaks directly to this issue. When I perceived that today was likely to bring a great deal of up/down movement in a tight range(we did eventually breakout for a small short covering rally), I set up my trade entries/exits with this in mind. I took a larger than normal position of 20 contracts, but I used the same signals, methodology, and information that I always do to make trades, keeping in mind that I was going to take profits as the market made money available to me. Using a larger position size in combination with a normal position size strategy requires emotional control and discipline, but in the end will handsomely reward any trader following their rules properly. Realizing that it would likely be dangerous to look for a several dollar move in regards to the value of my option's price(my normal profit target), I doubled my position size upon receiving a high probability trading signal and made sure to cut my normal profit target in half. What this allowed me to do is remain calm and centered, not responding to the fact that I have a significantly larger than normal position trading, and only concentrating on the information the market is putting out in regards to whether or not my trade is working. Let me also say that I only use this strategy when there is a combination of certain market conditions (as they were today) and my most reliable (on a probability basis) trading signal. All of these factors come together to create a trade that is rigid, quick, low-risk, and substantially profitable if and when the market moves in my direction. I normally would limit this type of trade to a 5-10 minute span in which I allow the trade to develop. If nothing comes together, I cut it, and move on to the next signal. In this case, the market took about 6 minutes to move in my direction, upon which I closed the trade, and was done for the day. I left money on the table, but I didn't take a whole of risk and I didn't become greedy, so the fact that I did have a nicely profitable trade in this trading day's particular environment is very positive.

Trading Rules, to follow, or not to follow?

Aloha traders, this is my final day writing and trading from the beautiful city Emerald City of Seattle, WA before I return to Hawaii from vacation.

I wanted to post an entry focused on personal trading rules. This comes to mind as an important topic for several reasons, but most recently because of the trading rule that I broke yesterday, causing me to loose focus and in the end, money. After all, trading is ultimately about coming away from the experience with hopefully more money that we started with, but also a healthy frame of mind and outlook on life. Trading is not the be all, end all that many traders seem to equate it to, however it is very difficult to not work from this point of view if each and every tick, and each and every dollar that goes in and out of your account creates an emotional response within your mind and body.

I have always had a general rule, among all the others that I use for daily trading activities, that essentially there should never be any reason to trade while connected to the market via "wireless internet". Why? Well, there are many different reasons, but the one that matters most to me is money management. The greatest influence upon my daily money management is the flow of the market, as it should be, however the potential for a loss of signal while trading makes this virtually impossible to trust in the fashion necessary in order to trade objectively.

That said, it must be noted that after breaking this rule and paying for it yesterday, the lesson I was able to reinforce is greater than the cost to my account(well within my allowed loss limit), as it should be because lessons like this are the ones that help a trader become consistent over the long haul. Even more ironic, had I been using a direct connection, I would have actually had a fairly nice profit on the day, yet when I went to close my position the internet connection immediately died(of course), and by the time it was good to go, I had missed the extremely delicate exit that I had required. All in all, a great lesson to have reinforced.

Aloha from the Northwest and a bit on market objectivity

Aloha traders, greetings from Seattle and currently Hood River, OR. I will be out of town until September 10th, and will not resume normal trading activities until September 12th. I may, however, put a few posts up in between now and then. I was able to make some very successful trades this past week, and WHAT A WEEK it was. Remember, this market is extremely unstable, volatile, and of course you do not need me to tell you this, but it is unpredictable as well. The best part about all of what I just mentioned is that it does not matter. How could that be, you ask? How could the movements of the market not matter to my trading? Well, honestly, it is not as simple as just that statement, but in one sense it is, because you success as a trader relates entirely to objectivity and probability within your trading edge. Many people will research until their mind is numb, but where does this endless search for 'how to be right' take you? In my opinion it actually reverses any potential advancements one may make in their trading at one point or another, simply because when things are working, many traders take it upon themselves to all of a sudden become more subjective, and inherently less objective which masks one's ability to asses their trading edge in such a way that consistency and independent thinking become far out of reach. The most important aspect of being a successful trader, is the ability to control one's emotions, thoughts, and as a result of these effects, control the result. This in no way means that you can control the outcome of each trade, because to think this is to think that one can KNOW what the market will do next, but controlling what you CAN control, such as, emotions, thoughts, and physical behavior will ultimately put you, the trade, in control of how you implement your edge. This is the only way to determine whether or not you have an edge on the market, as testing your strategy over a period of sample-sizes is absolutely necessary. I bring this ideas of objectivity and controlling behavior to this blog entry because these ideas can transform your trading. Imagine what would have happened, and did happen, to many traders this past week who were objective, did not control their emotions, allowed their thoughts to influence their behavior, and ultimately took trades based upon subjective, pointed evaluation of what the market WILL DO. So, if you were one of these traders, who bought into the 'breakout' two Fridays ago, I truly hope that your stops were tight and the losses were cut quickly. Without objectivity and emotional control, it would have been almost impossible. Its not your fault, it is being human. But it is avoidable.

Aloha.

September trade is Finally here!

So the Big Boys are back in town, huh? Sure seems like it. Back to the good old ramp job, dump shares on doctors and lawyer, then smash it down to the short side for a nice technical set-up.

I made two trades today, listed below. I do have several 'thesis' positions, very limited risk, very high potential reward if this final wave movement downward in prices gets underway in September. Otherwise, I will just roll the positions over. Okay, enough about positions, how about the day trades!

The trades were a bit frustrating because they developed in an anxious manner, and lately, I have had a knack for being 10-15 minutes early, but definitely on the right side of the trade. What this does is pit me against my mental state, a delicate ballet of energies being thrust back and forth as price moves along. I took the most reliable signal that my PriceMap's from JS Services (jsservices.com) gives, which is the R-Level trade. Essentially the trade works in two, and only two ways. It all reacts to a price cluster that changes day to day, which represents an emotional/psychological level on the chart for many participants in the market. I do not know the exact calculation because this data is proprietary to JS Services, of course, but it incorporates many aspect of market influence into these inflection points. So, in theory, the R-Level is a price point that IF reached, will most of the time create a large intra-day reversal making that price the HOD (high of the day), or if the market is very strong the R-Level will act as a vetting process of price, sort of proving the momentum is real and giving price a catapult to the next major resistance band. Today's play was the classic R-Level reversal.

Buy to open 5 NDX 1850 puts @ 4.60
Sell to close 5 NDX 1850 puts @ 5.50

Buy to open 2 NDX 1700 puts @ 1.45
Sell to close 2 NDX 1700 puts @ 1.65

Paid the bills today, and that's all that matters. I will be on vacation most of this week, but I will be checking in from Seattle, WA and possibly putting on a few trades if they show themselves to me in the proper energetic flow. Its all about energy for me.

Aloha!

Haters and Emotional Trading V 2.0

Haters come in all form and fashion. Never let anyone or anything come in the way of your ability to trade from an emotionally neutral position. This is the ruin of almost every trader, yet it is entirely in their own control. Remember why most haters act the way that they do...Most of the time they are unfulfilled, unsuccessful, and unprofitable. That would explain a little bit about where they come from, but the rest of it is caught up in some deep recess of their being.

Trade your edge, not your emotions.

Emotional Trading

Teach yourself to trade without emotions, rigid expectations, or the need to be 'right', and the key to consistent profits will fall into your lap.

Honestly, discussion and debate are wonderful aspects of the human condition, but most traders need to stop worrying so much about something that they cannot and will not ever be able to know in regards to positions they take being right or wrong. I know how that sounds.

Stuuuuuuupiiiiiiid, right? Wrong.

Nothing could be more beneficial to your trading than realizing this simple fact about the market. ANYTHING CAN HAPPEN AT ANY TIME. How does one define that statement? In terms of probability, is how.

Probability is roughly defined as: "The likelihood that a given event will/will not occur in regards to the number of times a given event takes place." Translated, probability is simply a reflection of how likely one outcome is than another, given the amount of times a situation is allowed to play out. For example, with a coin flip made 10 times, the resulting number of times the coin lands on heads/tales could be very different than if the coin flip was made 100 times. Probability has a random distribution over the short-term, however, when 'EDGE' (that one probability has a slightly higher likelihood of occurring than another) is applied to the equation of probability over the long-term, this distribution of probable outcomes begin to show a certain amount of consistency.

Think about a casino and the game of black jack. Does the casino micro-manage each game, biting their nails at the site of a player who goes on a winning steak? NO WAY! But why?

It is very simple, and if a trader can apply this same methodology and psychological framework to his/her own trading, success will most definitely be the reward over the long term. The reason the casino does not freak out over each 'tick', as many traders do (causing them to get emotional, get shaken out of a trade, or take unnecessary risks)
If you try to predict a coin flip, are you pissed off when you are wrong. NO. Why would you be? Its random, after all.
Wellllll. So is trading, but so many people believe the opposite and continually attempt to find information that supports their point on view. Why? Because your point of view is based in beliefs, which are based in your emotions, which are based in your expectations, which IF NOT met will cause you tremendous emotional pain. But back to the coin flip....
Why wouldn't you be just as pissed if you tried to predict the coin flip? Because your beliefs, emotions, and expectations are not attached to a point of view! And they are not attached because you were taught LONG ago that coin flips are random in occurrence.

If you can control your emotions and fully accept the idea that trading outcome has a random distribution between wins and losses in the short-term, but instead begins to show consistent results over the long-term when applying your edge and taking EVERY trade that is signaled by your edge, the success will far outweigh the failure.

Market Breathing

Well, it was just too much too fast. Right before Labor Day, this is a perfect day to unload positions. Everyone comes back fresh and rested next week to start the real trading season off once again.

I made one trade this AM, and I am now done. I have a few OTM puts on the NDX 100 contract, that I will now hedge for a move higher on this current retrace we are in. The calm before the storm, IMO.

Trade Log:

1a) Buy to open: 1 contract, PUT NASD 100 IND SEP 1825CBOE 09/20 @16.60
1b) Sell to close: 1 contract, PUT NASD 100 IND SEP 1825CBOE 09/20 @17.80

8/28 trade log

I made two trades today. I entered the first a bit early, which was a mistake based on letting emotion get the best of me. NOT ALLOWED. I made my second trade after clearing my internal energy and accepting the risk of being wrong, and nailed it. I took profits in stages, first 5 and then the second 5. Ended the day with a healthy profit.


1a ) Buy to open: 5 NDX SEP-08 1825 PUTS (NDYUG) @ $16.80
1b) Sell to close: 5 NDX SEP-08 1825 PUTS (NDYUG) @ $16.00


2a) Buy to open: 5 NDX SEP-08 1825 PUTS (NDYUG) @ $13.60
2b) Sell to close: 5 NDX SEP-08 1825 PUTS (NDYUG) @ $15.50

Supply and Demand, Index Options, and "Gut Feel"

Supply and demand are often overlooked in regards to the extremely simple and straight forward impression that they give a trader of what exactly is happening within a particular market, during a particular time frame. Monthly, weekly, daily, hourly, minute, tick, it does not matter. Supply and demand operate as a input that constantly acts upon prices, volume, and momentum. A great deal more can be said about supply and demand, especially in regards to the specific influential effect that each has on the other, on markets, on prices, on theories, on actions, and most importantly on trading psychology.

The reason I bring this up today is that when it comes to my own personal trading psychology, being able to recognize days that the market is clearly offering me, my edge, and my strategy opportunities with acceptable risk/reward is of the utmost importance to not only keeping my money in my account, but hopefully adding to it. Days and in particular weeks like the one we are having right now, speak loudly in regards to the effects of supply and demand on a market place. I did not make one trade today, and there was a very good, yet simple reason. There were no setups. If there are no setups that fit my style, then no trading is necessary. I tend to observe market behavior on days like this instead of trading simply because they do not fit my strategy, but it became increasingly clear that what was taking place today, and in my opinion has been taking place over the span of this week is a classic case of no supply in tandem with very basic demand. What does this create? Well, in this case you get a market that seemingly 'floats higher' all day for no real reason, not to mention how much easier to accomplish this is when volume is light as well. People are paying up or paying down, hitting the bid, taking the offer, whatever side they want to be on. This scenario can be reversed as well with lots of supply and no demand where the market just floats lower, or a 'no bid' scenario. The keys are impulsion, volume, and in effect momentum. Right now it is difficult to make a real call on what is going on, because obviously the only people that do are liars, but what you can do is look at elements of the market such as supply and demand to help you find the right side of the trade to be on.

When trading options as I do, especially on the indices, you will find many times that small moves in one direction greatly effect prices, while similar or even greater moves in the opposite direction have little to no effect whatsoever. This is a function of several dynamic effects. The first is that in every trade there is ALWAYS a side with edge/bias in its favor and there is ALWAYS a side with edge/bias out of favor. Simply put, one side is making money while the other side is losing it. Obvious enough. But why? Well, again we come to the effects of supply and demand, which illustrate groups of traders believing something should go higher and another group of traders believing something should go lower. If something is in great demand, most likely if not always, there will be a lack of supply that makes the 'market value' of that 'something' appreciate. The inverse is true as well on the downside, where it is supply that is great and demand that is weak. Index options move with the market in regards to their appreciation/depreciation, but there are a great many mathematical influences as well which I really want to stay away from for the sake of this discussion. Generally, these influences involve the effects of gama, delta, vega, etc. When I am trading, I can often 'feel' for lack of a better word the premium bias as these strikes trade so that it becomes ever-so-obvious that my reasons for taking the trade are validated, or rather invalidated in the case that the premiums respond to market movement in ways that do not seem equal and opposite to what takes place in the premium of the opposite position, same strike. This could be a bit confusing, but it is rather straight forward and can be seen clearly after trading index options for a while. It is most obvious right as an overwhelming large group of market participants have gathered on one side of the trade or another. This tool of perception can be used as a function of the right side of your brain, the creative side, to give the trader that 'gut feeling' about whether a trade is working, will work, or should be exited immediately.

Happy Trading!

GSE hype, Treasury denials, August volume, and an interview with TraderInterviews.com

A quick note, anyone that wishes to hear my interview with traderinterviews.com can just click the title of this post, it will direct you automatically. Otherwise, click the link found in the text below.....

And so we march on......

Well, well, well, it was a day full of 'CNBS' hype, as usual, no surprise there. CNBS actually was so busy pumping the markets that they forgot to mention that the U.S Treasury categorically denied the GSE bailout rumor. They did end up featuring a Treasury official, who reiterated that no plan is in the works to 'bailout' or A.K.A stiff the tax payer for billions if not trillions of dollars so that high level officials and greedy Wall St. types can continue to live in the Dream Land known as the Financial Industry. HOT damn I love not being a bear or a bull, but instead an index inflectin scalper who trades the tape as it is, unadultered, pure inflection scalping. The beauty of this style traders is that you no longer need to 'care' what the market does, you only need to analize what side of the trade you need to be on. Alas, I digress to a bit more bitching... (you can find my daily trade log for today's session at the bottom of this post)

I really dislike market chit-chat, analyzing news stories, and anything like that which attempts to confuse my centered Trading Zen Zone. I swear, the LESS news I focus on, the less stories I try to understand, and the more I just focus on the volume, price, and emotional inflection points of the index options I trade, the better off everything ends up.

Index Indecision

I didnt make a single trade today, outside of picking up a few contracts on the close for tomorrow. The market was acting a bit indecisive, and appears ready to make a directional decision here in the next couple of days to a week. Since I trade the NDX 100 options for a living, I need excellent entries with limited risk and a clear "I'm wrong" point. Didn't find that at all today, and I missed a few early possible entries only to be glad that they were not taken since a lot of whipsaw action took place.

Not much doing today in regards to the overall market, but this is not surprise. Slow day, as expected all this week, with little in the way of 'big boy' volume since everyone is still out in the Hamptons or the Jersey Shore. Things should really drop off in regards to market action over the next couple of days, however, next week will bring a great deal of 'sizing the market up' type of action from the participants that have been on vacation all summer. Personally, I expect that being defensive and not committing a great deal of risk capital to any one thesis, position, or sector would be a great idea at this point. Since I always try to remain as flat as possible at the close of each trading day, I will continue on as always, but if something does happen to come along that points to a bit of momentum, whatever the direction, I will hop on with a tight stop. 1260 on the S&P 500 is still a major inflection point going forward, and it is hard to see any continued downside without an impulsive break of this level on volume. That said, a test of the July lows does seem increasingly likely. The beauty of my strategy is that I couldn't care less, just give me momentum setups at key support and resistance levels and I can eat.

Currently I have several 'lotto' position plays in the options market, but these are less stratgey based than they are purely taking advantage of Very, very, very cheap plays that give me insurance if and when the market decides to fall off a cliff to test the July lows. In total, these cost me less than $600, and in an ideal situation could produce upwards 10x return. QQQQ's 43 puts, and $NDX 1650 puts.

Unless something great comes along this week, which is not likey due to the historical lack of participation at this time of the year, I recommend keeping your powder dry on initiating new positions or trades until next week. However, as I always do myself, keeping risk capital exposure to only a day trading time frame when the market is lacking full-participation, can save a lot of time, energy, and stress. It's the last push of summer, enjoy it. The Big Boys are back in town next week, and with their return will comes big moves in the market.

Aloha!