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September 29, 2008

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.

September 24, 2008

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.

September 22, 2008

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

September 18, 2008

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.

September 16, 2008

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

September 14, 2008

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!

September 12, 2008

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

September 11, 2008


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.

September 9, 2008

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.

September 6, 2008

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.


September 2, 2008

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.


September 1, 2008

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.