We hit profit goals on another trade Friday, with the August540P hitting near our top profit goals of 1.40 per contract, as the market whipsawed and reacted to bad economic news.
First, a comment technically from the street last Thursday evening:
"- As U.S. stocks enter the month of August, Friday's July jobs report may provide some needed upward momentum for this traditionally-slow period of the year.
"Tomorrow's jobs report is going to be critical" for the market, said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
It's not that the market expects employment to have rebounded, pointing to an economic rebound.
Instead, investors have been increasingly betting that enough bad news -- from ailing financial firms, to the slumping housing market, and surging oil prices -- might have been priced into stocks for now.
"You can rally in here because we're extremely oversold," Mendelsohn said. "We're still in a bear market, there's no question about that, but technicals are pointing to a short-term bottom.""
Floyd believes the market has been in a recession since last October. The market is RIPE for euphoria, and continues to try to find something good (there is little) in which to build a bull momentum.
But, a word from one of the primary idiots that got us in this mess, first:
Without a doubt "Bubbles Greenspan", the famed economist who actually led us on the housing path of destruction, has shocked even old Floyd with this:
July 31 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are ``nowhere near the bottom'' and the resulting market turmoil isn't showing signs of abating.
While the odds of a recession are 50-50, achieving stable markets will ``take a while,'' Greenspan said today in a CNBC interview.
Floyd-the economy has been in a recession since last October. Housing prices are crashing because of easy money, free credit, and no controls. The government (Clinton first, then Bush) led the bubble to keep the house of cards up. At least Clinton used the government surplus from the bubbles to balance the budget. Bush spent more than we had. And continues to.
Congress and Bush continue the babble of further tax stimulus packages, when in reality, these have NOT been tax cuts, but simply a shift of asset taking to other avenues. "I will not raise taxes" mantra that we read and hear from political candidates is a LIE, or blind stupidity. The Middle Class, who pays for it all, are paying MORE in taxes and outside costs now than ever before, NOT less. The levying of taxes is simply different.
From a level 3 trader, MP, that is learning himself, I'm copying a complete email from last Friday, with a comment that this trader, despite failures or successes, is learning to trade:
"Hey Floyd,
I hope you had a good day on Friday....I had a day packed with lessons learned.
I am ashamed and embarrassed to write about what happened today. But I feel like if I don't tell you what I did today...my whole trading career may spin out of control.
Let me preface by saying that it has been 1 week since you suggested that I try my new system of trading. My plan was the following:
1. When playing strictly off the alert...I was going to keep my purchases to 1-2 contracts (1st buy..depending on price) and 2-4 contracts for the second buy. since I have limited capital (30K) we felt that trading small contracts and looking for quick profits was the best way to begin.
2. I discussed my desire to make $500-$1000 per day and that using more money to trade (5 contracts up to $5000) but keeping my stop loss at 1.00 max ($500) would give me the best opportunity to make a quick .50-1.50 each day. You told me that many people try to make a quick 50 cents (scalp) and then get out of there. It is a good way to make a living. HOWEVER...you recommended that I practice this method for at least 1 month on paper...So far it has been 1 full week.
Here are my results thus far:
Day 1...last Friday...2 for 2 Trades $750 profit
Day 2...1 for 3 trades...$150 profit
Day 3...1 for 4 trades...-$550 LOSS
Day 4...5 for 5 Trades for $2100 profit
Day 5...4 for 6 Trades for $750 profit
TODAY...Day 6...SIX for ELEVEN TRADES...for -$350 LOSS
Over the past six days...since I've started this new plan...I've placed 31 trades and won 20 of them..that is a 64.5% winning percentage and a total profit of $2850 profit...in 6 days...which averages to $475/day
PROS
* I'm making money...and as far as I'm concerned...that is pretty good money for a new trader
* I'm learning something new about myself and about the market every day
* For the most part, I've been placing pretty good trades...what I mean by that is that all of my winner were pretty good trades...not just lucky...and some of my losers were even pretty good trades that just didn't happen to move in the direction I anticipated. I'm not just blind guessing here. MOST of the time...there are legitimate reasons for my entering a trade
* The cons are forcing me to come up with strict rules for scalping.
CONS
* I think I am working way too hard for $475/day...what I mean by that is that I feel like I am placing way too many trades
* I have entered some trades when I was not right mentally or emotionally
* I've traded compulsively...especially last Friday
* I've traded when I was angry, prideful, fearful and greedy...it has caused me to lose and if I continue to do that...I will lose it all
* I'm having trouble picking exit targets...I could have easily made more money if I would have took profits differently
* I'm struggling to stay calm...my highs are too high and my lows are too low.
* The compulsive trades, coupled with losses, has negatively affected my disposition which has not proven good for my family
I'm working on some strict rules and/or guidelines to help me take the emotion out of my trades which will hopefully keep me calm and disciplined...any suggestions would be greatly appreciated.
I'll let you know what I come up before I begin my second week of practice.
Thanks Floyd,"
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