Day Trading Poker

Today, even I traded. It was a bit too easy and showed a resiliency, on low volume, to the market that actually shows a traditional PNF chart that a bull market could continue.
The market showed negative futures, and enough spikes and valleys to move from a low of theoretical Dow 9541 to a high of 9754, just beyond what we saw as the actual market top.

All calls owned or that were bought were profitable. Most traders were able to buy calls at near prior day, or lower, and sell right at our market tops.

And a succinct analysis of today's trading from Philip:

"Hope you're enjoying your vacation. Purchased some inventory in the OEX Sep 500 Call today at 4.00, sold to 4.80 for .80 profit. Couldn't really afford to get in to the 480 Call today: seemed too rich for my blood and volume was less appealing to me; I missed entry yesterday due to another job I have - teaching film students. Still losing on the 440 Put, but the 500 call profits combined to make it a profitable day.

What you wrote a while ago about purchasing the call option even though you're a contrarian was a good lesson for me. 'Everything in this world operates not on reality, but the perception of reality.' (A quote I borrowed from one of my favorite movies, Sneakers.)"

-PRW, L2

From Trader JK, a bit of sobriety: http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm


Of interest in 2001 the Dow had a 1370 point loss, up to then one of the four worst weeks in market history. This is an historical fact that two years ago would have seemed a "shocking thing."

Now, it's the norm. How perspectives change.
I'm having a reflective week on the beaches with my wife, and part of having less "input" has allowed me time to think back on what a great month I had, and that we all did, just trading calls, and losing on only a few puts, and how effective money/risk management is so critical. I have created patterns for my stock trading that allow me to stay calm, and those same patterns have led our success in the market last year and this with Blue Chip Options and our core portfolios, despite "the world ending last October."

Here's a few examples of things I've learned:

*Whenever I make money I take a certain % and take it out of the trading account. I protect a share of my profits.
*When I am doing really well, I invest more. I follow my "luck."
*When things begin to go wrong for me, I simply stop trading. It may be a few hours, or a few days, but I just walk away from myself.
*I do not care what should be, but only what is. The market should NOT be going up as it had been this past month by pure logic, and was massively overbought by traditional standards, but I did not let my bias influence my trading. I personally don't give a blip how the market does if I can profit from what it does.
*I am fanatical about re-calculating the support/resistance and pivot point by calculator at least once during the trading day, if any strong market movement. Did you know that our Pivot Point Calculator will work with any stock, or index, and that we teach how at www.bluechipoptions.com
*By re-calcualting I can see new potential tops and bottoms.
*I "fall in love" with one option if I can, so that I can watch only the movement on it, and "play the other traders" that are trading that same issue. I call it "day trading poker"":)