Hump Day

So I am mulling over which stocks to play from my list last night and confirmed WFMI and RATE as valid PUT plays through consulting with an INVESTools coach. I got in the Nov $55 on WFMI and the Nov $35 on RATE.

Stop loss & protecting profits vs. Opportunity costs

Well, I am in a quandary in protecting profits vs. opportunity costs. What I mean is, I had a wonderful play on FCX the last few days that was up almost $1,500 at one point just cruising along. So, in order to capture profits, I moved my stop-loss to hold onto at least $700. Well, low and behold, FCX drops over .90 yesterday and takes out my play for the aforementioned profit. Of course, my Murphy law always said that a trade always temporarily goes against me then reverses to piss me off, which is exactly what has happened. FCX ended up only down .25 yesterday, and today, is already up .78, which means I would have still been in the game had my stop loss not been so “close.” So what to do? Do I leave my stop loss back really far so as not to be taken out prematurely? Or do I continue to use my stop loss to protect profits and risk being taken out before my pattern plays have fully evolved? Perhaps I need to look at the “big picture” which is what type of play I am using, and base my stop loss triggers on that? Ideally, I would like to stay $1 away from the option’s Bid price as a buffer, so maybe I will try that?

Nuclear Iran

Scary thought huh? Those haters of “the Great Satan” in possession of a nuclear weapon is a nightmare. Why? Because those a-holes don’t need a reason to set it off, it would be “Allah’s will,” or some crap like that. It will be very interesting to see what happens the next few weeks if Iran rejects the UN resolution and continues on its evil ways. If it comes down to a conflict, and we certainly have the assets in the region to start some shit, oil prices would spike faster than you could say “Ayatollah.” Maybe gold prices would soar too? That would be nice for my GLG play.

Mid-summer blahs

The market this time of the year is very tough to read. I have done better this year, then my first summer last year when I got absolutely crushed! The volume is very light which can be a problem since small volume days can move a stock price a substantial amount killing some good trades along the way. I have learned that a couple of times this summer, but not to the painful extent of last year. I have played savvier with my exit points, not willing to get out at when a certain loss level is reached, but if certain support and resistance levels are broken. THAT, along with strict money management is really the key to success. I wish I had really understood that more than anything else the past year (my very first as a trader).

Looking in on GLG

Well, GLG looks like it may not have enough juice to break out of its Ascending Triangle pattern on this run, but Gold is a funny thing, it could break out at any time. It is still trading within the triangle pattern and I felt it may have one more pull-back before its breakout run. Ideally, I’d like the breakout to occur now, but I am comfortable with my position.

Maybe I am getting smarter after all?

Well, FCX which I mentioned earlier is now DOWN .26, a $1 change from the high, so maybe taking my profits out earlier was the right thing to do? I had a similar thing happen with BUCY in which I was up over $3,000, only to have the stock come down and take me out for a $2,300 profit. At the time, I was upset because the stock went up the very next day. HOWEVER, looking back on it now, the stock is back to where it was when I bought it, meaning I would have broken even at this point, instead of being $2,300 ahead. Perhaps it is best to capture your profits while you got them?!?!

So how did it end?

Well, of my two plays today, RATE did very, very nicely as I am up $700. As for WFMI, just about even, which means I at least gained the spread.

GLG, MON and XTO were all down a bit but all are within the confines of the predicted trading pattern of the play, so I will still be staying the course for now.

I’ll see if anything looks interesting to play tomorrow.

Happy Trading!