Swing Trading Live Virtual Portfolio

The purpose of this virtual portfolio is to teach how to become consistently profitable by following some basic trend-following strategies. All virtual trades are posted and updated live in the virtual portfolio, as well as in the daily post/comments.

In the comments we also discuss each position as well as strategies. Our focus is on discipline and money management. Our goal is to show that by keeping losses very small and letting run our winners it is easy to be profitable in the long-run.

Summary of our strategy

  • Most of the trades are directional, naked options or stock. Sometimes we trade vertical spreads or more complicated positions for earning plays.
  • This virtual portfolio is targeted to virtual trades that we usually hold between 2-3 days and a couple of weeks.

  • All virtual trades are posted live in the virtual portfolio as soon as they are entered and in the comments as well.
  • We use different strategies in this virtual portfolio, one of them being the 5MA strategy, explained here. But we do not trade this strategy only. Most of our trades are based on technicals, support/resistance, patterns, candlesticks, pivot points etc. The constant is that we always define our stop when we enter the trade and we always respect risk management and position sizing.
  • For most positions, unless indicated, we buy ATM or slightly ITM naked calls or puts. We usually buy one month out, and never hold current month options 2 weeks before expiration.
  • R is how much we risk on each position. It is the difference between the entry price and the stop.
  • R should not be more than 2% to 5% of your virtual portfolio.
  • R is constant. It means that we should always lose the same amount when our stop is hit. If we risk 2% of your virtual portfolio on each trade and our virtual portfolio is $100K, then we should ALWAYS lose $2k when we get stopped-out. And it does not matter if the stock dropped 20% or 1% from our entry.
  • By defining our stop and our risk BEFORE we enter each trade, we can then calculate the number of contracts we need to buy to keep our loss at 1R when we get stopped-out.

An example of how we calculate position size:

Let’s say we buy AAPL calls when AAPL is at $152.25.
$151 is our stop.
Delta of the May $155’s is 0.50
Our total account is $25,000
Our risk on this trade is 2% of $25,000 or $500
Our risk is $1.25 on the stock
Our risk or maximum loss per option is $0.625, which 0.5 (delta) X $1.25 (risk on stock).
The number of contracts we should buy is our total risk divided by the risk per option: $500/(0.625*100) = 8

 

 
 
 

Zero Hedge

Recession Concerns Grow After Gasoline Demand Slides Most In 16 Years

Courtesy of ZeroHedge. View original post here.

Two weeks ago, we reported that when Goldman observed the latest gasoline demand data, it said that either something must be wrong with the data, or the US is in a recession: as the firm's commodity analyst Damien Courvalin put it, such a steep drop in in US gasoline demand "would require a US recession." He added that "implied demand data points to US gasoline demand in January declining 460 kb/d or 5.2% year-on-year. In the absence of a base effect, such a decline has only occurred in four periods since 1960 during which time PCE contracted."

Bloomberg's ...



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ValueWalk

Standing Rock Protesters Face Mandatory Evacuation Deadline

By insidesources. Originally published at ValueWalk.

A camp that began for the water ended in flames on Wednesday afternoon as law enforcement moved to close the Dakota Access Pipeline protest camps. Prior to the mandatory evacuation deadline, protesters set fire to many of their remaining structures, arguing that this ceremonial destruction was the only way to prevent the area from being desecrated by law enforcement. A mandatory evacuation deadline had been set for 2 pm, but nearly two hours later, law enforcement remained on the perimeter, encouraging protesters to leave on their own.

The mandatory evacuation deadline was the final stage in process that had begun on Tuesday, when law enforcement set up a roadblock near the camp’s southern gate. At that time, they shut down traffic into the ca...



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Phil's Favorites

Cincarious Research's outdated note on FireEye, posted at Zero Hedge

Note: Cincarious Research contributed the article LifeLock Willing To Give FireEye $16 Per Share In Takeover Offer - Sources to Zero Hedge. It appears to be fake - or at least old - news.

Read this: Who or what is “Cincarious Research?”

Cincarious Research writes,

LifeLock is looking to revamp itself with a purchase of FireEye according to a few of our sources in the security space that are privy to the on-going conversation. We were told the company is seeking to expand offerings and the added cyber-security depth from FireEye on the government level is what LifeLock wants, badly. The deal is set for $16 per share for a total va...



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Kimble Charting Solutions

Gold & Silver; Knocking on breakout door again!

Courtesy of Chris Kimble.

Silver and Gold have continued to head lower since highs reached back in 2011. Is the 6-year bear market nearing an end?

Below looks at the Silver/Gold ratio over the past decade. To be long and strong Silver and Gold, the preference would be for this ratio to be heading higher.

CLICK ON CHART TO ENLARGE

The ratio has formed a clean falling channel (series of lower highs and lower lows) inside of (1). Three different times it knocked on the underside of falling...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Oil Sands Batter Major Explorers' Reserves as Rout Sinks Value (Bloomberg)

Oil-sands investments in Western Canada that gobbled tens of billions of dollars over the past decade are proving an Achilles heel for some of the world’s biggest energy producers.

A definitive breakdown of the gloomy state of Wall Street (Business Insider)

Don't be fooled by the strong rebound in Wall Street trading revenues at the end of 2016: Investment banks still had a lousy year.

...



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Chart School

Market Pause

Courtesy of Declan.

Nothing really to add to yesterday. Markets took minor hits, but there was little intraday spread. The biggest spread was in the Russell 2000 which was underperforming heading into today's session. It reversed most of yesterday's gains, but it has some way to go before it begins challenging the breakout


The New Lows and Highs is in a secular bullish pattern, and it will take continued pressure in spike lows to generate a sustained sell off - none of which is happening here.

...

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Digital Currencies

It's Time To Beat Up On Credit Suisse and Their Woefully Misinformed Bitcoin Advice

Courtesy of Reggie Middleton at Zero Hedge

Credit Suisse has been posting cryptocurrency advisories over the last few weeks. They are quite one-sided, although couched in the appearance of objectivity. To explain why it's couched in the appearance of objectivity, and not actually objective, let me give you some background. 

The Obama administration enacted a law known as the Fiduciary Rule, as per Investopedia

The Department of Labor’s definition of a fiduciary demands that advisors act in the best interests of their clients, and to put their clients' interests above their own. It leaves no room for advisors to conce...



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Members' Corner

Lumber Liquidators Leukemia?

Courtesy of The Nattering Naybob

Phil – LL –   "I can see the ad campaign now: "Our lumber hardly kills you!" 

We Nattered... Today Feb 23, 2016 down -19.5% premarket from $14.21 to $11.27.   

Somebody forgot to convert feet to meters. The CDC said it made an ERROR in the Feb 10th report and had used an incorrect value to calculate ceiling height, which meant its estimates of the airborne concentration of cancer-causing formaldehyde were about three times lower than they should have been. 

Considering myeloid leukemia, some cancers and formaldehyde are linked at the hip, wonder if overexposure had anything to do with the CEO's leukemia?  

LL subsequently went to $19.67 on Sept 30th and has since cooled down to $15....



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OpTrader

Swing trading portfolio - week of February 20th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Mapping The Market

NSA May Be Withholding Intel from President Trump

By Jean Luc

These GOP guys were so worried about Hillary's email server and now we find out that we had something close to a Russian mole in the White House. In the meantime, Trump keeps on using his unsecured phone, had high level conversation in his resort in front of dinner guests! It's getting so bad that rumors are now circulating that the NSA is not sharing information with the WH:

NSA May Be Withholding Intel from President Trump

By 

….Our spies have had enough of these shady Russian connections—and they are starting to push back….In light of this, and out of worries about the White House’s ability to keep secrets, some of our spy agencies have begun withholding intelligence fro...



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Promotions

Phil's Stock World's Las Vegas Conference!

Learn option strategies and how to be the house and not the gambler. That's especially apropos since we'll be in Vegas....

Join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017            

Beginning Time:  9:30 to 10:00 am Sunday morning

Location: Caesars Palace in Las Vegas

Notes

Caesars has offered us rooms for $189 on Saturday night and $129 for Sunday night but rooms are limited at that price.

So, if you are planning on being in Vegas (Highly Recommended!), please sign up as soon as possible by sending...



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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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