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.
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
He’s a thug, and a crook, and a liar, and a pseudo-intellectual and a murderer. Ok? Those things are factually verifiable.
Kissinger deserves vigorous prosecution for war crimes, for crimes against humanity, and for offenses against common or customary or international law, including conspiracy to commit murder, kidnap, and torture.
A good liar must have a good memory: Kissinger is a stupendous liar with a remarkable memory.
When you find yourself in a hole, the saying goes, stop digging. A simple lesson that arguably has bypassed a mining industry that’s wiped out more than $1.4 trillion of shareholder value by digging too many holes around the globe. The industry's 73 percent plunge from a 2011 peak is far beyond the oil industry's 49 percent loss ...
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
.."There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks h...
In May of last year, the S&P hit a key level and stopped on a dime. We applied Fibonacci tools to the highs in 2007 and the lows in 2009, to the chart above. The 161% Fibonacci extension level came into play in the 2,150 zone last year and when hit at (1), the markets stopped on a dime.
If your tools or adviser has suggested to be long and strong since May of 2015, that advice has been costly.
Our take, “Free advice that is wrong, is expensive!!!”
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
Throughout the past 30 days of wild volatility, here’s what I didn’t do.
Panic. Worry. Sell.
In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our mind and ignored it.
A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.
We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.
The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.
Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.
Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...
Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.
Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW)
nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Site owned and operated by PSW Investments, LLC. Contact us at: 403 Central Avenue, Hawthorne, NJ 07506. Phone: (201) 743-8009. Email: firstname.lastname@example.org.