The Official Trading Thread

Finished up 2.3% on my portfolio today. This was mostly because of the vertical puts I sold on Monday. Apple traded lower after the open but had a beautiful reversal at $455 and moved above the 100 sma. The only issue is that we have another wall at $465. This is the same zone as last when when Apple ended up dropping down from $460 to $385 in 2 weeks. So there is a lot of hesitation here.

The following are the resistance levels:
$465
$475.50
$485

These are all levels that we previously have dropped down heavy from. Keep in mind in addition that today was the last day you could be holding Apple shares so that you are given a dividend next week. Usually when this is a case, there is a small run up in the stock for the dividend, but then a next day sell off because the folks that came in just for the dividend the prior day want to sell off the very next.

It will be interesting as to what happens tomorrow, and I cannot offer any suggestions. We are currently in no man's land. We have two major resistance levels within the next $6 but also some solid support in the $450 range.
 


wickedDUDE said:
Are there any passive investors in this thread, or am I the only one? Over the long haul, the majority of active investors can't beat passive index funds.

I'm up almost 10% in 2.5 months and I haven't even lifted a finger. I have a shitload invested so that basically works out to a new car if I were to cash out.

I can see why active trading is attractive for a small percent of your portfolio, i.e. "fun money", but I certainly wouldn't want to do it with major stakes at risk.

If you buy into a low-cost index fund like Vanguard's "VTI" ETF (expense ratio of 0.05%), you're already balling and will beat 75% of investors.

Wall Street doesn't want you to invest in index funds because they will rape you with their 1-2% AUM fees instead.
Click to expand...

I agree that you shouldn't trade daily your retirement portfolio but just investing and forgetting about it doesn't work either. Not in the times of High Frequency Trading and short term outlooks of investors So there is a balance in between, sometimes stocks get over bought and its wise to take profits and other times when the market is over sold its time to add more money to it.
 
wickedDUDE said:
Are there any passive investors in this thread, or am I the only one? Over the long haul, the majority of active investors can't beat passive index funds.

I'm up almost 10% in 2.5 months and I haven't even lifted a finger. I have a shitload invested so that basically works out to a new car if I were to cash out.

I can see why active trading is attractive for a small percent of your portfolio, i.e. "fun money", but I certainly wouldn't want to do it with major stakes at risk.

If you buy into a low-cost index fund like Vanguard's "VTI" ETF (expense ratio of 0.05%), you're already balling and will beat 75% of investors.

Wall Street doesn't want you to invest in index funds because they will rape you with their 1-2% AUM fees instead.
Click to expand...

Well, if you are trading and utilizing all your portfolio capital into active trades, that is a very foolish thing to do. I know that I typically have at most 10-15% being utilized. As a trader, you might not be able to outperform the markets when they are surging, but that isn't the strength of being a trader. The same thing applies for a hedge fund. The hedge fund's major role is minimizing your loses when the markets take a turn for the worse. That always happpes every couple years without fail.

As an active trader, if the markets plummet 25% over the next month. all index fund holders will lose 25% of their money instantly. As a trader, at the worst it would be 3-5% if I were holding long positions. Back in the 2009 crash, option traders made a lot of money while index fund holders lost 50%+ of their IRA accounts.
 
I do want to mention that you can easily put options in your advantage by selling options, and then monitoring them carefully. For example, on Monday I sold that vertical put on Apple. I sold the $455 put, and purchased the $450 put. Since the put I sold is closer in-the-money, it is worth more - so this is a credit position. Now, since I shorted this put, I am expecting for the stock not to move down. Particularly not to move lower than $453.

I opened this position when Apple was trading at $461 on Monday. Today Apple closed at $463. The position is already at 25% gain. When Apple was trading at $461 earlier today, I was at 18% gain. I did not need the stock to move up at all, and I am still bringing in gains.

The risk profile chart tells me that unless Apple trades under $456 tomorrow, I will be at breakeven and better. That would place it $5 below my entry. The buyer that purchased this specific put from me, he will still be sitting underwater if the stock moves to $457 tomorrow. Even though it is $4 below where he purchased it. This gives me a good opportunity to leave the position if I feel uneasy going into Friday (expiration date).
 
mGrunin said:
Well, if you are trading and utilizing all your portfolio capital into active trades, that is a very foolish thing to do. I know that I typically have at most 10-15% being utilized. As a trader, you might not be able to outperform the markets when they are surging, but that isn't the strength of being a trader. The same thing applies for a hedge fund. The hedge fund's major role is minimizing your loses when the markets take a turn for the worse. That always happpes every couple years without fail.

As an active trader, if the markets plummet 25% over the next month. all index fund holders will lose 25% of their money instantly. As a trader, at the worst it would be 3-5% if I were holding long positions. Back in the 2009 crash, option traders made a lot of money while index fund holders lost 50%+ of their IRA accounts.
Click to expand...

if it happens over a month it wouldn't be instant
Looking back, crashes are very rare and are often precipitated by either a crisis, rising interest rates or high valuations. None of those are in the purview. Index fund holders should have little to lose sleep over.
 
cpauser said:
if it happens over a month it wouldn't be instant
Looking back, crashes are very rare and are often precipitated by either a crisis, rising interest rates or high valuations. None of those are in the purview. Index fund holders should have little to lose sleep over.
Click to expand...

There were two very severe crashes in the last decade. The last crash (mortgage crisis) happened spontaneously. Then there are the mini-crashes. Such as May 2012 the indexes dropped huge because of Greece. It was not until August that the markets finally recovered back to the levels in April. That was four months that IRA holders waited patiently to go back to their prior balance while active traders kept on making money those months.

The folks that invested into Nasdaq Index 14 years ago are still underwater.
 
Relatively flat day for the markets. Google is a couple cents in the green right now and Apple is fighting its way back to green. Apple did up $3 down today but I did post last night we expect that. It sold off a bit more before bouncing off $457.60 and is now currently trading at $460.68. The vertical puts I sold have picked up a few more gains - so I am in the green for the day.

There are barely any economic reports coming out tomorrow so I do not expect the markets to move too much tomorrow as well. Unless we hear something negative coming from Europe.

P.S - I opened a minor naked call position in Apple about 30 minutes. We are still trading in the same range though.
 
Ok, so here is my trading/investing story over the past couple of years. tl;dr: missed opportunities and too afraid to make money. This is more like mid-term investing and not day trading btw.

So a few years ago I noticed that the VMWare stock was quite low and heading up. I forgot the exact price I was considering buying in at but I think it was around $50. I thought that with web hosting going toward VPSs and companies using virtualization software for other stuff more and more it should do really good. But I was too afraid to put real money into a single stock. So I made a mental note. Let's just say I'm buying right now and then see how it does from now on. Well, it like doubled in about a year.

So that gave me some confidence and I thought the next time I see a good opportunity, I should just put in a really small amount to continue to see if I'm good at picking stocks. This way I will actually be rewarded and I don't care if I lose it all because it's so small. (I day traded USD/EUR like 5-6 years ago and made $2k, then lost $3k, so I stopped day trading after that btw.)

Ok, so after VMWare I was looking at Tesla. Thought the CEO was a genius and now would be a good time to get into an electric car company. So I bought $500 worth of Tesla stock. Just enough that I would be rewarded it if took off and no big deal if I lost it all. Held if for a little over a year I think. Read a news article saying that they were missing on their earnings or something like that and the stock looked like it was about to take a dump. Plus I looked at my return and my money would have been better off in an index fund over the period I was holding it. So I sold it for like a $20 profit or something. After that the stock took off and now today there is a massive short squeeze and if I held it I would have gone from like $25 to $75....

I've been looking at another company recently. I might try again with $500 or maybe $1000. But the overall market is doing amazing, so I might just stick to index funds.
 
Oh, I should probably add that I've made a lot of money by just being in index funds over the last couple of years and I'm trying to increase my return or make additional income with these mid-term investments/trades.
 
TESLA, amzn, google, lnkd, fb
the higher the IQ of the CEO, the better the performance (although FB could be an exception because the stock hasn't done much)
 
This is what a half-second of trading in JNJ futures looks like:

[ame="http://www.youtube.com/watch?v=rB5jJuMP84E"]Nanex ~ Order Routing Animation ~ 02-May-2013 ~ JNJ - YouTube[/ame]

That's your competition.
 
Various media outlets and blogs are spreading misinformation about high frequency trading perhaps to scare people out of the stock market and for ratings. HFT doesn't pose a threat because over the longer run (months & years) stocks will still rise to their fair value and because HFT works both way; either buys or sells can be traded with high frequency, not just sells. Having lots of high frequency traders smooths out inefficiencies in the market making the process more democratic for average investors and the extra volume helps keep the bid/ask spread narrow. If you buy 1000 shares of a stock with a 50 cent spread you've already lost $500 if you try to sell. Computerized trading hasn't made stocks more susceptible to crashing. For example, stocks suffered high drawdowns in various panics in the 1800's and 1900's. According to a theorem, whether you have 1000's of sell orders or dozens, the result is still the same provided some geometric conditions hold between the inflection point of a chart.
 
Things are not looking too good for AAPL:

LG6aQKh.png


The good:

  • Broke the downward resistance from September.
  • Broke the downward resistance from February.
The bad:

  • Severe slow down in volume at these levels. Notice just how much higher the volume two weeks was towards the upside, it has slowed down considerably. We will not be able to break out of this zone unless volume returns.
  • We are possibly setting a lower higher. Back in March Apple hit $469.50 before coming all the way down to $385.10.
  • The short interest is at 41.59m shares. The highest ever since 2001! You can bet that many are looking for Apple to roll over again.
My opinion:


There is one last thing that can hold Apple at its current levels before the sellers take over. Notice how on Friday we had a bounce off the prior downward resistance set from February. This time the resistance actually turned into a support. If it breaks under it, all hell will ensue until it reaches $420.
 
Google on the other hand has been pulling rabbits out of the hat. There are literally no resistance lines or moving averages to hold it down. The only resistance it set this week was its double top at $880. At the same time, it did finish Friday right at that top ($880.23).

knooS5Y.png


At this level, no position looks attractive. I see a break below $870 a good spot to short for a mini sell off. On the long side, $882 is a good place to go long with a stop at $878.
 
Netflix has been a complete bore for the last few weeks ever since its earnings beat. Fortunately there are some clean levels of entry for long or short positions.

Two times this week it broke out of its consolidation range, and it bounced off that same exact level twice this week. This is becoming a good stock to watch to for a swing trade.
>$220.00 is a good long swing trade.
<$204.00 is a good short swing trade.

DusgfWi.png


In both instances, a stop would be set up where it would re-enter the consolidation range of $210.00-$220.00.
 
Jcraig83 said:
Are you looking to get into any new positions on Apple?
Click to expand...

Not at this current level. Throughout this week we had several drastic reversals. Even if the stock only moved + or - 3 since the prior close; it actually had + or - $7 to $10.

The vertical puts that I sold this week came out at a loss. The breakeven level was somewhere around $453.25. The position was liquidated at $452.90. Logged a small loss. 4% loss on the portfolio. Currently up 15% this month so far.
 
You must log in or register to reply here.
Top Bottom
Back