Wow Guys, what a morning and what a week. I closed 9 trades for a profit this morning and 1 for a loss across two accounts (my main account and my extra options account). For the week that makes me 12-1 on options trades and 8-2 on stock trades. And that includes Monday's crazy market volatility day!
But there is more to it than that. Check out some of the things that happened:
FB option -- Gapped way up overnight and shot past our profit target.
XLY option -- If this had been a stock position, it would have hit the stoploss, but since it was an option (and I don't use stoplosses for options), the position stayed alive and it ended up gapping up above the profit target today.
TWTR stock -- the earnings went our way and it gapped up, just like DHR did earlier this week.
TTD stock and option -- after hovering around a loss, it gapped up overnight right in time for our time limit.
ABT options -- went down out of the gate yesterday after I bought it, and gapped up overnight to hit the profit target.
Seriously guys, this was special. So many tickers gapped up.
There was one outlier. CLX options. This one was an absolute roller coaster filled with volatility. Yesterday at one point I had a 200% profit on that option, but it hadn't yet reached my profit target. Then midday, the stock price started dropping and didn't stop until it had wiped out all of that profit. When all the dust had settled, I ended up with a loss on it this morning.
And guess what: I still applauded myself for the trade! I followed my rules. I stuck to the back-tested approach. If I didn't have any rules, I don't know that I would have had these sorts of results this week. Remember just back on Monday how dire things seemed? If I didn't have rules, would I have been loading up on positions? And if I didn't have rules, maybe I would have cut the cord on my FB options and the others that ended up roaring back?
Not only that, as painful as it might have been to see CLX go down yesterday, it might be worth remembering that the exact opposite thing happened with just about every other position in the portfolio this week. For example FB, XLY, and AMD options were nearly worthless, and then they rocketed all the way back to profitability. So if your mind is dwelling on CLX, you might want to see what it feels like to dwell on all the ones that did the opposite of CLX in our favor...
And about TWTR, although I sold it for a price that was higher than my profit target, that one actually went way higher during after-hours yesterday right after earnings were announced. I personally choose to only make trades during normal trading hours. That's how the back test was performed, and I stick to the back-tested approach. But that doesn't mean that you can't exit during the after-hours trading session if you want to. Sometimes you might sell for a higher price than me and sometimes you might end up selling for a lower price than me. But if you see a great profit and want to lock it, that is completely up to you and I support you no matter what you decide to do.
There are no new trades today. And my portfolio feels empty! I have only two stock positions and one futures position because so many trades hit profit targets and time limits today.
Since the market is at an all time high right now, it makes sense that there aren't a lot of new trades today. I trade pullbacks. If the market takes a breather and pulls back some, then it will likely feed us more trades. We'll see what comes to us in the coming week.
If you have any questions or feedback, I'd love to hear from you.