Hey Guys,
Overnight the market dipped pretty low, but by the time the opening bell rang this morning it had come all the way back and now is up a bit this morning. I'm thankful I slept through most of that volatility! It's a lot easier to stick to my trading plan if I don't hang on every twist and turn of the market.
I picked up some new positions today. I bought stock for SE and KR. A couple notes about those:
SE wasn't on the watch list. It had a big drop overnight and landed right in my buy zone, so I bought it. The huge majority of the time my trades come right off the watch list, but sometimes a case like this happens.
And with KR, they are set to report earnings before the market opens tomorrow. Earnings typically bring price volatility, which means not only that the profit exit or stoploss could quickly get triggered, but also that the price could gap beyond either exit and increase the size of either the profit or loss. That risk exists on every trade we take, but the odds of it might increase when holding a stock through an earnings announcement. If you don't like the thought of that, you can consider exiting the position before the market closes today.
I also bought options in my extra options account for KR. Normally the options for a stock that is about to report earnings are too expensive to meet my criteria, but these ones were an exception.
I also bought options for CSCO. I had a nice options trade with Cisco a few months ago, so let's hope the magic is still there. The options I bought today were pretty well below my max premium criteria, which might make for a nice profit multiple if they end up in the profit zone.
As of the time I'm writing this, every position in my portfolio is up right now except for my Ebay options. And what's funny about that is that in back tests, Ebay has been one of the best tickers out there for this trading strategy. It's had a 73% win rate. You can see how each individual ticker performed in back tests by looking here.
I closed my CB stock position today since it reached the time limit. It technically was a loss, but it was just about breakeven. My short MES futures position took a loss yesterday too. If I'm lucky, my long MES futures position might get a victory and wash away the losses from the short positions I took this week.
If you have any questions or feedback, I'd love to hear from you.