Sunday, August 24th -- big recap

Practically a week-long recap

Well, last week was a bit of a rough week for me, so our trading suffered from lack of attention.   (Long story, won't bore you tonight.)  Luckily, because we have stops put in place immediately now with the "1st trig OCO" order, it's something I can relax a bit on when needed.

However, that isn't good for our long term goals.

One of the things we try to do is look at each position we're in every night.  That way, at the very least, we know what's going on.  I also try to read the news associated with our positions and see what happens from there.  But neither of those happened this week, and it was a busy week!

So, here's a recap of where we were and what changed and where we are now.

As of Monday night we were in:

• IWM -- An Iron Condor with the September expiration at 117/118/108/107.  As I recall, I wasn't too keen on it at the moment, and things were iffy as to whether or not the position would turn the way we wanted it to.  We did have a trail stop on, so we shouldn't have hit max loss, and we didn't.  But we did get stopped out on Tuesday.  However, looking at the chart (from TD Ameritrade on the think or swim platform), if we hadn't have had the trail stop on, we would probably still be in the position.  Here's the chart as of today, with Friday's close being the candle farthest to the right:
  
  On Tuesday the underlying came closest to the 117 strike and triggered our trail stop.  However, it cam back down and closed lower.  Wednesday, it opened slightly down and had a small up trend for the last three days of the week, but didn't come any closer to Tuesday's high, which triggered the stop.

         So, If we didn't have the trail stop on, we would probably still be in this position and profitable.  Something more to think about there for us, I suppose.  I'll have to look at that again and see if we want to have trail stops on positions.  

         Unfortunately, because of the trail stop, we closed unfavorably and lost $10 on this position.  

• TWTR -- We had sold the September 40/41 put vertical, and it was looking very good.  This one worked out very well for us and we rode it out to our profit target and bought back the contract at $0.06 per share, resulting in a net gain of $23.  I like when this happens.  

         And the chart looks good for another potential put spread.  I might look at both the September and October expirations and see what happens.  Here's a snip of the chart:

• YHOO -- We got into Yahoo on Monday by selling an Iron Condor with the September expiration at 40/41/33/32.  We're still in this position, and it's looking good for us at the moment.  Current mark is $0.34.  At this point, I could put on a trail stop and reduce our max loss.  However, I'm wondering if this is going to do something similar to IWM where it will hit a high close enough to trigger the trail stop, but fall back within our range.  I think that I'll leave this at the "regular" hard stop and see what happens as we move through time.  Just for kicks, here's a current snip going back farther in time.  (You have to get back into March to see the price of the underlying where it's at right now.): 
  

• UNG -- So this was interesting.  It actually turned into a great example of how that "1st trig OCO" order can work in our favor and eliminate some risk.  Last Tuesday, we sold the call option with strikes of 21.50/22.  Well, the high on Tuesday of the underlying ETF was $21.49, and then it did hit $21.50 on Thursday.  Luckily, we had the stops on automatically, and so we didn't completely lose our shirts.  Though we did have a net loss on this one as well.  

• GM --   Oh dear.  GM might be going against us.  We sold a put vertical with a September expiration at 33.50/33.  Unfortunately, we went against the overall trend, and now it seems that trend is taking over again.  There was a short uptrend over the last 2 weeks.  But we got in way too late, and now we're probably going to lose.  We'll see what happens tomorrow.  Lesson 2 of the night -- TRADE WITH TREND!  (Again.)

Overall recap of last week 8/18 - 8/22:

Four positions closed.  Three went against us.  One went favorably.  One that went against us went really badly against us.  Net loss for the week:  -$33.  Yuck.  

So this week really impacted both our net revenue and our winning percentage.  We're still net positive on trades over the course of all our trading, but we did have a big set back.  So we'll be working hard to build that back up. 

In terms of our success rate, we're still better than 50/50.  Slightly better, but we need to improve upon that as well before I start risking our actual funds in the market.  

Well, we've got our work cut out for us this week.  

Lessons learned last week:

1. Trade with trend.  Focus on bigger trends as well.  Don't just look at the last 2 weeks, remember that we might be getting in at the end of a small reversal.  
2. Use that "1st trig OCO" order to remove same-day risk.  I'm glad we did it for UNG, and I'll continue doing that for all positions going forward.
3. Evaluate trail stops on condors (maybe all positions...).  It might be worthwhile to hold on putting the trail on until after profitability is guaranteed, or some other variation.  See IWM example above.

New Potential Positions to start this week off right:

YHOO -- October Expiration 36/35 -- selling the put vertical.  This is getting back to our rules in that we're going with the trend.  Yahoo is on a good up trend recently, and we're hoping to capitalize on that.  It looks like the Yahoo and Live Nation partnership could be interesting.  I'm curious how that will work out, and how it will affect the stock.  Positively, I hope.

I'm torn about what to do next.  Nick found several options to consider, and I'm torn about which other two to put on tonight.  Several of these fit our delta and return rules.  Now I'm studying charts to see whether they fit trend rules.  Priority is being given based on highest potential dollar return.  So a position that has a potential winning return of $25 is being ranked higher than one that had a potential return of $15. 

MU -- Potential:  Sell the put vertical, October expiration, 32/31 strikes.  It looks like MU is on a strong up trend, though the 30 day simple moving average is showing more flat.  However, that is a delayed indicator, so I think I'll go with the uptrend.  It looks like 33.50 might be a resistance level right now, but 32.25 is a potential support. The high for the last year was $34.85 back in mid-July, so it's possible we'll get that high.  Verdict:  go with it and see what happens.

Nick also suggested Iron Condors on QQQ and IWM.  An Iron Condor is a neutral strategy, and I'm not seeing an neutral chart pattern in QQQs, yet.  We might, and it might show up soon, but until we start seeing evidence of that, despite the numbers, I think a Condor on this underlying is a bit too risky right now.  IWM, on the other hand, is showing definite sideways movement within the range that Nick identified.  So I'm going to go with the condor on IWM.

IWM -- Selling the October expiration Iron Condor with strikes at 120/121/108/107.  

Just for kicks, I put on a TWTR put vertical.  October expiration, 43/42 strikes sold.  

It's amusing to me that some days finding potential positions to analyze is incredibly difficult.  Tonight we had an abundance.  

Well, here's to a good week ahead!  

Happy Sunday all.