May 05

full time trader log 2014 05 05

options trading MalaysiaUnderlying Stock : AAPL

Strike : 587.50 Put

No. of contracts : 2 contracts

Enter/exit price : 4.27/4.80

Holding time : 2 mins

Net Profit : $103

DOW was down almost 120 points in the first few minutes of the opening session today due to China data and Ukraine jibes. AAPL was hovering unchanged, directionless, did not know if it should follow DOW downwards or defy the fall as analysts had just upgraded the stock this morning. AAPL chart was heading upwards and defied the DOW downtrend, but from experience, it will always retreat at some point. This is where the signalling systems and rules come in. Cool $103 in less than 2 minutes. Confidence is slowly creeping back into this full time trader wannabe. Cautious not to be over-confidence or the market will KNOW.

Today, I am gonna write a little more. One of my followers asked me, “Why I only trade once a day?” Well, I did try trading round the clock when I first started. Later, when I did a post-mortem, I found out that my trading results were not as good as trading only once a day. I figured out that my emotions and psychology did the damages. I was eager to trade, to profit. I was GREEDY. And emotions took me out. That’s why I restricted myself to just one trade a day. Win or loss, just the one trade. Place my focus on just one trade and it works. Options trading in Malaysia works for me.

May 01

full time trader log 2014 05 01

options trading malaysiaUnderlying Stock : AMZN

Strike : 307.50 Put

No. of contracts : 2 contracts

Enter/exit price : 2.79/3.05

Holding time : 13 mins

Net Profit : $49

Today’s trade was a bit off. Came home from dinner late. On the way back, told myself that I should not trade since I was late and not mentally prepared to do this options trading in Malaysia tonight. Kids were bathing. Was waiting for my turn and I got itchy. “Login just to see only, not trade,” I told myself. But one thing lead to another, I was looking at the charts and selecting strike prices and then clicked the Buy button. Was eager to trade! Chart signals were also not fully aligned, only 2 of the 3 indicators were matched, but I still opened a position. It was green for a while, yet to reach my target sell price, then it went against me. It was slowly moving away from me, minutes by minutes as I stared at the AMZN chart. I should have cut loss, but chart signals were about to reverse, so I held on. It was some miserable 6-7 minutes. Then a big drop on the AMZN and DOW. Took profit and ran! Gotta enforce the psychological wall again! Breaking my own rules!

Apr 30

full time trader log 2014 04 30

options trading malaysiaUnderlying Stock : AAPL

Strike : 592.50 Put

No. of contracts : 2 contracts

Enter/exit price : 4.10/4.50

Holding time : 4 mins

Net Profit : $77

Did not open any position during the first 15 mins of the trading session in anticipation of the Chicago PMI data release at 9:45. The result data was above market consensus by $INDU was’t impressed with the results, bounced in the range of -20 to +10pts. But AAPL chart signals did form a great trend to open a Put position. Bought 2 contracts at the closest strike and sold in under 4 mins; and calling it a night! Options trading in Malaysia can work, switch on laptop and login to Interactive Brokers and Thinkorswim at 9:15pm, read some market news till 9:30, enter and exit position by 10:00, logout from IB and Thinkorswim by 10:01. Haha… don’t be too cocky or the MARKET will know!

Apr 29

Greed and Fear

full time traderYesterday’s trade, 04.28.14, on NFLX was my demonstration of greed. Well, come to think of it, it comprises both greed and fear.

I remembered my coach for options trading strenuously discussed about greed and fear when trading the market. He told us that by becoming a successful trader albeit full time trader, one need to master #1 “Money Management” and #2 “Greed and Fear”. So do most of the trading psychology books out there discussed and prophesized about these two elements. The two taboo words in the universe of stock, forex and options trading. Both greed and fear are inter-related.

Greed is when an opened position records a profit with the trader unwilling to sell, hoping it will still rise higher in price and hence pocketing more profits. Trader would keep adjusting the sell price upwards hoping it hit his/her next target price. This is Greed. Fear is when an opened position goes against your expectation and emotions started to conjure inside you, swirling and eating you from inside until you break and decide to abandon all planned strategies and system, if any, and act impulsively to relief oneself from the pain. This is Fear.

Back to yesterday’s trade as example. I opened the position with just 1 contract, chose the closest strike price and paid for high option’s premium price of $6.70. When the position turned green from red, with the chart signals continued to trend upwards, I adjusted the sell price from $7.00 to $7.15 to $7.30 and lastly to $7.50. I was greedy. The trading showed that that I was the only one on queue at $7.50 but the order did get to fill. Price then went spiraling down from $7.45 to $7.10 then $6.65. Fear kicked in. I was constipating then. Emotions started to swirl and play in my head, condemning myself for not letting go when I got a cool profit to pocket. The position then went back up to $7.30 and got filled at $7.50. Fear of losing again, conjured me up and I was relieved to be able to close the trade with a profit of $72 from a negative position 5 minutes earlier.

Lesson: First I was GREEDY, then FEAR kicked in and I closed off the position without looking at the chart. But after I sold the position, the price shot up from $7.50 to $9.30 under 30 minutes and $13.50 by closing bell. So, was I right to sell the position at $7.50?

This is GREED and FEAR working hand in hand, without fail in any trade, to mess the mind of a full time trader.

Apr 28

full time trader log 2014 04 28

full time traderUnderlying Stock : NFLX

Strike : 305 Call

No. of contracts : 1 contract

Enter/exit price : 6.75/7.50

Holding time : 18 mins

Net Profit : $72

Was greedy on this trade. NFLX was heading towards a rebound based on my charting signals after a $22+ decline. Chose the closest strike at a big premium. It was red at the beginning, paper loss of $45 before it rebounded. Could have taken profit when profit hit $50 the first time, but was greedy. It then moved down again with my position having just a $15 profit. Unsatisfied with the low profit, held on to the position even though signals were pointed towards downtrend. And it did, my position was then in negative territory again. Luckily it was only a slight fall, it could be worse. Learned the lesson, and took profit at the next upside reversal at $72 after brokerage fees. Never never be greedy again! I was lucky! And counting on luck is not the way to trade the market.

Apr 24

full time trader log 2014 04 24

full time traderUnderlying Stock : AAPL

Strike : 565 Call

No. of contracts : 2 contracts

Enter/exit price : 2.80/3.40

Holding time : 3 mins

Net Profit : $117

AAPL retreated after opening high due to favourable earnings results coupled with the news of a 7-1 share split. AAPL retreated from +42 to +36, a $6 decline in 15 mins. Opened 2 Call contracts, chose the strike that was close to market price. And my chart system was too kind to me when I opened the positions just before the uptrend reversal. My 2 Call positions saw green all the way, with me ever adjusting the ask price upwards, from $3.00 to $3.20 to $3.30. And “ta-daaaaa”, sold at $3.40, pocketed a cool $117 in under 3 mins.

Apr 23

full time trader log 2014 04 23

full time traderUnderlying Stock : TSLA

Strike : 215 Call

No. of contracts : 2 contracts

Enter/exit price : 3.30/3.70

Holding time : 4 mins

Net Profit : $78

TSLA was heading to a rebound after making a downward spiral in the opening few minutes. Chart signals did not lie and did not let me down. Of course, after opening the position, the trade was showing an unrealised loss; impossible to buy or enter at the lowest point. TSLA rebounded in less than 90 sec after i opened the position and took profit when the position hit 40 points. It was not something that I do not know, but in this trade, choosing the right strike price made a difference to the profitability and holding period of my trade.

Apr 21

full time trader log 2014 04 18

full time traderUnderlying Stock : TSLA

Strike : 190 Put

No. of contracts : 2 contracts

Enter/exit price : 2.60/2.90

Holding time : 7 mins

Net Profit : $57

DOW and TSLA were up and down during the opening few minutes. But looked at both AAPL and AMZN because they were good movement indicators for the market. But almost all option prices in my watchlist were very very high on premiums, earnings week! Did not want to risk too much my capital. So, only TSLA and GS for today. And TSLA looked good on my charting system. Hit and ran on TSLA 190 Put, $57 profit in 7 minutes. Confidence is slowly creeping back into my system.

Apr 21

full time trader log 2014 04 21

full time traderUnderlying Stock : AAPL & AMZN

Strike : 517.5 Put & 317.5 Call

No. of contracts : 2 & 3 contracts

Enter/exit price : 2.47/2.60 & 1.77/2.05

Holding time : > 5 mins / > 2 hours

Net Profit : $23 & $82

It has been quite some time since I last traded. But am back in action now! It’s all about time management, huh? Part and parcel towards becoming a full time trader. 2 trades to profit over $100, but the holding time was rather long for the AMZN trade. Rusty, I guess. Let’s polish up!

Mar 26

Reignite the fire

full time traderOopsie.. guess I can’t be a full time trader after all, not this 2014 year. Have been neglecting this business income since the turn of the year. Why? Why? Why? It is not that I did not make money from options trading. It is also not that I have stop believing in options trading. No! No! No!

In truth, my other commitments have taken a toll on me, and my vision, my ultimate objective was smogged. I gotta clear the air, and reignite the fire within. I should start attending motivational talks, relating to options trading perhaps. Who are the gurus still in play in Malaysia? Ah yes, the marathon runner, Mirriam Macwilliams and her proteges. Maybe I should take inspirations from them since they are the longest running options trading programme in Malaysia. Oh, Freely (Dr Clemen Chiang), where are you?

Enough grunts. Will need concentration and focus before diving into the market again. Need to cultivate the emotions and psychology. Always remember that trading psychology is the utmost important factor in trading and making money from the market. May the Force be with me!

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