Over the past few months, I’ve seen my portfolio whittle away to almost nothing. Granted, I started with practically nothing (in the market’s view) but still. After trading for nearly a year, I still have quite a bit to learn. However, some folks at thinkorswim have given me a task in order to refine my trading skills. In short, in order to be a great trader, it pays to be a specialist. That is, if you want to become an options trader, trade only options and nothing else. Futures trader? Same thing.
There’s a twist to the homework assignment. Now that you’re focused on being specialized in a vehicle, take that one step further and specialize in a single underlying and just that single underlying. Learn how it moves, how it trades, what items affect it. Learn it for an entire year. While that seems somewhat excessive, it does appear to be a good exercise in focus and trading refinement. That’s why I’ve decided with the transparency of my trades, Visa will now be my project. That’s right. Visa will now be my bitch.
I will try my hardest to trade Visa exclusively. There will be times I will deviate, if only because some setups out there are so blatantly obvious or the Option Addict is on a tear (when is he never?). So starting tomorrow, here’s the game plan for Visa now that I’ve sold what May calls I had left on it.
There’s the short term game plan for Visa. I’m waiting for a short term pullback near the $83 region. With the recent $15 run-up in 48 hours, I’m expecting some sort of a breather. The other alternative is to buy on a breakout of $87.50, or today’s 52-week high and maintain a tight stop. With May options coming close to expiration, I will most likely be looking at June calls, somewhere in the 90/95 area. I don’t forsee Visa heading below $80 any time soon to be quite honest.
Let’s see how the game plan works tomorrow. Good night!