Investing Adventures » XL

Daily Update – July 2, 2008

Jorge — Wed, 02 Jul 2008 23:43:53 +0000

Another rough day in the markets and yet another new high for my portfolio. The portfolio is now up over 20% from the start of my trading, well off the 50% losses I was experiencing only a couple of weeks ago. Today’s closing trades included profits in XL, LM, CY, and SINA with losses in HRB. HRB hit my generous stop of $22 and so I’m out with my max loss. The winners combined for a total of $1500 in profits.

Today’s Profits / Losses: +$1219.00

Contracts traded: 17

*** New Portfolio Highs ***

Although my portfolio has hit its highs, my current risk allocation will remain unchanged until the end of the month. I need to make sure my new trading plan is working and that this run on the new highs isn’t based on sheer luck. I am expecting some writedowns in the next couple of days which will damper the fun a bit but nothing ever goes straight up or straight down.

Daily Update – July 1, 2008

Jorge — Tue, 01 Jul 2008 23:50:01 +0000

They weren’t kidding when they said markets generally close higher the first day of the 2nd half of the year. I was rather disappointed at the bounce this afternoon. It felt more forced than anything else. In any event, I went ahead and lightened my put positions a bit by selling off a third of the financials I held. I currently have 1 contract of XL and LM remaining. I also sold off a contract from my CY puts. The bounce, while it didn’t feel well, still didn’t leave a great taste in my mouth. If anything, I can always reload tomorrow.

Profits/Losses Today: +$664.00

*** New Account High! ***

Daily Update – June 30, 2008

Jorge — Mon, 30 Jun 2008 20:15:13 +0000

Today looked to be a fairly mild day until about 15 minutes before the close where everything began to tank. I’ve been running a fairly heavy negative delta portfolio so I benefited quite a bit from the last minute sell off. I went ahead and trimmed my positions in XL and LM by a contract each, reducing my negative delta by about 120 points. I still own 2 contracts of XL and LM and expect both to continue their downward spiral along with the rest of the financial group.

Total Profits / Loss: $336.50

You can also get updates from myself (hopefully) and others in the newly revamped Virtual Office hosted by Tokyo Trader. ありがとうございます Tokyo Trader。

I am a Trend Trader

Jorge — Mon, 30 Jun 2008 12:43:25 +0000

Over the past few days I’ve come to realize something as my portfolio’s reaching for all time highs. I am a trend trader, not a swing or long or day trader. A trend trader. As usual, let’s see what Investopedia has to say about it:

A trading strategy that attempts to capture gains through the analysis of an asset’s momentum in a particular direction. The trend trader enters into a long position when a stock is trending upward (successively higher highs). Conversely, a short position is taken when the stock is in a down trend (successively lower highs).

Over the past year I’ve tried a little bit of everything. I started stock trading on Zecco. Buy and hold. Didn’t work and was extremely slow, especially with a small account. I could have tried to trade penny stocks, but the stigma of the pink sheets was, well… crummy. I found options and started trading them exclusively about a month after my buy and hold phase. Jumped onto thinkorswim’s platform in November after finding the Option Addict .

I learned the ways of the technical analysis over the following months while attempting to trade options here and there. I’d try picking them at what I thought were decent entry points and exit at predefined percentage gains. And yet, I nearly blew my account out. About a month ago, completely out of nowhere, a light bulb went off. It was something so easy that anyone would be surprised why they didn’t think of it earlier. And it all led back to the main reason why those few traders out there are the successful ones. It’s all about the risk and money management. The minute you learn money management, this game becomes much, much easier.

Money management (possibly) under my belt, the next step was to increase the war chest. Over the past couple of weeks, I’ve been placing trades left and right, tapping my account out on multiple occasions. Never had I traded so many contracts and so many positions all at one time. But so far it’s been fairly comfortable. And how have I been doing that? Riding trends. I am not a day trader. I’m not a short term trader nor am I a long term trader. I am a trend trader. I pick my entries at support/resistance and ride the wave.

Example? Look at XL Capital (XL).

Will it always be that simple? I doubt it. Am I just lucky? Perhaps. But I have noticed one thing. Even three months ago, I would have sold and been done with the trade. Now? I’m finally starting to accomplish what everyone talks about. Let the winners run and cut your losers short. So far, XL’s been a winner. And the best one I’ve had to date. My identity’s been found. I am a trend trader.