Full Time Trader - Update

[dday97]

What a great crazy week. Had lots of fun and some interesting conversations with the traders out there. Anyway, I had some very good results.

My main portfolio didn't see a winning/losing percentage yet because I'm scaling into some trades and adjusting other aspects of the trades & spreads that I have. But I do like the way they are setting up. I'll see where I'm standing more during expiration week.

Swing trade portfolio. This is my day-to-day moneymaker. I actually had a great week. Some of my best trades were with oil puts (USO options in particular). I put a fun trade up in the group area but I don't think people go to the group so I probably won't do that again. I also did well trading in/out of index futures options. I basically did this by watching the dollar. I had a few others but you get the idea.

My winning percentage was around 72%, which was higher than I anticipated but things seemed to go my way. I'd be happy with 60% seeing that it's all about money management anyway. Meaning cutting losses at 20%, aiming for singles and hitting a homerun from time to time.

Next week should be interesting as well. I'm set up for a down week overall but have my safeguards in place. Enjoy.

 

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[bflbob]

Thanks for the update!

 

[dday97]

Odd trading day today, not too much out there to do so I didn't force the issue. Pretty tight trading until the end of the day. Made two basic swing trades with DIA puts seeing they couldn't hold 12,600 and USO puts based on the dollar movements but more importantly, if the CEO of Exxon says oil should be $60-$70 a barrel then who am I to argue. I kept the USO puts but kept tight .20 stops on them in case some hedge fund gets squirrly, at the least I'll make .10. Got my finger on SQQQ calls and or DIA puts. The Dow is actually keeping our heads above water based on my index levels. If they drop to 12500 and can't bounce or hold it then the week could get really rough. I guess we'll see what the morning brings.

 

[PokerRich]

dday, it's nice to hear from a trader with a lot of experience and I really appreciate your posts. I have been trading actively for the last 2 years (70% options, 30% stock) and have taken the plunge in trading full-time since my profession (poker) was taken away recently. Do you manage your LT and ST portfolios out of the same account? When I wasn't day trading, I never had a problem with looking at losses in the morning because I knew my system made 1-3% a month. Now that I am day trading out of the same account, if I have $1,000 in losses to start the day I have a bad mental block trying to "overcome" that loss. Curious if you have had any issues with this.

I hear you on the kids, I have 2 young ones and have had a tough time balancing their time with my trading time during the day.

I noticed the market closed just above your 12,500 point. I am looking to place my bets to the downside for next week after doing my broad market research tonight. Definitely looking to build a short position in the XLF if the price action cooperates.

Thanks again for your posts here.

 

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[dday97]

PokerRich,

I used to manage all my portfolio's in one account but I don't any longer. What the numbers looked like at the start of the day never really bothered me as much as I just started getting confused on what portfolio I was trading in/out of. I have an allocated amount to each portfolio and that's just impossible to keep track of in one big bundle.

I have 3 accounts now for seperate purposes. Long/mid term account. This is where I keep the very few stocks I own and also the long calls/puts coupled with my short sales of the same option. This account requires little maintaince, just some adjusting here & there based on big moves. Usually just before/after earnings but other volitile moves need to be addressed also, obviously.

Swing trade account. Day to day operational account, very active. Today for example I only traded the DIA & Q's (with SQQQ too) based on how the dollar was dealing with $76.00. Down trend buy calls, uptrend buy puts or SQQQ. Lately the market does exactly opposite of what the dollar does. The worse the Euro does the better the dollar does and the market just goes to hell. And I also trade a lot of oil futures and USO calls/puts. Today oil had a nice little channel going and was easy to trade back n forth.

Income/kids college account. This one makes 1-3 credit spread trades per month that only last 1 month. This account has made, on average, 10% a month over the past 7 months so I can't complain.

Hope this helps. As for tomorrow, I'd have to think that oil will sell off either before or after inventories and when it does I'll get the hell out as soon as possible because they like to bounce around. So I'll probably play the USO June puts for that with tight stops for when it breaks the other way. Of course I won't be sure until I see how Europe/Asia look early tomorrow morning.

 

[dday97]

Markets have low volume lately with some wild intraday movements. Oil started out on fire, got some puts when it broke it's second resistance line. Picked up USO 39's for .87 with a stop at .80. Guess we'll see what tomorrow brings. I'm thinking at least one more bounce down but I do realize that these thieves want to pump it as much as possible before the holiday weekend to bilk the consumer out of some more money while travelling. If I get stopped out or I make a little on a turn it looks like I'll sit out on any more puts until right at close on Friday. Any thoughts?

 

[dday97]

Questions arose at to what is the minimum cash allocation that one needs to set up similar portfolios so instead of answering 1 by 1 I'll just answer here. Again, these are minimums that I would feel comfortable trading in/out of, but I've seen people trade with much lower accounts. Obviously, the more money the better, you would have more options and leeway, but that's not the purpose of the question. Plus 3 accounts isn't a rule, just my way of trading so if you only choose 1 or 2 accounts, then you're starting capital could be significantly lower.

Long/Mid-term account: Min-$25g. Ideally-50g-100g. I've seen good traders start with 10g but that is too confining and stressful for my taste. With 25g you can make you're trades, get into spreads and still have a min. of 30% cash reserves to be able to roll or double down a position if need be; possibly even multiple times which is sometimes the case. With 10, you have to be ultra picky and much more conservative with your spreads. This if fine if you're well disciplined.

Income Account: Min-15g. Ideally-50g-infinity. I've been making 10% monthly on this for the past 7 months. If you have at least 15g, you can make some good money month to month. You can do this with less amounts ( a friend of mine has 10g) but the lower you go, the more the trade costs eat into your profits. For example, if you did this portfolio with a grand, you'd MAY make 10 percent, so 100 bucks. Now if this particular trade has 2 legs and it cost you $10/trade (leg), that's $20 bucks coming AND going so you're already down to a $60 dollar profit. So sure, it can be done if you're happy with smaller profit margins.

Swing trade account: Min-10g. Ideally-However much you're willing to lose. Swing trading and day trading are similar but different. But really they are both just educated gambling. The better & more experienced you are at reading charts & the correct indicators, the higher you're odds of winning. Plus the key is to take small wins and small losses and hit the big one from time to time. So sure, you can do this with $500 dollars but one wrong turn and you're account is gone in basically 1 trade. I actually started mine in the early 90's with 2g and got lucky. So it can be done with less with tight stops, but you can stay in the ballgame longer and be able to double down if need be with more money.

Hope this helps.

 

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[zr1]

I agree with your recommendation dday. Just wanted to contribute my two cents in here. I mostly do iron condor monthly trades and aim for 4-6% and have been doing well this year avg 6% per month. I keep half of my portfolio in cash to make sure I leave room for rolls or adjustments. I prefer the iron condor to give me the freedom and let time decay work for me.

 

[dday97]

zr1, those are great returns. I don't limit myself to what kind of trade I'm using in the income portfolio, only that I always use a credit spread. I have used Iron Condors in the past and I'm sure I will again at some point. If that's all you use I'll have to hit you up sometime when I'm thinking about trading into one. The one I have this month leading into June is a Call credit spread. Do you by chance trade RUT?

 

[PokerRich]

This week, I have just been day-trading the ES while I figure out what I want to do with my bankroll. I haven't paid much attention to commodities but it looks like your options are moving in the right direction and didn't hit your stop. I have no idea how the market is going to behave tomorrow with end of the month window dressing so I am probably going to stay small but I think you could add to your position at close assuming USO stays in its range. I like buying vol at these levels.

I like your account min. suggestions. Personally, if I had less than 30k I would just swing trade until I built my account up rather than trying to hit singles with an income account but that is just personal preference.

 

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[dday97]

One more week of trading came and gone. I am in the middle of my 2nd two week stint as a full time trader. I can already tell you that the pink slip will be going out my employer after next week. I've realized very good results in my trading system and more importantly, I see my wife and kids much more. It doesn't hurt that when oil nosedived late last week I was well positioned in USO puts and futures that I had sold. Even without that ridiculous gain I was winning about 68 percent of my trades and my losers never lost more than 20%. Like I have said in the past. Take small losses, aim for singles and hit that occasional homerun. And when that homerun is hit, laugh at life and have a good time with some of your winnings. Let's see what this week brings.