I kind of sweated about what will happen with my trade (especially that I told you guys that I’m “good” whichever way the market went, I’m still a little nervous). After all, it is my first week trading again.  Anyway, the US Market rallied strongly on Friday(Saturday here) which I expected togive a big boost to Asian markets today (Monday).  The EU did not come up with a stellar result as yet, more like “juicy tidbits” that keep us wanting more, but the Australian market rose throughout the day.

STO  rose moderately  by lunchtime, (+25 points) bringing me closer to breakeven territory.  The STO premium I paid was 7.5 cents and by then, it’s value is between 12-15 cents. My breakeven was 17 cents

Premium paid = 60

Fees (open and close) = 74.22

Breakeven = 134.22 or  around 17 cents per share

How do you think I felt?  A bit excited but a bit worried. Why?  The market is pretty volatile lately and the US (Dow Jones)  might have done an “advanced celebration” on the EU debt issue since it rallied  267 points on Friday, so I attended to my work in the office to stop myself from taking the (small) profit that I’ve made by mid-day.

Then I remembered that I haven’t done my my trading procedure – I skipped doing it early in the morning (as I was preparing tax filing), so I went in did the preparation steps, then the monitoring part where I noted again, my system components, breakeven points and the profit-taking exits.   Felt better after that (I guess it’s from being “clear” on my targets)

After lunch, the price is still up at the same level  – which is a good thing, meaning it has not dipped due to low volume of buyers, there is sustained interest to buy and in the afternoon, actually started moving up faster.  I reminded myself about profit-taking “guidelines” – that if the market is moving fast in your favour, sit back and let it give you money!

The day ended 12.52 up 42 points, which is a strong move up (against the 5 points move up the previous day).

We’ll see what will happen today (Tuesday). US Market was up by as much as 140points but now at 94 points with 1 hour left to close the session.

That’s the trade so far! With the  2 opposing positions, I am profitable.

It’s a guilty pleasure and I want more.

Result for 2 Opposing Trades

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I finally had 3 hours of  “me” time to go for a hair appointment  yesterday. This week was a fresh break from what I’ve been doing the past months.  Instead of crunching down on the book, I was able to actually get some spring cleaning done, go for walks and catch up on tax paperwork with beauty rest-on-demand in between.  Lovely.  Which is just as well because the shares I am holding for active trading has recovered nicely from the falls in price and  I, myself, am “recovering from the book” and   “ready to rhumba” – get into position for a trade and get the trading income flowing again (and still have a life!)

I was waiting for an opportunity for the share price on STO to move up because I bought them at about 14.50 early this year and did not put a protective stategy in place (was too busy that time which caused me to squirm when the market dropped sometime in the last 3 months).  Anyway, I thought that the Big Picture (e.g. government moves  particularly by European Union and US Fed) will and eventually did, calm the world markets / and get my shares on STO into more realistic values  so I hang on to it (my stop by the way was 20% – wide enough I thought, but I “overrode” it given the strong government motive to support the markets).  Let’s just say I “rode rough waves” and survived, but I’m not doing that again!

MONDAY

So at the start of this week STO’s price was at 12.25  and the chart for the preceding week showed an up trend.  With the volatile nature of the market, I thought a good trade might be found.  I was doing my trading procedure (to be revealed in the book/ebook).

TUESDAY

Price still moved up but within a lower range (20-30 cents ), so I waited some more, it went up to around 12.60 (previous high) that day, but weakened to 12.45.   I continued to wait for the opportunity.

WEDNESDAY

US Market provided a weak lead, so I got ready to look for entry point.

I’m going “short” or putting a strategy to profit from fall in price.  Since I am holding shares, I can do a Covered Call strategy in Options. (You can review Options here). With a move down to confirm my expected direction, I sold option with 12.00 strike price expiring in Nov, receiving 85 cents.  My breakeven is 12.85.  My 1R risk, which I’ve predetermined (from Position Sizing – my current  size is $200)  is 15cents so I am targeting 3R profit of 45 cents.  With the 85 cents I received, that profit target is covered, however I will incur a loss should the price move up past 12.85.  I then have to be on alert  about this breakeven point so as not to incur a loss on the shares.

THURSDAY

I had errands on. I had my “protective strategy” with that covered call in place so I can go about my day while the market does whatever it wants to do.  I got my son and toddler on a “fun ride” on the red bus to the city and did some paperwork at the consulate, then got ice cream treats on the way back.  Checking the phone, I was surprised the whole Australian market had a steep fall by mid day. Apparently, the EU will have meetings this weekend and Asian markets fell reacting to news that there is a wide disagreement about the bailout fund, so, I went about my day — secretly happy.

My son wanted to ride the train, so we went to walk to the heart of the city – but made a wrong turn.  Which is just as well because I spotted an “Italian Shoe Importer Outlet” – which you know, I had to check out! Hehehe.  Anyway,  20 minutes passed and I came out empty-handed, they didn’t have my size on the ones I wanted.  Proceeding out though, we were made to go past an adjoining store which had a ramp (for my toddler’s ride)  — they have other Italian imports –branded handbags, jeans, sunglasses.  From when I remembered that my sunglasses just broke and need to be replaced! (Shades are a must here – UV from the sun is too strong harming the eyes plus you’d have to squint all the time and get wrinkles!)  So anyway, I snagged a bargain in the process that I can claim from insurance (sunglasses with prescription lens).  In case you’re wondering my kids were quietly waiting (babysitting courtesy of the Iphone apps hahaha).

Attempting to make "Bande" Cashew Nuts

Oh, STO moved lower that day to 12.07 making my trade profitable.  It did get me excited but had to hold off closing the trade and let the market move in my direction. I went to an Asian grocery to get my mind off profit-taking mode that could cut short my profitable run. I got a bag of cashew nuts and palm sugar to experiment making  “bande”, a delicacy I enjoyed at a friend’s.  Nutty and sugary, guilty pleasures they are called.

FRIDAY

US Market had a swinging session, but ended up.  And it’s Friday, which almost always lead to weakening of prices for the shares I hold (possibly due to short term positions that are closed to avoid  overnight risks from US – this is my observation ) so again, secretly happy.  My shares went up in the early session, which eventually fell towards lunchtime.  By then, the price of STO has been forming a floor on the 12.07 level, and I thought, I might just put in a new position.  In the economic / Big Picture front, the EU was going to have a big meeting on the weekend (they’ve been yakking about a bailout fund which according to some news is going to be a “convincing” 1.3 Trillion fund), so potentially, the market will react strongly afterwards – either up or down.  At this point.  I thought, I’m protected at down moves, but not on the upside.

So, I did my trading procedure which pointed to an opportunity for Long position (profiting from move up).

I picked the Call Option with 12.50 strike price.  This cost me 7.5 cents and I bought 800 shares, costing me $60, plus fees (to open) of 37.11 =  $97.11.  My breakeven price is 12.575 for the shares and  3R profit target is $260

.075 x 800 shares = $60

$60 x 3 = $180

$180 plus fees $80 = $260

$260 / 800 =  .325  per share

I chose this to ensure I trade within my current position sizing ($200).  This trade will let me profit from the expected strong move up brought about by the EU meeting, but if the market is not happy with the results and lead to falls, my risk is small and tolerable, and my existing covered call trade will be profitable. Also if the share price does not move beyond 12.50 in the near term, I am still exposed on the covered call but, my position sizing will allow me to take another opportunity for further protection as needed.

So here’s the deal:

If price is below 12.50 – ‘covered call’ strategy is profitable

If price is above 12.575 – ‘buy call’ strategy is profitable

Which means either way, the trades are going to be profitable.

So what are you waiting for?  Get your guilty pleasure.

Guilty pleasures - photo by AJ Mallari

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Have you lost money in stocks or currencies or any of them financial markets?  You are not alone.  I’m posting the article “Hedge Funds Suffer worst losses”  just to give you a little bit of comfort  (misery loves company hehehe).  But hey, we are here for the long term remember?  And if you have versed yourself with position sizing, then you should have done the right thing by now and lessened your money at risk.   I was not actively trading in the last quarter as mentioned in previous post. But  I did post about  using Options strategies  to ride the volatility or step aside.  Will come back with a post  on how to move forward as I just have some tax filings to do. Hang in there.

http://money.cnn.com/2011/10/19/markets/hedge_funds_performance/index.htm?iid=HP_LN

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Had a lunch date yesterday.  It is pleasant to be able to go or do something on a whim.   My colleague here told me she wants to catch up over lunch and ask “the share trading expert”  (surprise!) while I’m just happy to chat.

I might go on a walk for lunch today, have to shed off some accumulated fat in the midsection as I’ve been sitting down a lot!   Anyway, my colleague mentioned that she’d like to learn  more about this share trading, she seems to think I’m a hardcore trader,  spends a lot of my time trading and so on.   I told her, I did go through that phase being glued to the computer and stock charts etc before which didn’t really give me spectacular results, so I thought I’d share my weekly schedule  and trading activities  slotted into the week.  Basically, I trade on my own sweet time.  I do have to figure out the best time for them among the other things I have to do, but I trade when I want to.    The trading procedure is divided into 4 parts, so on a particular day, I’m probably just doing one part.  The longest part is the preparation, which really sets up the basis for your tradings and takes about 5-15 minutes depending on how well-versed you are with the concepts required.

Overall, I think it’s pretty flexible once you’ve setup your trade, you just monitor it with a smartphone or end of the day (depending on your chose timeframe).  The book discusses this at a high level, but here is one of my old schedules just to give you an idea (I need to update this after having just finished the book writing process — got to first catch up on spring cleaning the house, filing, preparing tax etc).

Weekly Schedule

Trading Activities

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Well, we are often told NOT to judge a book by its cover, but in this case, please do!

I’d like to know which cover design would appeal to women and that with this book,  they can expect to learn trading using what they know and have a laugh along the way:

Book Cover 1

Book Cover 2

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My laptop suddenly conked out last week – in that morning I successfully submitted my book draft for layout. Which probably indicated how exhausted we both were, and while I went on an eating binge and sleep-ins, my laptop went to rehab. This is one of the (disastrous) things to prepare for when trading. Good thing I have a backup plan in place – what do you know I’ve got an iPhone- which I use to keep tabs with stock prices and market news – and while it’s not convenient to type up this post – at least I can tap along this message that I really need to get out — in addition to having back up plan — is to encourage all budding traders, all you who are learning this as a step up in your magnificent lives, the same advise given to tech startups by Apple founder Steve Jobs – “Start it and stick with it. CHANGE the world.” Thank you Mr. Jobs – you are a fountain of wisdom. We will miss you. I heard the day before you died, they released the newest iPhone called 4S – which a lot of people say falls short of expectations and carried a name that left people with a blank look. But now it makes sense – 4 S – 4 Steve — entirely appropriate – a product that carries sentiment of thanks to an icon of our times.

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Flower power

Look at me, I’m beautiful!   Each and every one of those thousands of  bright, beautiful, gorgeous flowers seem to be saying. We don’t mind that shameless declaration don’t we.  And we don’t mind sitting on our butt for 3 hours to go see them too.    Over the weekend we went to the Floriade–  annual Spring flower display.  So you can say my weekend was in “don’t care” mode even when the markets have been falling like dead flies. I heard gold plunged $100 in one day (didn’t get to  capture the news) but this Monday’s  last session it fell $45 so I guess it can happen. And the stock market was 300 points down or something.

How about you?  How was your weekend?  Were you watching the markets and nervous about what’s going to happen?  Were you furiously thinking of how to make back the loss if you had a position?

You poor thing.  All while I am enjoying the company of these beautiful beautiful beautiful flowers.  You were panicking!  Come on, it was the weekend, next time don’t let it go to waste!  Weekends serve as our “recovery” period.  Get some rest, have some fun, markets are close so no use worrying, you don’t panic over the markets.   As we opened the week, US market was back up nearly 300 points.  What’s going on???

I am beautiful!

Here’s why – hope springs external.

1.  While you are panicking, there are others excited about the fall in prices and wanting to go back in the market and buy cheap.  Warren Buffett is one of them, now he is the most successful investor of the whole wide world so what he does is not necessarily what everybody should be doing (because he knows what he is doing)  but you can find out more if you have something in common with him to do what he does.  What he does is invest in companies as a business he says.  He likes it when the markets go down because he can afford more shares of the companies, which increases his ownership and share of the profits.  The companies that he buys are not any company though, so do your homework and check out what and why.  Alright, I will post about it.

During the depths of the global financial crisis when there was no solution (e.g. stimulus programs on sight), he bought shares of Goldman Sachs, today, he did something very rare – he bought back shares of his own company Berkshire Hathaway.  What does that tell you?  He’s got confidence on his own company making more profits (and buying shares of it back keeps the profits in the company).

“First, the company has available funds — cash plus sensible borrowing capacity — beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively calculated,” he wrote.

He is very conservative person, yet at these times, he does something bold! That has to get the rest of us thinking!

Here’s the news article:

http://www.bloomberg.com/news/2011-09-26/berkshire-to-repurchase-shares-saying-stock-is-undervalued.html

The Europe Debt issue is also in the play, but will write about that later.  Time to cook breakfast.  Take care.

Bold and beautiful

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I am nearly finished with the book! I sent the draft to my teacher in the advanced workshops –  Dr. Van Tharp who have cleared it (I asked his permission for use of his concepts and trademarks!) What a relief!  It would have been fun to see his face reading the girlie analogies I’ve put in there explaining his concepts HAHAHA.   In case you are wondering  Dr. Tharp is a world renowned coach of professional and private traders and best-selling author of books on trading and peak performance. He is also president of Van Tharp Institute (click the link for website).  I took his advanced courses and workshops for over 4 years — I’ve got to say they have the best (it makes sense and it works)  and most comprehensive trading program–which I introduce to you through this book.  (Only the best for you guys!)  He’s based in the US and comes to this side of the Pacific and Europe once a year.  In the interest of disclosure – I don’t receive any payment from them – I believe you can get the best education from them, which I use that’s why I tell you about him and his work.

Anyway, I have been laboring on the images that would go into the book.  So will post some on the trading subject later OK.   Meantime, relax and chill…  I’ve got this video for you to enjoy!

 Ave Maria sung so beautifully by Barbara Bonney…

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Wild swings again in the market…. are you nervous?  Check out this video from CNN Money.

http://money.cnn.com/video/pf/2011/08/16/pf_hirschorn_fear_mkts.cnnmoney/

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