Tuesday, July 31, 2007

 

Trading Rules

Adding one more..

1. Buy options that have at least 3 months expiration on them. One month expirations are a bit too volatile for me.
2. Don't fight the trend.
3. Respect stop loss. I'm thinking of keeping it around 20% for options.
4. Don't average down.

Hmmm.. haven't been respecting rules 1 and 3! I better take a printout and stick it to my wall.

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Comments:
AJ,

i feel your pain my man! that great cramer pick (TCK) lost me over 50% of my investment. why, because i broke my rules (2 actually). i bought too soon (stock was over bought already) and didn't sell when the stock broke the 50MA. i'll tell ya, my list for today has some great names on it that, according to me, are oversold but i can't buy any options in this market. here's what i would like if we were in a bull market:

AV
CNH
SII
RIG
AAPL
RIMM

now i'm trying out some long Put strategies, what do you think of NSH for a short?

j.M
 
j.M,
NSH looks like it's printed a hammer-like pattern today, so I'd let that play itself out, in case it does bounce. It's also gone below it's lower BB, so it could bounce because of that. It has broken below the 50 day MA, so it could be a little weak. But in such a volatile market, I don't know what to think anymore :)
Aj.
 
alright AJ,

here we go, i'm jumpin in head long! tomorrow i buy at the open and sell at the close. question is; do i buy:
GRMN (unstoppable right now, $100 is imminent, another DRYS-type move?)
http://stockcharts.com/h-sc/ui?s=GRMN&p=D&yr=0&mn=6&dy=0&id=p28171870759

NOV (oversold W%R, bounce off of 30MA)
http://stockcharts.com/h-sc/ui?s=NOV&p=D&yr=0&mn=6&dy=0&id=p28171870759

or should i buy both?
j.M
 
hey nice call on PLCE by the way! i must have missed that (vaca last week) until i just scrolled down.
that was a Put, by the way, right?
j.M
 
Hi j.M,
Yep, GRMN's got strength, I'm keeping an alert above 98, which i think should easily be taken out in the morning. Will see how that goes.
NOV, looks like a pullback and bounce off of the 111.50-112 support area. I'm not sure how I'll play this though.

PLCE, yes it was a put, made the correction in the post. Thanks. I sold it too soon though, could have doubled my profits had I held on to it.
Good luck for tomorrow's trading.
AJ.
 
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