Category: Readers' Posts

Kadena is probably one of the readers who has been around My Trader’s Journal longest.  He’s in the US military stationed in Asia and trades while he could be sleeping.  He comments often and we exchange emails more often.  I received this from him last week and he said I could share his results from day trading.  I thought this was very interesting considering where he was just a few months ago. In September I posted this story from Kadena, that shows how he lost $30,000 in three months.  That was 75% of his portfolio.  He lost more after that before figuring out a day trading system that seems to be working better for him. 

He sent me the following screen shot of his trades.  You can see he’s starting small and staying small to get big.  His strategy is to make small gains every day.  He had a long streak that just ended with some small losses, but he doubled his account value in a month buy taking small bites.  His plan is to day trade and exit positions before market’s close.  He hasn’t stuck to that on each day, but bases his strategy around this.

I find it interesting to read other’s trading plans and details.  I’m assuming you do which is why you read my trade details, so enjoy another trader’s …

I exchange emails with readers on a fairly regular basis and occasionally try to move the conversation to a blog post.  One of the newer readers and commenters, Josh, sent me a few good questions that made me think.  So, I figured I’d try to answer the best I could in front of everyone since others might be wondering the same questions and have more they can add to the discussion.

If the stock you purchase trades against you is there an adjustment strategy you utilize to lessen the shock of capital drawdown?

A month ago I might have answered differently, so keep in mind the foundation for my answer is flexibilty.  If I’ve been assigned a stock from a naked put or look like I’m about to I first have to decide if the stock is worth keeping.  If it is, I sell a covered call to try to keep a profit.  If it continues to drop, I have to reconsider and might sell an other call, although this one would NOT be covered, it would be a naked call and therefore a lot more risky.  I sold a naked call on AA a few months ago and wrote about it here.  It worked for me then as the stock came back above the naked put strike and stayed below the naked call strike.  That gave me …

I received the following email this morning from a reader who asked to remain anonymous, but thought his story would be a good lesson for many others who are trying to learn how to become better traders. 

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First, I had 14K in PUTS I bought and lost 11K the day of the surge. My account balance was $38,000 end-of-May. Today I have just $8,000. I managed to lose 30K in just 3 months! Good for me! No, seriously, this is the case. My wife and I are dealing with the setbacks very well, as I am in the military with good security, and the chance to “do-it-all-over”. Here’s something I want you to twirl in your mind a bit. Because of your family’s new highs of 68.5 with another deposit soon, leading you to deal with seemingly larger sums to play if you can’t find enough plays, think about my case. I was the same way in that when I had the 38K, I didn’t realize HOW MUCH it was, and simply did not diversify and was overloaded in plays. Then, of course, after the first bad play, desperation led me to chase profits back in the riskiest ways. Humans can be so foolish. Well, we both know you have never overloaded, and it seems as though you mentioned putting 25K in a safe place …

The following is from one of my regular readers, Kadena.  Kadena is in the US military overseas and trades after he’s off duty, during his nights.  If you want to share your trade stories with everyone, you can email me with what you traded and why.  My email address is thetrader[AT]mytradersjournal[DOT]com.

Today I opened 5 different kinds of bull plays on AIG.
The first is simply bought stock in my E*Trade account for the long term, so no expiration here to worry about.  Very timid, 20 shares at 65.85.  The other 4 plays are option moves in TOS broker.
1. Single call buy Jan08 60 strike for $970.
2. Single call vertical contract buy Jan08 55/60.  Paid 13.60 for the 55 side/received 9.20 for the 60 side (hedge) total paid $440
The total risk in these 2 purchases is $1,410.  Profit potential of mere $60 for vertical at expiration or can trade the vertical for profit if situation arises.  And the call can be sold for unlimited profit if AIG moves up.
3. Single put naked sell Jan 08 50 strike for 1.10.  credit if AIG remains above 50, $110.  potential to trade ahead of time
4. Single put vertical sold Jan 08 60/55.  Received 2.85 for 60 side/paid 2.00 for 55 side(hedge) total received $85
 
I wanted to work off of 60 strikes for Jan, except for the naked put went all the way down …