Five Years

Five years ago this very weekend I opened up my first stock chart and thought, “what the hell am I looking at?” Moving averages what? Stochastics huh? RSI who? And what are Japanese candlesticks?! Y’all… I was literally googling things like “what’s a call option?” 

I was absolutely clueless!

Stocks had always interested me, but I didn’t have any money to trade so I never pursued it. In 2012 I finally got a little scratch together and thought I’d give it a shot. 

And of course I lost money… I started out trading options - took me all of 6 weeks to realize that wasn’t working. So I took a step back… I continued learning, continued studying, continued googling terms I didn’t understand, and most importantly I continued watching the market.

I lost money in 2012… but in 2013 I got hot! Instead of buying options, I was selling them and collecting the premium. I primarily played credit put spreads… and man, I was rolling. I did well in 2013 and thought, “I got this thing figured out!”

You can guess what happened next… I got off to a fast start in 2014, but by the end of that summer I had found myself in some very toxic positions - losers that I had continued adding to (BIG mistake). I got SMOKED in 2014 - and I almost quit. 

In fact I took off several months. I even moved some trading money out of my account and into my Roth IRA. I was spinning my wheels at this point. I spent WAY too much time trying to trade and made ZERO $$$ - hell I was LOSING $$$!

But for some reason I didn’t give up… In 2015 I was able to make some good plays here and there. I found success in trading stock only. Now look, some people may be successful option traders but I ain’t one of ‘em! Even though I lost money in 2015, I FINALLY started learning the most important lesson in trading - CUT YOUR LOSERS!

In 2016 I found my groove. It’s hard to explain, but I started seeing charts patterns very differently. I knew what I liked and what I didn’t like. I knew what had the best chance of success and what didn’t. It became intuitive. Next thing I know I’m two months into the year and I’m like, “wow, I’m on FREAKING fire!” 

Sure I had my struggles last year, but I was able to bounce back from every draw-down. For me, the key was NO ACCOUNT CRUSHING LOSSES! None, ZERO, not a one! And THAT’S why 2016 was my best year ever!

2017 is off to an even better start and I’m proud that I can finally call myself A PROFITABLE TRADER! 

Now look, I get that it sounds stupid to celebrate making like $1,300 for 5 years of work - that’s like .0000000001 cent an hour, BUT I really don't care! I love this shit! And I can say what 95% of traders can’t - “I’m profitable.”

I’m certainly not writing any of this to brag - truthfully I have little to boast about. But I do share this to encourage you folks out there! If I can do this - so can you. Growing up I was an average student… I spent 6 years in undergrad (I liked to drink a lot), worked in the TV business, and now spend my days between non-profit work and media production.

I’m not the smartest or most talented guy out there, but dammit I’ve worked my ass off learning this craft from the ground-up, I manage my risk, I kill losers dead in there tracks, I wish I rode winners better (I still suck at that) and this is the most important thing - I NEVER QUIT! 

Here’s to 5 more years! 

Back in the Saddle Again

I’m scared to death to write this post.

I feel like... if I put this out there for all to see I’m gonna jinx it!

BUT... here I go anyway... I absolutely KILLED IT this quarter! I’m up nearly 30 percent! Now, for many of you this does NOT constitute “killing it”, but rest assured for me it does.

It’s been 11 months to the day since I last posted. Back then I was over-trading with positions too small, getting smoked by commissions and poorly placed stops. I couldn’t seem to hit much more than 50% of my trades, I was cutting winners way short and letting far too many losers run!

I was also coming off a horrendous 2014 in which I lost nearly $6K... a substantial chunk of my $20K account. 

I was trading from a place of negative emotional capital.

So pretty soon after my last post back on May 1st of 2015 I stopped trading - completely. I was spinning my wheels, getting nowhere and eating up A LOT of time.

I wasn’t quitting - I just needed a break, a BIG break.

So I hit the pause button... actually took some of my trading capital put it in my Roth IRA and sat on my hands. I didn’t trade for months. But I never stop watching the market, observing technical set-ups and taking mental notes. I was constantly “working” and learning... I just wasn’t trading. 

So when this year rolled around, armed with a much smaller account of $6,725, I decided to SLOWLY get back in the saddle. 

Here’s what that looked like... 

  1. ABSOLUTELY NO options. 
  2. Do not over-trade.
  3. Play VERY conservative, slow moving names like MO, KO, and JNJ to name a few
  4. Enter set-ups you are comfortable with... do not fight the trend.
  5. Since I’m in more conservative names I can trade bigger size and use margin
  6. When you get a profit - TAKE IT!
  7. As soon as the trade turns against you - GET OUT!

I can go into deeper detail on these points, but this is the basis for what I’ve been doing in 2016.

The bottom line is this... I’m seeing things unbelievably well, so well it’s a little scary! You know in baseball when a hitter is on a big streak he’ll say “I’m seeing the ball really good... it’s about the size of a beachball!” Well that’s me right now... I’m seeing set-ups very clear and when I enter the trade it just seems to go my way right off the bat. It’s a wonderful time, and I’m enjoying myself.

Here’s a breakdown of my Q1.

68 trades = (16 option trades (yes I added some in the mix) & 52 stock trades)

Stocks = 36 winners, 11 losers & 5 break-even’s = 69% win rate, & NO bad losses

Options = 9 winners, 7 losers (6 of those were bad losses)

Total Q1 Realized Gains = $1,987.38 (29.6% gain on original $6,725 capital) 

Now, I’ve still got a lot to learn. I’m not saying I have discovered any magic formula at all. I’m simply in a really good groove right now.

Lets just hope I didn’t jinx it :)

April 2015 :: Recap

Well not only did April bring the rains down here in Alabama, it brought the GAINS as well! Here's a look at the breakdown.

Option Spreads/Selling to Open Options - $257

Directional Option Trades - $190

Stocks - $14.19

TOTAL April Gains = $461.19

2015 YTD (As of 4/30) Profit/Loss - $681.34, a 6.81% YTD Net Gain

Now lets take a trade by trade look, starting with my directional option trades. This month I had 25 winners, 18 losers and 6 position are still open.

Now lets check out my stock trades. This month I had 27 winners, 24 losers and 2 positions are currently open. Unfortunately I let one loser get away from me and it cost me big time. I lost nearly $300 in KSS. That's all it takes folks, ONE LOSER to ruin an entire month. So instead of being up more than $300 this month, I made a measly $14.

A week in review :: 5 days of GREEN

In more than 3 years of trading I don't believe I've ever had 5 consecutive GREEN days! 

Thanks to a little bit of skill, a quite a bit of luck and a lot of help in Sang Lucci's chat room, I was able to find that consistency this past week. Check out the results!

Option Spreads/covered calls :: $252

Stock trades :: $178.71

Option trades :: $219

Weekly Total :: $649.71

Here's a detailed look at each trade and some brief notes on my performance. 

Option Spreads/Covered calls

1) PM June 82.50/80 credit put spread :: Here's where some luck came in... After PM reported a quarter that was not as bad as the Street feared the stock jumped an incredible 7%. I had been underwater on this trade since JANUARY! So I took this opportunity to close her out for a $142 gain!

2) T April 24 (w) 33/32.50 credit put spread :: Same thing happened in my T spread. I was red in this trade until the company reported Wednesday after the bell. I closed out the next day for a $65 gain.

3) X weekly covered calls :: I sold these calls to work myself out of a stock position. Unfortunately my timing usually sucks with these types of plays. I would have been better off NOT selling the covered calls and simply selling the stock for a nice gain. Instead I made measly $45 on these 2 weekly calls.

Directional Option Trades (5 winners and 3 losers)

L - KLAC (17) - Closed half position, other half still open

L - TWTR (151) - Expired worthless - BAD LOSS

W - DNKN $84 - a winner, but cut it short - POOR EXECUTION

W - HLT $5 - partial close, still holding some

W - WMT $52 - 80% closed, 20% left to run

W - AMZN $255 - perfect trade

W - LLTC $25 - looking to reduce open option trades

L - WBA (34) - good loss

NOTES :: I carried each of these trades into the week... I didn't open any new positions. I'm working really hard to be more selective. You see, when I first got in Sang Lucci's chat room I was jumping on EVERY alert WallStJe$us sent out. Now I'm actually unwinding some positions and scaling back. That's why you see "closed half position" in some of my notes above. I'm simply wanting to reduce my risk. 

As for my performance this week... it was pretty good. I did a decent job of cutting my losers short (WBA and KLAC) However I did let TWTR get away from me and it expired worthless for a 100% loss. These are just flat out UNACCEPTABLE!

I've also still got work to do when it comes to letting my winners run. Take DNKN for example... yes it was a winner, but I did a really bad job of letting this one run. Thursday it popped big time thanks to an earnings beat. I took half off the table that day for a small gain. Friday the run continued... and instead of putting in a stop, trailing it and letting the option run, I took my gains right off the open. I left a $100 on the table. I'm learning that it's almost ALWAYS better to put in a stop and trail the position than it is to sell on a limit order. 

A lesson I learned firsthand in my AMZN trade. The Friday before last week I bought the $420 weekly call option. The stock had pulled back pretty hard that day and I was able to get the option for $2.14. Well, come Monday AMZN started to move up... slowly at first and then it really took off around lunch time. Once the option got to the $4.20-$4.30 range I started to seriously consider selling it. Instead I decided to keep my stop in and walk it up as the option appreciated. I trailed the stop .15 behind the bid all the way to $4,79 where I was punched out of the position. So you see, instead of selling at $4.20... I was able to sell at $4.79. It was definitely my best option trade of the week... 125% gain, BOOM! 

Stock (9 winners, 7 losers (the X stock trade is not seen in this table))

NOTES :: I kept my losses small for the most part, but I've still got work to do on managing my winners! I cut EA, OKE and WMT short. I also botched my entries and exits on JCI and missed a HUGE run! 

My biggest victory in terms of execution AND profits was JD. I was alerted to it in the chat room Friday. I flipped to the chart and the stock had popped up to 34.77. I sat patiently as it pulled back to 34.45... then I pulled the trigger buying 200 shares. It was an excellent entry as the stock bounced up immediately allowing me to put a stop in at break even. It flagged around 34.80-.90 for about 15 minutes and then broke to the upside and through $35. I trailed my stop the entire time and was finally knocked out of the trade at 35.08. I was very pleased with this trade. For me, it was picture perfect. In fact here's a picture I took with my phone. The shaded bubbles represent my entry and exit.

It was the PERFECT trade to end an ALMOST perfect week!


Unfortunately I made a HUGE rookie mistake... I got into a trade with NO plan and NO stop!

I bought 100 shares of KSS on Thursday at 76.87. She went as high as 77.39... but I didn’t take the gains. Instead I held as I watched it retrace all the way back BELOW my entry. 

I never set a stop... I think because I wasn’t sure if I wanted to day-trade it, or swing it. People, this is a MISTAKE. You ALWAYS need a plan. Anyway, Friday hit and this stock took a DUMP. Now I’m trapped in the trade for the time being. I’m so pissed at myself, because instead of really enjoying the weekend and feeling good about my week I’m stuck thinking about this stupid trade. My emotional capital is taking a HUGE hit! (More on the importance of emotional capital in another post!)

But, moving on... overall it was a very successful week. I did some things well and I feel like I’m beginning to get a grasp on my emotions and my system. I know if I can make just 2 or 3 different decisions I'll really begin stepping into some bigger profits! 

People I'm close... I can feel it!

April Update

Hopefully this post doesn't jinx it, but I'm in the middle of a nice April. 

I wish I could take all the credit, but I've officially joined Sang Lucci's chatroom. His knowledge coupled with Wall Street Je$us' STEAM alerts have been MONEY! It's one deadly combination.

Have a look at the results so far this month!

Stock trades - 19 winners, 13 losers = $371.95 in gains

Now here's my option trades - 21 winners, 16 losers = $318 in profits

Weekly update :: Stops SAVE

At the end of each week I tally up my winners and losers. I’m looking for two things during this exercise... my win rate and my P&L.

The week before last I had 11 winners against 13 losers, yet I was still profitable by $114. This past week I had a much better win rate, 12-7, but I made less money - only $37.

So here’s what that tells me... two weeks ago I did a MUCH better job of cutting my losers short and letting my winners run. Because even though I had more losing trades than winning ones I was still able to turn a decent profit. Now to this week... I managed my winners pretty well, however I let some losers get away from me. 

And that made all the difference. 

Here’s a look at my trades... I had 7 losers, but 4 of them were BAD losses. That means I let them expire worthless taking a MAX loss, OR at one point they were profitable trades and because I didn’t put a stop in they turned against me and I actually LOST money. These types of losses are UNACCEPTABLE! 

RAD (W) - 20

SPLK (W) - 7

FCX (L) - (83) - had a chance to sell at 90% profit, didn’t do it

V (L) - (86) - profitable trade turned loser

PAA (W) - 115

RAD (W) - 11

OKE (W) - 52

BBBY (W) - 7

MRVL (L) - (35)

GM (L) - (18) 

GT (W) - 39

INFN (W) - 65

WMT (L) - (117) - 100% MAX loss, unacceptable

TSO (L) - (50)

BABA (W) - 61

PPC (W) - 105

MGM (W) - 8

JCP (W) - 21

URBN (L) - (85) - profitable by 30% and didn’t take any OR put in a stop

FCX, V and URBN were all profitable at one point. Had I put a stop in I would have saved myself $254! The WMT play was never profitable, but I stayed in it with no stop “hoping” it would turn around. This too is also unacceptable. We’re talking about another $60 saved here had I placed a stop loss in the WMT trade. So basically I lost $310 I didn’t have to lose people!

STOPS! They truly SAVE a trader! You would think this is common sense, but it’s the hardest thing to do!

Anyway, the positive thing that comes from this exercise is seeing I’m literally a few decisions away from real profitability! 

March wrap-up

I got beat up pretty good last month, losing a total of $889.35 in March. 


There were a few bright spots... Starting with the fact that $600 of those losses came on one single trade I put on back in December - an ESV put spread. At that time I didn’t care about risk management. So actually this month’s performance isn’t completely reflective of my current strategies and trading plan. 

Another positive is I was able to keep 95% of my losses very manageable... a good thing considering I had A LOT ‘em this month. Honestly though, only one loss (other than the ESV put) really got away from me and that was a trade in RGLS. It cost me more than $250. So you see, if I could take back just TWO of my MANY MANY losers this month I would have actually been profitable! TWO trades people! This why risk management and stop losses are of UTMOST importance for a trader!

And the final positive I took away from last month were my directional option trades. If it weren’t for the gains generated by these plays then my March would have been a DISASTER!! 

For a look at every trade I put on in March, click HERE!


Final March Totals

Options - ($791.55)

Directional Option Trades - $673 :: 25 winners, 18 losers, 1 B/E

Stocks - ($770.80) :: 11 winners, 15 losers

Dividends - $0

TOTAL = ($889.35)

2015 YTD (As of 3/31) Profit/Loss - $220.15 (2.2% YTD Return)

Options Trading Update

It's been a tough month trading stocks. I've had just 8 winners against 14 losers... and let me tell you, those winners weren't all that impressive. I've also run into some hard times selling options this month. I had an old ESV put spread expire in the money for a max loss. Plus I got smacked pretty good trying to sell naked puts in MO, KO and even FB. Yes, I showed up a week too soon in FB.

BUT... I have had some amazing success trading options directionally. In fact I've made more option trades this month than I have in nearly 3 years! Get this folks, I'm 12-1! That's right, 12 winners against 1 loser!!

Why you ask?

WallStJe$us. PERIOD!

Guys and gals, if you like making money then he is a MUST FOLLOW. Recently WSJ hooked up with Sang Lucci and together they trade in Lucci's private chat room along with many other folks. Monday I joined the room on a 14-day trial basis. When it's up, I'll gladly pay $120 monthly fee.

So check out my trades. Green highlighted boxes represent profitable trades, blue boxes VERY profitable trades (100% or more) white boxes = open trades, etc... you get the picture.

Bottom line is this... I'm a small-timer practicing and learning this craft. There WILL be a time when I trade bigger size. I also want to learn to spot these trades myself! You know the saying... teach a man to fish over giving him a fish! 

I think I've found the right place to learn!

XLU working :: 3/16 update

Today I took a third of my XLU position off the table booking a 59% gain in one trading day. My plan is to sell the other third at $1.26 (a double) and then let the remaining ride.

I also opened up a new option position in FRO, buying the May $2.50 calls. WallStJe$us detected some unusual option activity in that particular call, so I followed. 

As for my stock positions... I bought ELLI at $53.03, with a stop just under $52. I'm holding for a break-out above $54. I also bought some FEYE today... $41 seems to be a short-term bottom. My profit target is the $44-$45 range.


I regret to inform you that this trader lost money today because he was STUPID! 

Last week I sold to open a FB $49.50 weekly put collecting a $69 credit. The position has been underwater all week long. Well... this morning FB popped up over $79 and for about 10 minutes the trade was actually green. Albeit not by much, but profitable nonetheless. Of course I thought FB was about to run. So my thinking was why only make $10 closing the trade early when it's possible FB could close OVER $79.50 and allow me to collect the full $69 premium.

FREAKING GREED... and over $69?!?!?!?! WTF!

So I passed on the chance to close out the trade... and guess what??? Yep, FB reversed and went down pretty much ALL DAY LONG!

Instead of making $5, $10 even $20... I lost $70! Now, I get that these totals are very very small, but it's about the execution. I failed terribly!

Moving on... I was stopped out of CSIQ for a small loss. Then I opened a new long in TXMD. I like this one for a move to $6.20. 

I put on two new directional option trades. I bought 3 XLU April $44 calls, following a WallStJe$us alert to wiseguy activity in the name. I also bought 2 SUNE April $25 calls.

Lovin' some AXP today

My only regret is that I didn't buy more!

Two days ago, thanks to an alert from WallStJe$us, I bought a March 27 (w) AXP $80 call. I played it very small, only buying one contract for $114. (Look I get that that's ridiculous, but I'm still gun-shy after nearly BLOWING up my account trying to trade options directionally.)

Anyway... last night AXP announced a dividend increase and a HUGE stock buyback. Today the stock took off as a result. Now, the disadvantage of only playing one contract is that you can't scale out of your position. I sold it today for a 110% gain! But... since I believe this is the beginning of a larger move up... I bought 2 April $85 calls for .74 a piece. Again, it's a small play, but with two contracts I can scale out. I'll probably sell one at a double and let the other run.

Wednesday :: 3/11 update

Today I took off 2 of my PM April $75 puts I bought yesterday. I'm letting the last one run. Then I closed out my March TWTR $49.50 put for a small gain. I opened a new directional option trade in STLD, buying five April $19 calls.

As for my stock plays... I bought in to CYCC and CSIQ this morning. I was also stopped out of my DDD, but I bought it back moments later. I believe a bounce is imminent, but it didn't happen today, so this afternoon I bought a March $28 put to hedge my position. 

Tuesday 3/10 update

Today's gap down stopped me out of my FEYE trade right after the opening bell. I took a small loss. About an hour later I went bottom-fishing and picked up 100 shares of DDD. I've had a lot of luck in this name playing bounces. However, not sure how this trade will work out as it closed at the LOD. My stop is just .15 away.

I put on a couple directional option trades, buying some April $75 PM puts and a March 27 (w) AXP $80 call.

Lastly, I set up some longer dated credit put spreads in SO and KRFT.

New week :: 3/9 update

TWTR - Right off the bat this morning I bought to close the $47 3/13 weekly naked put for a small profit. I opened this trade about 15 minutes before the close on Friday. Normally I would've kept it open, BUT since I got put 100 shares at $49.50 over the weekend I'm just not comfortable with that much exposure in one name. So with that line of thinking I also bought a March $49.50 put to hedge my position.

T and KO - I opened two new credit put spreads this morning... one in KO and the other in T. 

FEYE - I went long today at $42.99. My stop is just under the LOD, $42.10.


So I woke up this morning to news I got 900 shares of ESV put to me!


Back in November I set up a March 37/36 credit put spread in this name, playing 10 contracts. Since that time ESV and the rest of the offshore drillers have continued their precipitous drop. This thing has been a cancerous position for MONTHS! 

Interestingly enough, I've been talking with a guy in the comments section on my past two blogs about ITM options getting exercised and "put" to you. This ESV spread has been in the money for MONTHS... and I mean DEEP in the money. So it's ironic that today I get those shares put to me. However, this can happen with deep ITM options this close to expiration. My ESV play expires in 2 weeks. 

Either way, the putting of those shares at $37 forced me to exercise my $36 puts. All told, on 9 contracts, including my original $420 credit and commissions, I lost $489.55.

A devastating blow.

These are the kind of losses I'm working so hard to avoid. The problem is I set this trade up last year, before risk management meant anything to me.

Of course these days it's my top focus, and because of that my other losses this week were not near as destructive. And yes, I took A LOT of losses with very very few wins. 

Have a look at my trades for today... red highlighted box = positions stopped out of for a loss, blue box = positions stopped out for gains.

Alright lets move on to the rest of my option plays, specifically my naked puts. I closed out my TWTR $46.50 weekly put for a profit this morning. Obviously I could have let it expire worthless, but I didn't want to chance it with the market rolling over AND my other naked put position already in the money, the $49.50 strike.

And speaking of that position... I decided to let those shares get put to me. Why in the heck would I do that you ask? Well looking at the chart I believe we are close to support. It's very possible we move back toward the $49 to $50 range next week or the week after. If we get that kind of move I can sell my shares, or I can sell a call against my position, collecting even more credit while potentially exiting the trade by getting my shares called. Remember, I originally booked a $101 credit on the sale of that $49.50 put, so my cost basis is $48.49 and I'm OK with that for the time being.

The bottom line is this... I was going to lose $200 today closing out that $49.50 put. I think I can lose less or even make a small profit by taking the shares, being patient and getting out at the right time. That's the main reason I let it expire in the money.

And since I believe TWTR is heading back up, I sold to open a 3/13 weekly $47 put, collecting a $104 credit. However, I'm keeping this trade on a short leash. If we break the recent low after the earnings gap, $45.57, I'll close the trade.

I also sold to open a March MO $53.50 put and a March 3/13 weekly FB $79.50 put. As you can see I decided to sell to open a PM weekly put too, but I changed my mind and closed it for a $41 loss.

3/5 trade update :: the losses continue

It's been a rough start to the month. I've taken 5 losses, one push and only picked up one quality win. 

Yesterday I bought ABBV... last night ABBV decided to buy some company and today I got stopped out for a larger than expected loss. The stock gapped down causing me to sell at 57.39... well under my stop of 58.95.

I also opened 5 new trades today... ADT, AKRX, ADP, CRM and CUDA. As you can see, my AKRX trade never got off the ground. I was stopped out an hour later.

I did book my best win of the month by closing out my RDN trade. I really wanted to ride it closer to the 16.75-17 range, but honestly... I needed a win so I took it. I'm sure RDN will be up above $17 tomorrow!

Now to my option plays... I've got 2 TWTR naked puts that expire tomorrow, a $46.50 and a $49.50. I believe the $46.50 will be fine, but I'll more than likely have to roll-out, or take a loss in the $49.50 strike. I was just too aggressive when I set this play up last week. 

The art of stop placement

Before I get into my trades today... I want to talk about the art of stop placement. I know it's strange to talk about "art" in a world where NUMBERS rule, BUT it seems to me stop placement is just that... an art.

Some traders just have a natural feel for this... they're Picasso. Then people like me, well... we get stopped out all the time only to watch the stock reverse and take off without us. 

Sometimes I feel like a kindergarten finger painter in a world full of Monet's.

Take SNDK for example, last Friday I went long at $79.57. Per my trading plan, I set my stop at the low of the day which was $78.45. Now, here's where the "art" comes into play. Most of the time if a stock continues sideways I leave my stop in place. I want to give the trade a chance to work. However, once the stock begins to move up... I then follow my stop up to the next LOD. But there's a "feel" that comes with this decision. When do you leave the stop in place and when do you move it up? The answer to this question is what separates GREAT traders from average ones.

Alright so back to SNDK... I bought Friday, rode it up Monday and then after the bell moved my stop up to Mondays' low - $79.80. But that wasn't an easy decision. I thought on it for a minute... wondering if SNDK was really ready to run, or if it needed to consolidate some more. Monday's candle looked pretty weak, so I decided I'd move up my stop to the LOD and protect my position.

Yesterday I got stopped out.

Of course today the thing BLASTS off! Here's the frustrating part - had I left my stop loss at the LOD Friday - I'd still be in the trade today. In fact I would have sold for a nice gain, instead of breaking even! 

So moving on...

Today I opened new positions in AMAT, MPEL and ABBV. I was stopped out of my BBRY short and my IRM long for small gains.

I'm holding and moving up stops in RDN (15.97) and AER (43.50). I've got stops in AMAT at 23.90, ABBV at 58.95 and MPEL at 23.70.

Lets hope these stops don't betray me!  

A look inside my process

So as we transition from one month to the next, I thought it’d be a good time to give you guys a rundown of how I do things.

First and foremost the days of risking a large percentage of my capital per trade are OVER! There for a while I was getting lucky, but that all ended in the 4th quarter of 2014

These days I keep it small... never risking anymore than $100 per trade (1% of my current account value). In fact, the risk I have on the table today for each position ranges from $25 to $56. So as you can see I’m keeping my risk VERY low.

Now when I sell credit spreads I’ll ratchet that risk up a bit, but still no more than about $150 per play. 

Alright, so how do I even decide what trades to get in?

I’ve got two main sources... WallStJe$us and Mr. Breakout’s website

This website is a GREAT tool! A few times a week I’ll check out several of his links, like cups with handles, all-time highs, 50 day bouncers, and high tight flags! He’s constantly updating these scans... and it’s all FREE! You REALLY need to check out Mr. Breakout’s website if you haven’t.   

Here are some real-life winners found on his website - AGEN, CLDX, RDWR, and KING. I’ve had the most success using the “cups with handles” scans.

Now to WallStJe$us... this guy is THE MAN! He tweets out BIG option bets on stocks. He calls 'em “sweeps”. If you get multiple sweeps you get #STEAM and that’s #WG (Wise Guy) activity! For an explanation of these terms check out his website

The bottom line is this, he’s looking for a specific type of option activity... the kind that tells you the “smart money” is making a big bet. I don’t know about you guys, but I want to follow the smart money. I’ve had A LOT of success trading his tweets. I know many of the traders who follow him play options off his alerts. I just play common though... it’s what I’m comfortable doing for now.

When I see an alert come through on WSJ’s feed - I usually jump on it right away. Now, that may sound crazy or irresponsible, but I already know how much capital I’m going to put in play and how much I’ll risk. So when I see his alert all I have to do is simply adjust the numbers.

Take for example WBA... WallStJe$us alerted us to some big March 6 call buys on February 23rd. I went to the chart, took a look at the daily candle - it’s important it hasn’t taken off yet, I try not to chase. Anyway, if I like the chart I check for the low of the day. WBA was trading around 78.40 with a LOD at 77.28. So I knew I was looking for a stop around 77.25. And since I’m only putting about $2,000 in play I knew I’d buy around 25 shares, which is what I did. I bought 25 shares at 78.40 with a stop at 77.25, meaning my total risk was $28.75 plus $8 for round-trip commissions. So I’m risking roughly $37 to see if this thing takes off... and it did. Five days later I sold at $82.92 and $83.29.

I do the same thing with Mr. Breakout’s information. The day I buy I set my stop at that day’s low. Sometimes I place the stop at a recent low that was made a few days before, but it's usually very close to the current LOD. 

Stop placement is KEY people! If the stock continues sideways, or drifts a bit, I’ll keep the stop in place. However, once it gets moving I’ll then take my stop up to each day’s low. So as long as the stock makes HIGHER lows each day I’m in the trade! 

I’ll stay in until I reach my price target, or get stopped out. This is the tough part though... knowing where to take profit and when to let it ride for a bigger move. It’s managing THIS part of the trade that separates the best from the rest! 

So far in 2 months I’ve put on 41 trades... 22 winners, 16 losers and 3 pushes. That’s a 58% win rate. I’ve made $572.56 in that time. I’ve also been back-testing my risk/reward ratio and how it works with my win rate. I tell you, it’s been very interesting to see the results. Maybe I’ll break that down for you in a future post.

For now, if y’all have any questions or suggestions - hit me up sometime at

A fantastic february

I’m very happy to report February was my best month in more than HALF A YEAR! I made $737.52... that represents more than a 7% return on my $10,371 account!

Here’s the breakdown of my gains for the month

Stocks - $371.52

Option Spreads/selling covered calls or naked puts - $696

Directional Option Trades - ($330)

Alright, so lets take a closer look at my stock trades. I’ve made risk management my top priority this year. Basically what I’m doing is buying somewhere around $2,000 worth of stock and then risking no more than about $85 per trade. In fact, most trades I’m only risking $35 to $50 bucks. Playing it small time keeps my emotions at bay which allows me to find an ease... a rhythm in my strategy.

So what’s my strategy you ask? Great question! And in the next few days I’ll post more details about that, but for now lets just focus on the results.

In February I had 14 winners, 10 losers and 3 washes - that’s a 52% win rate! Now lets take my TWTR trade off the table because I bought it back in November before I implemented the $2,000 per trade, $85 max risk criteria. This also means I’m going to deduct the $195 profit from that trade.

So when I take TWTR out I’m left with a 13-10-3 record, which represents a 50% win rate! My adjusted stock trading gains for the month are $176.52. This means even with a 50/50 winning percentage I’m still profitable! This is a good sign! It means I’m keeping my losses small while letting my winners run. 

Here’s a look at all my stock trades for the month.


Now moving on to my option spreads and covered call/naked put plays. I had a very good month selling options! I booked $696 of profits. 


Finally to my directional option trades. These are options bought with the intention of playing a move and then selling the option for a gain. As you can see I had a tough month, but I was successful in cutting my losses! I I didn’t let any run too far against me - something I have struggled with in the past.