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!