Trading the Gooniverse...

Discussion in 'Journals' started by TheGoonior, Oct 23, 2009.

  1. I've decided to start this journal in the hopes that it makes me a bit more disciplined about following my trades.

    STRATEGY = Find oversold/overbought stocks with the intention of getting in to a larger trend early.

    VEHICLE = Long Near/ATM PUTS/CALLS with 90+ days to expiration.

    1) 10 < Stock Price < 75
    2) Avg Daily Vol >= 2,000,000
    3) Option Bid/Ask spread <= $0.10

    RISK = 0.5% per trade.
    STOPLOSS = 2*ATR(14) although a reversal may take me out earlier.
    INITIAL POSITION SIZE (C): Determined by option change price change if the stoploss is hit (using ThinkorSwim theoretical price).
    TRADE MANAGEMENT: Add contracts as price moves in our favor, starting at 1.0ATR and every 0.5ATR afterwards.
    MAX TOTAL POSITION SIZE: No more than 5% of account
  2. LONG:
    NOK (> 13.37, ATR=0.48)

    MRO (<34, ATR=0.95)
    WMB (At Open, ATR=0.58) Triggered 10/20/09 and it's still valid.
    KFT (<26.98, ATR=0.39)

    OPEN: None

    • Using Jan10 ATM/NTM calls/puts.
    • All Stops are 2*ATR(14)
  3. UPDATE:
    WMB Filled, Jan10, 20PUT@1.55
    NOK, KFT, MRO pending
  4. UPDATE:
    BOT +1 NOK 100 JAN 10 12.5 CALL @1.35
  5. Update:
    BOT +1 KFT 100 JAN 10 27.5 PUT @1.54
  6. SETUPS: 10/26/2009
    OCO order used so that first order to hit is activated.

    System changes: Risk=0.25% per trade
    Limit of 3 setups per direction.
    Only 1 fill allowed in each direction.
  7. Just noticed that TCB spreads are wider than I allow (Bid/Ask > $0.10), so we'll scratch that setup. No longs on the books for Monday.
  8. Curious why you chose 2*ATR
  9. I've noticed that I tend to have problems sticking in my trades, so I decided to try a volatility-based stop. Since I read Tharp's book and also some stuff on the Turtle system, and without any compelling data to choose some odd multiple, 2*ATR seemed like a good starting point.

    I use 2*ATR as my disaster stop and as trailing stop (chandelier-style), although normally it will not get hit, as I recieve an exit/reversal signal before then.
    WMB moving my way.
    BOT +1 WMB 100 JAN 10 20 PUT @2.05 ISE, WMB MARK 18.95
    #10     Oct 26, 2009