Who's making money today?

Another AMZN trade this morning. Gotta love price action! A big thank you to NoDoji for her willingness to help!

I bought the $270 put for $2.01 and sold for $2.70. The market was moving very quickly, I was pleased with both the buy and sell price. My limit order to buy didn't even get in before price had blown past it, but it came back to the level I was looking for and I got it. And I basically went fly fishing with that sell order. The market was moving quickly again and I threw out a limit in between a wide bid and ask and got a nice fill.

 

should have been long

 

I can't fault him for a range play off the open because the daily chart has AMZN in a nice wide range.

And I can't fault him for not taking a long position during the 11:00am eastern time 5min price bar because he has a real job, which means he can use the "Oh, I missed that one because my boss was standing over my shoulder asking me something about debits and credits" excuse.

 

Haha exactly! About 5 minutes after closing out my trade my boss came in and said "send out an email on all these repo's...and hurry up on that Allowance for Loan Loss Calculation"........ anybody need a good deal on a car?

 

You are right, BUT I only had time for one trade this morning and my setup said short when I did...so I followed the plan and went short. Yesterday I went long successfully, but sold long before the big move up. It would have been a double almost, but hey a profit is profit!

 

Another AMZN trade this morning on the puts. Almost had a big issue, my chart wasn't updating properly for some reason so it was off from the actual price when I got into a position. I was going to just close it out, but I got it straightened out quickly and took a profit.

 

Couple of tickers on my watchlist. If tomorrow is a down day in the spoos, I will look to buy itm or close otm puts on. Nflx, goog. Another showing signs of profit taking is lnkd. If I don't get a good price I will not buy. Amzn has had good bids lately, I will wait till it hits supply. I added to bbry 13.50 calls @ 0.20 averaged now around 0.36. Hoping to see it itm tomorrow.

 

Been making tons of cash on XIN the past 400 days

 

For tomorrow expiry I bot aapl 440 calls @ 0.45, bot nflx 180 puts @1.30

 

Since I’m going to be taking an extended “spring break”, I’m offering a bit of tough love for FCX and anyone else who wants to trade for a living and still hasn’t taken the first step of the journey to consistently profitable trading.

FCX, your result Friday has nothing to do with “Fridays”. It has to do with putting on a trade without a setup. It wasn’t a “poor setup” because there’s no such thing as a poor setup in trading. Why would a professional trader trade anything less than a thoroughly tested positive expectancy pattern? A thoroughly tested positive expectancy pattern is called a setup. Period. You can have a variety of thoroughly tested positive expectancy patterns, some of which have higher odds of success than others, but anything that doesn't produce a profit over acceptable series' of trades after the cost of commissions and slippage, is not valid trading material. “Poor setup” is an oxymoron.

And in the bigger scheme of things, your result Friday has to do with gambling. You have a little knowledge and that’s a dangerous thing. You’re aware of a couple of isolated intraday price action patterns and you’re gambling with them in a live trading account via derivatives.

Since you’re trading a fairly small account, avoiding trades with unlimited risk (such as selling naked calls), and have a full time job, you can afford to play at the casino. But the habits you’re developing now are likely to lead to ruin in the future even if you experience a gambler’s lucky streak and multiply your account many times over. Big traders throughout history have made millions or billions, and have come to feel invincible, only to give it all back (and sometimes more) by gambling.

Right here on ET, you can compare the multi-year record of “grinding out” consistent gains (Lescor) to gambling (Neke), and decide which trading journey you prefer to embark on if you want to trade for a living.

If you want consistent success over time and through varying market conditions, if you want to trade for a living, at the very least you have to do ample research and develop a plan based on favorable probabilities. That’s the absolute minimum requirement. Then comes the real work: learning to trade your plan or automating your plan without overriding it.

”The 95% failure rate makes sense when you consider how most of us experience life, using skills learned as we grow. When it comes to trading, however, it turns out that the skills we learn to earn high marks in school, advance our careers, and create relationships with other people, the skills we are taught that should carry us through life, turn out to be inappropriate for trading. Traders, we find out, must learn to think in terms of probabilities and to surrender all of the skills we have acquired to achieve virtually every other aspect of our lives.” - Thom Hartle, in the Foreword to Trading in the Zone by Mark Douglas

From Mark Douglas’ Trading in the Zone:

“The earth and moon are both celestial bodies that exist in the same solar system, so they do have something in common. But they are as different in nature and characteristics as night and day. By the same token, anyone who puts on a trade can claim to be a trader, but when you compare the characteristics of the handful of consistent winners with the characteristics of most other traders, you’ll find they’re also as different a night and day.”

“…the risks inherent in trading do not cause the best traders to lose their discipline, focus, or sense of confidence. If you are unable to trade without the slightest bit of emotional discomfort (specifically, fear), then you have not learned how to accept the risks inherent in trading. This is a big problem, because to whatever degree you haven’t accepted the risk, is the same degree to which you will avoid the risk. Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully.”

“To operate effectively in the trading environment, we need rules and boundaries to guide our behavior. It is a simple fact of trading that the potential exists to do enormous damage to ourselves – damage that can be way out of proportion to what we may think is possible.”

“In trading, no one (except yourself) is going to force you to decide in advance what your risk is. In fact, what we have is a limitless environment, where virtually anything can happen at any moment and only the consistent winners define their risk in advance of putting on a trade. For everyone else, defining the risk in advance would force you to confront the reality that each trade has a probable outcome, meaning that it could be a loser. Consistent losers do almost anything to avoid accepting the reality that, no matter how good a trade looks, it could lose.”

That last sentence pretty much sums up the downfall of the many famous market gamblers who had everything and gave it all back.