Wednesday, May 26, 2010

JUN NDX Iron Butterfly Day-by-day review

This was an extreme satisfying trade. 3 days and I got out with my target ROI! :) Most of it comes from the fact I decided to enter the JUN position regardless of the wild market conditions. I’ve made a few tweaks to the trade and made up my mind I was ready to manage whatever would come my way.
It also helped I entered later in the week due to my trip to Germany. When I saw the early morning gap on Thursday (5/20) I decided to wait for Friday (5/21), as it turns out, I entered early AM on Friday and got most of the increased volatility due to Thursday’s decline. Then it was a matter of watching the vols melt away and the profits show up.
Trade 1: From 5/21/2010 to 5/25/2010 +10.16% ROI
Day by day:

05/21 NDX Iron Butterfly
05/24 NDX Iron Butterfly
05/25 NDX Iron Butterfly


Brendan said...

I agree, the volatility lately has made for some nice payoffs.

I see that you have a link to, but you don't trade forex anymore. What is your opinion of them and their service? Thanks in advance for any info you may provide.

Gustavo's Trades said...

Hi Brendan, I loved trading Forex, it is nice and challenging at the same time. To be profitable you must master money management and the ability to stick to a plan.

I have to admit I'm biased to Wally is one of the partners and my friend. He is the guy who got me into trading in the first place. A super nice person with the best of intentions. His goal is really to pay it forward, so there you have it, my "disclaimer".

As far as the chat room goes, I always got a lot of value out of it. They teach you the trading basics (i.e. Fibonnacci, trend lines, retracements, candle patterns, you name it.). Then it is all put together in the chat room, many times I asked the group if they had any "trendline, resistance, support" between my entry and target just to confirm I had not overseen anything before pulling the trigger.

As far as trading with a group goes, it all boils down to your ability to work well in a group setting. The rooms are open mic and everyone is there to help each other and voice their ideas. So you can get a lot of value from it too, provided you are a people person.

The only think I don't quite agree is how they count their "paper profits".The way they account for it is from the entry to the top of the move. But if you trade long enough you'll now that between the entry and peak a lot happens. You may get a whipsaw, get scared and exit with a loss, you may get out with 1 or 2 pips, and the top might be 200 pips total.. So it really is up to the trader to make the exit decision. At least it was like that when I was in the room, it might have changed recently. I would use the team to help me with entries, only enter trades where I saw a decent risk:reward ratio (at least 1:1).

Bottom line, I do recommend them for teaching you to trade. They will teach you to fish, not feed you the fish, got it ;)


Gustavo's Trades said...

I dont' trade Forex anymore because of time. I simply can't afford to stay in front of the computer early AM to trade Forex, carry a full time job with 1 hour commute, trade options, and have a life.. :)

Chad said...

Hi Gustavo! Wow.. congrats on the fast 10% ROI! I better better start paper trading the Iron Butterfly. :-)

Have a great day buddy,


Gustavo's Trades said...

Thanks Chad! I am far more excited about the 1 year mark! I've been trading the iron butterfly consistently for one year now! With profits and a consistent win-ratio... So this gives me what I was looking for: consistency.

Now is a matter of keep doing it, month in, month out and improve it along the way!


Chad said...

Wow, my friend, I didn't realize it has been a year already!! FANTASTIC mate! I am drinking a cold one right now in honor of your dedication and to "consistency" =)

Have a great 3 day weekend with your son and business partner =)


Brendan said...

Thank you for your in depth review! Very kind of you to explain your experience.

I have been trading for about a year now, but am trying to achieve consistency and believe a chat room might be the next step. The profits on their youtube videos was one thing that confused me, so thanks for that explanation.