Sunday, August 7, 2011

8/7 Weekly Summary

This is certainly not a pretty picture, notice how we had several days with over 2 standard deviation to the down-side, also have been a lot of intra-day volatility with the indexes trading a wide range up and down several times in a day.

Even though I have been trading longer term posisions, with a weekly overview and no adjustment other than stop loss. This time around I have personally taken all my positions to the sidelines on 7/26, about a week before the default deadline and congressional vote.. Many times we get hit by a storm that comes out of nowhere, we adjust, take the hit, etc.. This time around we had clear dates and the storm was brewing on everyone's radar, so I navigated my small little boat to the pier, tied it down and am waitting for the storm to pass.

Let's see what this new week brings us. Cheers!


Anonymous said...

Hi Gustavo
I hope you have been free of the recent market turmoil with your cash secured puts and covered calls.
My trade in June was rough. I stayed on top of it, must have made at least 3 adjustments as the market slowly rolled up. Finally I closed for my max loss only to have the market roll over afterward. That was frustrating because I felt like I made all the right choices, did my homework, and the dealer still came up blackjack.
Fortunately this month the exact opposite happened. I sold an iron condor after volatily skyrocketed, and with this latest pullback I was able to hold the thing all the way to expiration for a big return.
It's been exactly a year since I started experimenting with these nondirectional trades. My big question was whether I could consistently generate decent returns without too much time / stress. The final answer is I don't know, it is a lot harder than it seems.
I think I will keep trying to practice the craft but reduce my monthly risk and see where it takes me.
Wish you and your trading well.

Gustavo's Trades said...

Hey Dave, I feel your pain, have been there, done that! This sort of thing happens no matter what, it is part of being a trader, key is being able to follow your risk management plan and hit that stop loss button.

I have been out of the market during the big move down right after the government default debacle.. I felt it was a good idea to stay out during that whole mess. Turns out I avoided some losses that month.

Now have started to ease back in with a few cash secured put positions on PG and WMT, so far they're hanging in there, navigating quite a volatile environment from day to day.. I have not placed a full position on these either, just about 2/3 of what I was doing prior the summer.

I have been trading non-directional strategies for a bit over 2 years now, and have to say it certainly is harder than it seems on the surface, one must learn the craft with adjustments and money management, and that takes time.

As far as can this be done consistenly, this is much more of a personal question, don't you think? Can one endure a max loss or two and still come back next month? Can one balance his/her daily duties with a trading style and strategy that will match that? If the answer is yes to both questions, then the next set of questions is about money management and about persistence.

Either way, CONGRATULATIONS on the 1 year milestone!! That's part of the game.

Personally, we are making adjustments in our life/work balance that I feel will allow me to get back with the blog and be a bit more on the active side, perhaps with a few calendars or no-touch iron condors.. I'm getting ready to roll back in around December for the JAN/12 positions..

In the mean time, the long term part of the portfolio is doing well, I like the ability to stay in the markets and watch the positions on a weekly basis.