03/30 Note about contingent orders

Unless otherwise noted, I display the levels where my contingent orders should trigger on the risk profile for every trade. This way I avoid to repeat redundant information every day. I'm keeping my postings shorter to have enough time to continue backtesting and researching for trade candidates.

Keep in mind a few simple rules I follow for my contingent orders:

1) Rule #1: ALWAYS have an order in place. The market can do anything anytime, having capital preservation is essential for every trader.

TOS Contingent Orders Guidelines:
a) I use OCO orders with limits set for mark + small increments (mark - when selling), I always have an order to buy or sell on the bid or ask in case none of the previous orders were triggered.

b) I use a time trigger: Most of my orders are set to start half an hour after the market is open. This allows me to avoid the opening madness. Yes, there is 30 min. risk in case of a price gap, but the feedback I have from a lot of experienced traders is that they avoid that first 30 minutes, and so do I.

c) Use time increments on the trigger: I had a situation where all my OCO orders were filled at the exact same time. It happened that the underline was moving beyond all 3 orders, and because I didn`t have a time interval between them, they were all filled.

d) Avoid GTC orders, unless they are for closing a trade with the target profit. I had a scenario when a GTC contingent order to shut down a position was trigger at the exact time the market opened and caused my limit to be super-high because the opening prices were all over the map the minute the market opened. That`s the reason why I have a time trigger as described on (b)

03/30 MNX 45-Day Condor

Started this trade Today, after performing VIPES it looked like the best candidate Today. My plan is to trade it just like a High Prob, I've sold short strikes with delta around .8 and will place my stops if PUT delta gets to -28 or CALL delta gets to +30. Otherwise, simply collect profits.

Trade Plan, Dashboard and Profile bellow:

03/30 GLD Calendar

Still not bringing profit, the trade has 10 days and I'm starting to wonder if staying with it is a good idea. Will bring it up with Dan Tomorrow.

Dashboard and Profile bellow:

03/30 OIH 36-Day Condor

Great day for OIH, down move broght up a recovery, now above water and on its way to success.

Dashboard and Profile bellow:

03/30 XLE Double Diagonal

XLE moved down by quite a bit Today, over 1 st. deviation. Now on the down-side of the curve. Still far away from the short PUT strike, my thinking is that it will find some support to this down move on the moving averages. One way or another, it backed off from the 1.5 st. deviation on the volatility cone.

Dashboard and Profile bellow:

03/30 RUT 52-DAY Condor

RUT Got back into the cone Today, recovered from last week's movement, back in the center of the condor. Nothing much to report, there is still a lot of time on the trade, so patience is the key.

Dashboard & Profile bellow:

03/30 MNX 45-day Condor

Here is the study I did on MNX prior to getting in a 45-day condor. I performed this study to all ETFs and Stocks I follow and trade, selected MNX, IBM and USO as the best profiles and decided to settle on MNX.

1) Price action:
Here I want to see if how is it behaving for the past 90, 60 and 30 days. You can see MNX had very few days with extreme price movement. Also, notice on the 5-Day chart that price seems to be following an oscillating pattern, to me, that indicates the index isn't trending.

2) Price chart and Volatility
There are plenty of technical levels of support and resistance. The 1 st. deviation volatility Cone is well placed inside the condor and the Implied Volatility is in the middle of the range

3) Probabilities:

With 35 trading days to go, there is over 85% historical probability of success. TOS give me about 83% implied probability of success.

03/30 45-day Condor Candidates

As per my plan, I'd like to add a 45-day condor to my portfolio, right now I'm going trhough VIPES, the following candidates are showing up on my radar screen:

TLT: Looks good and there is a possible MAY condor, not quite yielding 10% ROI, not an option

USO: Another good candidate for MAY condor, only drawback is that USO has been on a long down-trend

MNX: VIPES is not as good as the others, the attractive factor here is the $2.5 strikes, meaning less commissions and slightly better ROI.

IBM: Looks good, except the Condor would have to be a bit bearish, adding risk to the trade on the up-side

Next step is selecting the best trade based on historical probabilities, ROI, the works..

Goal Setting

After reading a great post by Brett Steembarger, I've realized it is important to establish a few process goals for my trading. These goals are not dependent upon market conditions, but yet they depend on me for accomplishment.

One of the process goals I've set to myself was daily journaling. My goal is to have every single trading day documented, I've set a target of 21 days of blogging, and am glad to report I'm almost there. This week I'll complete 21 days and therefore pass the threshold of repetition necessary to create a habit. So one goal is down, there are a few more to pursue. Here is my list of trading goals:

1) Daily Journaling and Monitoring: I'm there, all my trades are properly documented and monitored, the blog is serving as a great journaling tool, it is easy, fast and allows me to share/inspire others as well.

2) zero execution errors: One too often I found myself complaining about a contingent order that mis-fired, or a trade entry that wasn't properly set. I'll start tracking this on a daily basis with the goal of having 1 full cycle without any execution errors, I can increase this goal once the full cycle is reached.

3) VIPES for every trade: Another goal, is simply to run Dan's suggested Volatility-Industry-Price-Earnings-Skew studies before entering any trade. I'll keep this documented in my journal as well.

4) zero plan deviation: This is the tough one. I have to plan the trades and trade the plan. Once too often I find myself deviating from the original plan and changing things around. So here it goes, sticking to the plan is another goal.

Here they are, properly docummented and I'm committed to them. Will track them on a daily basis.