Monthly Archives: May 2012

Calvin and Distraction

Still Searching Mr. Discipline

Scattered comes to mind.Calvin and Distraction

I’ve spend the better part of this year working to find the products and indicators which correspond to my trading style. The books I read profess all sorts of strategies, techniques, psychology, and speak of discipline. One of the purposes of this blog has been to keep a journal, of sorts, adding at least one element of discipline to my routine.

Expectations revisited.

I recently reviewed my successes and failures from a financial perspective. I mention “scattered” because scattered distraction has been my personal sand trap. I dabbled early with equities and day trading, even though  options were by far my preference, I stumbled on some irresistable futures swing trades which swung the wrong way, I spent a large amount of time digging into large option trades and researching option pricing, I worked hard with vertical, calendar, butterfly, condor and spread adjustment strategies.

I’d expected that a decision to continue or to stop this adventure would be self-evident, I’d have lost money or made money and the distance along this curve would represent conviction. I was half right. In the end, I’ve made money and I am reassured, but I’m not far enough along that conviction curve. The surprising thing is that it felt as if I lost money, I saw more failures than successes. Obviously, you enter trades with conviction. My successes were fortunately larger, which is critical, but what I didn’t expect was that psychologically, loss after loss, against fewer wins left me surprisingly unsure.

I found that I enjoy trading the SPY options, the ES_F, and even the CAC40 futures. In the end, I lost money on equities and made money with my options and futures trades. I was most successful trading options, but worked harder on these. I’ll continue this year with options and futures, but leave the equities behind.

This year.

Discipline and Structure are going to be the keywords. Thinking like Calvin, considered them entered into my mission statement… I’m going to spend more time with the charts this year and I’m going to work on letting the market move into my trade. I wrote about the EUR.USD yesterday here, this might be a good way to kick things off.

Good Trading, it’s been an interesting day, already!

Another foot?

Last year I stumbled (so to speak) on several stories of feet washing ashore in Canada. My earlier postings are here. I was surprised to see this in the Guardian, another foot. This time mailed to the conservative party in Canada.

EUR.USD Trade Idea (Wolfe Waves)

The EUR.USD is very close to my heart.

Consuming in Euros while living in France, paying French taxes (and French gasoline prices) drives me to subconscious conversion between Euros and Dollars. I’ve written about the 10$ per gallon prices at the pump (here). But with the crisis unfolding and the VIX spiking this morning, I’ve been looking for good trades in the EUR.USD, Gold and Silver.  One possible interpretation, using the Wolfe Waves methodology would target $1.17 – $1.20 for a bounce and with some consolidation an entry in between $1.19 and $1.22.

Here’s the chart.

Euro US Dollar Chart 1 Yr.

Wolfe Waves is a particular methodology that I have in mind from a book titled Street Smarts by Connors and Raschke. If I have more time tonight I’ll explain the methodology.

Crematorium

Thanks to the unmanned SpaceX Dragon launched Tuesday:

Cremated human remains were placed in the second stage of the Falcon and will orbit the Earth. Celestis Inc. charges families $2,995 to launch 1 gram of remains in this type of memorial spaceflight.

It’s unclear how many grams were launched or if a favorite pet was smuggled aboard.

BBQ Chicken

FB in the de-facto mud pit

I’ve been trying to avoid the Facebook mud wrestling soap opera spectacle for a month, the commentaries on a new age for IPO’s then later the coming end of capitalism (IPO’s apparently are a key element, see: The big engine that couldn’t from the Economist), now the post-mudpit FBI, SEC, NASDAQ face saving tragi-comedy. When will it end and who cares?

Personally, I wish Facebook the best. It’s a great story and with a 28 year old at the helm, he didn’t want to go public and retains over 50% of the shares. If our biggest companies were all owned by innovative 28 year olds, we might not be in the mess we’re in now. Pure conjecture… What’s not to love? He believes in his company. On the other hand, I can think of a recent internet IPO that probably deserves more attention… Zuck’s (like I know him…) has made many a twenty-something rich, and built a better mousetrap. Early precursers are now forgotten, and when I read tweets, “I can’t wait to short”, and the blogosphere’s post-euphoric contrarian take on this company, I wonder. Why the hypocracy? Did Facebook make too many people rich? Don’t you use it every day? Should I blame Morgan Stanley for my investment decisions or the exchange? Getting in on this IPO was like owning the latest i-Phone. Why? I read a simple tweet yesterday. “Facebook is a website.” For those wanting to invest (or short), hey go for it, the market will clear things up, the regulators are going to f%ck things up and you’ll soon be able to fantasize over the next iGadget. You can tell all your neighbors at the weekend BBQ that you own shares of FB. Don’t you and the press have anything better to do?

For the 4 dedicated readers of this blog, if it’s a ‘must have’ it’s a ‘must avoid’. I love Facebook’s story, I loved Apple’s story once upon a time, and I still love Googles’. Using a roadshow, media elite, public relations and advertising to transform products (and I use that term lightly), into the realm of religious political affiliation on the other hand is disturbing. It makes me think of the class warfare terminology that is getting tossed around on our never ending campaign trail.

Facebook will never be the same. The honeymoon is over. It’s ironic that Zuck announced his mariage the day after. We’ve seen internet darlings come and go, and we’ve seen the transformational difference of going public on Google. We’re in for 24 hr Facebook punditry for the foreseable future. Who will they buy? Who will they put out of business and stifle? Is $FB proof that our exchanges are inept and an unfair private club?

My guess is that they’ll need a product in the real sense of the word, eventually, and Motorola has been consumed. Ignoring this noise is going to make for profound discussion, over a few beers.

BBQ Chicken

Wednesday and out for the weekend

Options expiration this week and it’s a long weekend here in France for the Ascencion. There was only one thing to do, get to cash. My May put spreads worked perfectly this month. I say perfectly, but I’m not sure if I managed the exits well. I had a large amount of 139 puts with a delta of nearly 1 and a fair amount of 135 and 134 puts. With only 2 1/2 days until expiration, these were obviously more volatile. It’s something I have to work on. What’s the best exit strategy in this case?

Cash is a position…