Trading Diary for 2016. Day One: 1/4/16

Today is officially the start of the new trading year and what a start it was. Last night, China’s stock market had to be taken down as a preventative measure to contain a crashing market. The plug was pulled as the Shanghai index dropped 7%. This was the first time the security measure were applied since the government approved them after a harsh summer which saw the index down over — -?

I was pretty worried once I heard the news last night as I had some overnight calls in play in AAPL, BABA, XLE and WYNN.

Sure enough this morning I woke up and my calls were down over $600. This was only for a total of 5 calls! Needless to say I was more than stressed.

However, after a few good trades and some really good luck, I’m $247 in the green. (Not including commissions of $100)

The blind luck came in the form of accidentally purchasing more calls of NFLX than I wanted. Not remembering that I had changed my setting to default to an order of 4 calls, I placed two orders for NFLX calls thinking I was only making 1 call each. In actuality, each of those orders were for 4 calls each, a total of 8 calls. These NFLX calls were not cheap either, about $350 each X 8 calls = 2800 for one play! The most I’ve ever risked on a trade.

I was shitting bricks as the calls at one point dropped to $300! I held on though as the indicators still showed a move up was highly likely and I kept on selling off 1 call at a time as the price went up. I ended up netting $465 on that trade. It was blind luck that I ordered more calls than I wanted, but it was my skill coming into play that I placed them at the right entry for the day.

My other profitable trades were in WYNN. I held onto my overnight calls and were able to let go of them at a small loss of $40. I placed two more calls and made $200 profit on them. And I holding an overnight call that is currently $55 in profit. I made the decision to hold onto these calls because I am expecting a strong move up tomorrow. It is close to resistance and if it breaks it, then it is going to soar. So we shall see.

My bad losses were the overnight calls i had in XLE and BABA from the Friday before. Those two alone cost me $413. If I didn’t hold onto these calls I would be up another $413! Actually, at one point I was up 60$ on XLE, but instead of selling I held on to them, all the way until they dropped to -127$.

Right now I have overnight positions in GPRO, WYNN and LULU. GPRO and LULU are one of the few green stocks in a red day. Plus, they have cleared a previous resistance and I’m banking on a continuation tomorrow. WYNN is sitting on the edge of a breakout so I am holding, plus I have a $50 profit cushion sitting on the call.

Lessons learned for the day:

  1. Don’t hold overnight positions unless you have a very good reason and your expiration dates are at least a month out. Preferably 2 or 3. A big majority of my losses are from holding overnight positions! I was holding onto these calls for no other reason than “hoping” they would rebound and I would make money on some major overnight gap. HAHA. The only good reason I can discern right now is if the stock broke out of a major resistance and you are holding for a continuation.
  2. Don’t have too many trades going on at once. 1–2 profitable trades is way better than 3–4 losing trades. I was looking at two many things and wasn’t able to focus on all the trades I had going on. Didn’t even consider to sell XLE as it was making a profit.
  3. Wait patiently for the opportunity to present itself. Don’t get into trades too soon. Trust the system. I did a lot better today, stopping myself from not making trades that weren’t ready.
  4. Sell your losing positions sooner! I made some calls on HD, V, CVS and XLE that went in my favor, but turned around quickly. I sold these for losses of about $200. My first mistake was entering these trades too soon. My second mistake was not getting out once they turned around. My third mistake was making too many trades at the same time that I couldn’t keep track of them.

Good Points for The Day:

  1. Legging out of winners as the price increases and collecting profits as they come.
  2. Good entries on NFLX and WYNN.
  3. Buying stocks that are trending higher and clear resistance as the overall market is down.
  4. Being more patient on my entries. Making sure all my indicators line up before entering.
  5. Realizing that I can make trades both ways, calls and puts. Good job with NFLX and AAPL. I was able to do 2 fade plays for about $100 profit. Not bad.

Overall, a green day today for me so I am happy! However, it could have been a lot better! Like $400 better. First start of the NEW YEAR and I’m green as the SPY dropped 2.85 points or 1.4%!

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