Testing and Detecting New Profitable Strategies — April 29 Trade Log

We added a new plan to our trading, swing trading (holding a position for more than a day but less than a month); we had to take advantage of the trading parameters for small accounts instead of just waiting for the days we were allowed to day trade, even though it wasn’t in our plan we had done it a few times before so we analyzed our previous mistakes and points were we could improve. Also, to test the MA Crossover strategy on following basic trends, one of the team members traded with another account in which he is able to day trade based solely on that one indicator.

From yesterday’s positions we had a swing trade plan for an Intel Option Call at $2.63 but after we bought it we noticed some contracts were sold at $2.20 which meant we bought ours at a really high price. This happened because we placed the order at MID price, the spread at the time was more than $1 (a third of the contract’s cost ). Intel appreciated today following the markets which were trading high due to Gilead Sciences’ advance on the Covid-19 vaccine. We decided as a team that it was best for us to use today’s available trade to sell the contract around midday after Intel’s stock got to a resistance much faster than anticipated by us and the contract did not appreciate as we wanted it to so it was in our best interest to close the position at $2.67 ($3 profit) instead of letting another winning trade become a loser (trading fundamentals: never let a winning trade become a losing trade).

Our teammate, who relied on the MA Crossover indicator to day trade and test if the direction on a short term was reliable, had positive results; he had to wait three hours for the reverse signal on a 1 Day 3 Minute Candle Chart and entered the trade on UGAZ (3x leveraged ETF). Since it was mid-day the trend change was probably not that strong, the previous trend was a 14% rally, it ran from pre-market hours until midday. The signal was definitely correct and in a matter of minutes it was up 4% since the entry point so he placed a STOP order at 1.5% above the cost price, he was willing to let the trade run or let it hit the STOP. At the end it hit the STOP and the test was successful, even though the profit was not immense it did prove our point, the MA Crossover is really accurate and the greater the time frame you give it the more consistent or profitable the trend will be. Today was a test to see how good it was on small time frames.

Takeaways:

• Give time to the MA Cross to settle on the direction.
• On contracts with big spreads stay closer on the Bid side and wait for the better price which can help maximize profits.