6/8/17: Failed Trades Net $3,300.00
The chart of FCX includes the results of a trade that did not work out. Price action was expected to continue lower throughout the trading session and close below the prior day’s low.
Such a move, with 100 Put contracts open, would have resulted in a significant profit: Each one full point lower in FCX equates to $10,000.
The ultimate objective was for FCX to get to the 13.00, area for a potential gain of $30,000 or more.
The inserted spreadsheet shows a position in CLF as well. It had similar (lower price action) expectations.
Total combined target for both trades, was in the area of $60,000.
Options trades must perform or they are to be exited immediately.
While price action in FCX declined throughout the session as expected, it became obvious that it was not going to penetrate the prior day’s low.
CLF had similar action. Both trades were exited just before the close with a nominal profit.
FCX went on to decline to target level(s) but in a much slower fashion than what is needed to maintain an option position (for us anyway). CLF did not move lower and instead continued on higher before a dramatic reversal one week later.
Closed Trades: GDX Short of November 2016.
Back in early November 2016, a Wyckoff up‑thrust was identified along with a test of that up‑thrust.
A significant amount of technical data was offered to support the assessment the gold miners were about to experience a rapid and significant decline.
The technical data is still available (called out in real-time, as it happened) and can be found in the Sector Archive (scroll to November 2016, 4th - 9th updates). Not provided at the time, was exactly how this trading entity profited from the opportunity.
Our business model is to provide access (to analysis and training) and not advice: Therefore, potential trading actions were not released.
Now that sufficient time has passed, trading actions and information can be brought out and discussed. The 15-min chart of GDX (above) reveals details of the trading activity.
With the understanding that entry and exit perfection is not always possible, several positions (strike and expiration dates) were anticipated. The 11/11, put was set to expire in just three days after entry and the 11/18, 12/09, puts allowed additional time if the trade continued on lower (which it did) in the following week.
We can see that at the open, price action was moving fast … declining swiftly in the first 30-60 minutes.
Initial entries were made during the second 15-min bar as shown. Price action immediately declined and the position was in the green.
Then, after the first hour, we had choppy counter action leading up to the intra-day high and the next entry point. At this time, the original position was showing a slight loss but within money management parameters.
Recognizing that price action was counter-trending and not in a new impulsive move higher, a second position was initiated.
The criteria then became; the trade must be in the green (all positions) by the close. There’s no problem with being wrong. It’s being wrong and staying wrong that’s the problem.
Price action reversed from that point and never came back for the duration of the trade.
The rest is self-explanatory. During the next session the 11/11, put was exited. There was sufficient profit, the entire remaining position could be a total loss and the account would still show a gain.
The decline continued on into Friday, the 11th and closed near the low. Using the empirical knowledge that if price action closes near the low on a Friday, there’s likely to be follow‑through on the coming Monday, positions were maintained.
Decline on Monday is exactly what happened and all positions were closed early in the session.
After the exit, we can see that buoyancy came back into the market. The ensuing counter-trend price action would have begun to significantly erode profits had the puts been maintained.
Individual gains are listed in the table on the chart (along with some SLW puts) with the overall profit at 258% as shown.
Right about now seems a good time to post an update on results. One of the benefits of not working in a corporate environment or not working for a proprietary trading firm, is that we’re free to pursue opportunities in their purist form.
We’re not concerned with having to “meet the numbers” for the quarter or the year. The markets don’t work that way so why should a portfolio manager (or market trader) be forced into an artificial and counterproductive construct.
With that said, let’s take a look. As a reminder, the objective of this firm is to adhere to tenets that have been mapped out for over a century. Those tenets don’t need to be re-stated, but can be reviewed here.
The August 2016, time frame was somewhat arbitrary but seemed to be the point where our activity picked up significantly as the market started topping out with internals breaking down.
The inference of the chart is obvious. Even starting with a modest account of let’s say $50,000; our trading methods and techniques would have moved that account to be right about a quarter million just six months later.
Even with fiat currency, that seems to be a decent return. You’re at least making money faster than the value of the currency can be destroyed.
Caveat: Our results are not a recommendation for anyone to purse the options path. The methods employed on this site are essentially at the graduate level in the market arena. We're showing what is possible once that level of proficiency is reached.
There's still much to learn for me personally as well (mainly psychological). The process of improvement is never ending.
If you like what you see, start or continue on with the reading list. Make a commitment to yourself to know more (much more) than your broker or financial adviser. To make significant gains in the market, you'll have to be on your own; using your own insight and expertise.
1/1/17: The Haves and Have-Nots
Professional trading involves continuous positioning of trades and monitoring of opportunities.
For the year ended 2016, the Three Ten account had 188 round-trips (entries paired with exits). Two positions remain open heading into the New Year: UEC and SLW.
Our activity in the markets picked up significantly in August-forward where two‑thirds of Three Ten’s trades were executed.
The chart presents the results of that activity.
The obvious area that stands out was the gain from the GDX short. This short opportunity was fully documented on this site in real-time … to the hour.
As a reader or consulting client of this site, how this information is used (or not) is entirely your responsibility.
Or view is simple:
What’s coming out of the mainstream financial press, and money managers alike, is completely false until proven otherwise.
Starting from that perspective is a much healthier, realistic and sane approach than compliantly believing what one reads or hears.
It looks like no time’s being wasted and the obfuscation to the public is already underway for 2017. Here’s just one more example. Our well documented view on the Dollar has nothing to do with economic prospects and everything to do with massive world-wide short covering.
We won't know the truth (if it ever comes out) until near the end of the move and it’s too late to position effectively.
Isn't it interesting that our research and preparation for dollar short-covering began over a year ago while the 'improved economy' narrative just started this past November.
Our objective at this firm is to successfully navigate the cesspool of falsehoods and obfuscation. After this (bear market) is over, there won’t be any middle class … not as we know it.
Therefore, we fully intend to come out on the other side not only intact, but as part of the ‘haves’ and not the ‘have‑nots’.
Welcome to the New Year. J