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Tuesday, October 19, 2010

Iron Condor on SPX, trade closed

This market is crazy!
Dow Jones down 165 points for the day, but during the session it got to be down by over 200 points.

Today I decided to close the trade on SPX open on October 11, and get out with a 700 dollar profit in 8 days.

Saturday, October 16, 2010

Gurus vs market direction

The market has been soaring lately. The most unbelievable thing is that it has been doing so amidst not so good news and definitely not good volume. Volume is always a sign of conviction, confirmation. In the middle of all this it is a lot of fun when you see so many "Gurus" everyday looking for an explanation, or "finding" a reason why it went up today or a little lower down yesterday. They always seem to find a reason haha, same as when they explain things that already happened on a chart. It is so easy to be a good technical trader when you are explaining things that already happened!!!! I could be a teacher my self and be selling pdfs and making money without ever having traded at all!!

Friday, October 15, 2010

And the Strangle hit it off the park!

As analyzed on the previous post, yesterday Google moved strongly after earnings report. But let's take a look at it in slow motion:

Thursday, October 14.

3:30 pm, just 30 minutes before market close, it is presumable that Google has made most of its move for the day and everything else will be left for the earnings. At 3:30pm the stock was priced at $538.63.

Tuesday, October 12, 2010

The magic of the Straddle and the Strangle

Earnings are big movers! That is almost a universal truth. Earnings reports are like fuel to an engine. So today, we will move on to another type of neutral strategies: The Straddle and the Strangle.

As any neutral strategy we don't really care whether the stock moves up or down. But unlike the Iron Condor (where you don't want the price of a stock to move outside an interval), with the Straddle and Strangle you are speculating that the stock will have a huge movement in either direction.

Monday, October 11, 2010

Iron Condor open on SPX

I just love the Iron Condor.
This time I will be playing another one but using the SPX index. Indexes are better for Iron Condors than stocks because they are averages of groups of stocks, which means they move slower than a particular stock. You can trade an Iron Condor on Google or Apple, but the problem is that stocks are influenced by rumors, news, earnings etc which makes them move sharply and that's what we don't want when trading neutral positions.

The position open is:

Wednesday, October 6, 2010

Weak USD, is that good or bad for stocks?

The Us Dollar is weak these days and losing value. It is in oversold territory against major currencies already but how long can that last? Nobody knows. Ok now, how does this impact the stock market? Well I don't know. I know that for the Forex markets it means wait for the reversal!! It is gonna be a good opportunity when the downtrend comes to an end, but again, when is that gonna happen? You don't know? I don't either!! So, you will have to wait for the clear technical signals on the charts.

Tuesday, October 5, 2010

How to start paper trading?

There are certainly many ways to start paper trading for free. However, very few places will allow you to analyze complicated positions combining options the way ThinkOrSwim does. The ThinkOrSwim platform has been consistently rated among the very best of the brokerage industry for several years in a row, and it is a tool suited for options traders (although you can also trade Forex and stocks). One of the sweetest things about this software is that it is provided for free for you to practice all the time you want! That's incredible and it says a lot about the confidence this guys have on their product.