I may have two Credit Put spreads on, say one that is 20% below the price of an Index and another one 10% below the price of the Index. It is true that I have some risk on but returns don't come at the expense of doing nothing. You have to take risks and in the end all I'm betting on is probabilities. Yes, eventually I will get burned. Eventually. But the cost of not taking advantage of the oversold opportunities over and over again throughout the years is much greater.
In addition to the March SPX 1965/1970 Credit Put spread, I also saw the SPX 1845/1850/2170/2175 unbalanced Iron Condor expire for max profit. With these results the portfolio return for March was a solid +3.07% after commissions and now the account is up +7.36% year to date. The S&P500 is up +2.39% during the same period.
The SPX index went from 2055.35 to 2108.10 this week and now the markets are back in No Man's land.
(Click on image to enlarge)
McClellan: +71 (neutral)
Stocks above their 20 Day Moving Average: 64% (neutral)
Looks on its way to overbought territory but not quite there yet. This neutrality is not ideal for selling individual credit spreads on one side of the market. For that reason I opened an Iron Condor instead as the first play of the May cycle less than 48 hours ago. My next play will be a Credit Spread whenever the market reaches a short term price extreme. If that doesn't happen (it has only happened once this year) then I suspect I will go through another boring long period of doing nothing but baby-sitting Iron Condor positions.
SPX 1855/1860/2200/2205 unbalanced Iron Condor
4 weeks to expiration and 88% probability of success. Looking great. I am not concerned with this position.
RUT 1100/1110/1330/1340 unbalanced Iron Condor
Very young position initiated 2 days ago. 8 weeks to expiration and lots of baby sitting ahead. Patience is the name of the game.
Action plan for the week
None of the Iron Condors will need adjustments for the time being. As for new trades, the market needs to reach an extreme. Either SPX 2030 or 2150 to get me interested. Looks like I won't enter new trades in the next few days.
The LT Trend Sniper closed its second position of 2015 after the Euro had its best day in more than a year on Wednesday.
Seeing a huge part of the profits evaporate is not fun, but as a trend follower, staying in the position for as long as possible, giving it time to work is the only formula for maximizing winners. It could be said that in order to have large winners you have to be willing to give away part of your profits. Sounds crazy. The best way to maximize, in the long term, is by not imposing arbitrary Target Profits that will potentially cut some winners short.
So, a significant part of the profits slipped away in the end with that huge reversal day but it was still a good trade held for 19 days that netted 327.5 pips of profit: short from 1.11972 to 1.08697 and brought in a portfolio growth of +5.85%
(Click on image to enlarge)
Some additional statistics provided by MyFxbook about this particular trade:
The Sniper is up +17.52% for the year and it should have 3 - 4 more positions left in 2015. Of course I expect some losses at some point as typical for any trend following methodology, but for sure they will be smaller than the winners. In other words, with these results the LT Trend Sniper system pretty much guaranteed a positive return already for 2015 even if it loses all the positions left in the year.
Folks, I removed the Investing Accounts from the Track Record page in spite of the fact that they were doing pretty well (up more than 20% since inception 17 months ago). The reason for this decision is that I won't be able to add fresh capital in a long time. Longer than I expected. They'll be like ghost accounts with no activity. I initially thought I would be unable to add fresh capital for just 4 - 6 months until my situation in the US was stable. But, just this week I decided to aggressively save for the down-payment for a house in Florida. The goal is to save 50K - 60K as soon and aggressively as I possibly can and that will prevent me from adding fresh capital to long term stock investments in at least 18 more months.
I won't remove the Investing related articles from the site. I won't stop talking about the subject either. But any small amount of capital that I may have left in the near future will go to my Options and Forex trading accounts where the strategies are much less capital intensive. Of course, I will not sell my dividend paying, long term investments. I planned to hold them forever and that was not a joke. But because there won't be long term investing activity for a long time, it kind of stops making sense to track a performance and actively compete with the markets when I'm really doing nothing at all. For the time being the results page will go back to Options + Forex only and I'll try to make it cleaner and easier to understand with less clutter.
Monday: US Existing Home Sales. China Manufacturing PMI
Tuesday: US Core CPI and New Home Sales. Germany Manufacturing CPI
Wednesday: US Core Durable Goods Orders
Friday: US GDP
On a final note, this may be the last article this month. I'll be moving to the US next weekend. The next article will most likely come out on Saturday April 4 from Floridian soil. That's unless I have to make an adjustment earlier to any of the existing positions or unless the markets go completely haywire and tempt me to add a new credit spread position.
Good luck folks! Trade smarter, not harder!
Check out 2015 Track record