Dumping the RSI 5 method

I took the short option position and then watched the market move lower putting my "puts" in the money. I had a short stop loss placed but was expecting about a $0.25 move in the option. It got to $0.20 and then the market took off. My stop-limit order was not filled as the market moved through the position after it was triggered. Then we witnessed the market close at record highs for the following two days.

I have had some serious reservations about the RSI method as it takes a "counter" approach to the market and might be more useful for using equities with a large position size, tight stop-loss and small profit targets. I'm not that trader and therefore I'm looking for a new method that properly captures the trend and stays with that trend instead of trying to fight the heavy wave.

I've been playing poker this past year with a group of friends and have been doing pretty well. I've often read how traders use their skills for playing poker and I've realized that I've taken my risk management knowledge from trading to poker but I have totally failed to correctly impliment these skills in my trading. Basically during a game of poker I'm not betting large until I know I have a hand that has a significant chance of winning. I've had a pair of Aces (Texas No-limit Holdem) and the flop gave me nothing and I folded. Why not do the same with Trading. Look for the setup that gives you a great chance of collecting money and then go for it, otherwise just "fold." Developing......

Back in a trade

I took a short position on the Q's today as the market spiked up just before noon pacific time. The RSI 5 had gone up rapidly and hit around the 80's with the SMA 2 dipping under the price line. With the election leaning towards the Democrats, I thought the markets might not take off. However, the markets just usually don't like the "unknown" and with James Webb looking to have defeated George Allen in VA....the markets might be ready to take off. I guess we'll find out tomorrow.

QQQWQ (Nov $43 Put) purchased at $0.40.

Happy Trading!!!

Check out the golf swing

Here is a link to view my golf swing along with 3 of my friends. We are hitting in the following order:

1. Marc Dunn (About a 3 HCP)
2. Tyler Janke (who knows)
3. Greg Fayard
4. Bernie Gagain

http://www.digistreamonline.com/golf/D/SFICA/html/SFICA-12.html

Enjoy....

Ugh...what to do next.

So since I'm unemployed I haven't really been trading that much or that risky, which is good and bad. The good part is that I'm not putting money into the market unless it's a "sure thing" and yet the bad news is that my trading system would have given me about 100% profit on the last two trades alone. I could have used that money!!! But I think being more reserved and doing my homework is BETTER in the long run. Look for market updates coming soon.

Closed position -- slight loss

I had a few chances to close out this long position with a slight gain, but held on. The market tanked but has come back in the las few days. Closed out QQQ FM with a slight loss.

Peeking over the hedge

So even though the market's been in a downslide lately, I'm looking to go long. The RSI 5 has gone below 20 again and with such a selloff lately, we are poised for a short bounce up. When the SMA (2) crosses the price line I'll go long the QQQ FM (currently around $0.30).


UPDATE: Purchased QQQFM (June 39 Calls) for $0.30. Quote went $0.25/$0.30 and filled me at $0.30. Current quote is $0.30/$0.35.

OUT!

Wow, the premarket move up started coming back down just before the open (Q's were at $40.20 and opened around $40). I got out of the options at $1.20 (market order - GET ME OUT). I got a $0.45/contract profit which is a 60% profit on this trade. Nice!

Exit is coming soon

Whew! So I held on to the QQQFM calls while they dipped and stayed low, but yesterday the market took off like a rocket and this morning (pre-market) shows the Q's moving up again. I'll be poised to exit my call position today. QQQFM closed around $1.05 but should be higher this morning. RSI 5 is thru the roof and although it will probably continue up after I get out, I've already reached my $0.40/contract profit goal.

Long - again: QQQFM (39 calls)

Went long the QQQFM (39 calls) for $0.75 per contract. Currently the Q's have popped up as well. I'm looking for about $0.40 profit here and will be holding my stop quite close.

Update - Loss on the long side

Had a golf vacation and didn't update that I stopped out on the QQQ EO (41 calls) quite quickly after I got in. The Q's have dropped to the mid $38 range as of now. The entire market has really come down and I'm in the belief that we will go up quickly on a bounce. Short term move up that is. Looking for an entry point depending on what the RSI 5 tells me.

Currently the RSI 5 is at 18.01 and the SMA is about to cross the price line, telling me to go long...once again. Stay tuned...

Back in on the long side.

As the RSI 5 is so low, I have been watching the SMA (2) for a crossover with price to enter long again. This happened when RSI his 6.81. I'm back in, with the QQQ EO (41 calls) at $0.35. Up we go?

Stopped out just after the open

Q's are sliding and I wish I was still in the puts. I stopped out the calls this morning at $0.15.

Closed May 42 puts.

Q's have dipped and the RSI 5 is well under 25 (22.50) and hit a low of 9.36 today. I'm closing the QQQQP option at $0.55 ($0.10 gain) and rolling into the QQQ EP (May 42 calls) for $0.25 per contract. Looking for a move up after the market takes in the Fed announcement.

Closed and reversed

I closed out the Q calls and reversed to the short side. The calls I closed for a $0.05 profit and the puts (QQQQP - May 42) were bought for $0.50. RSI 5 spiked this morning showing a short signal.

May Q calls - QQQ EP

Bought the May Q calls, QQQ EP (at $0.40) as the RSI 5 dipped below 13. Q's were around $41.44 at the close yesterday and are currently at $41.65. We are due for a big swoop up!

Back from a few weeks off.

I got out of the last trade - even. And have been on the sidelines for a few weeks now. The Q's are really moving up the last few days. I can see a short term move down which the RSI 5 is already predicting.

Q's sliding down

The q's are still moving down and I'm holding my long put (QQQPO - $41) position. RSI (5) is around 28 and I'm about $0.20 on the profit side for this trade. So far so good.

Trader Tyler

Bought Q puts again today as the RSI 5 was pegged and just itching to go short. QQQ PO at $0.45.
Trader Tyler

Trader Tyler

Stopped out on my QQQ PO at a 15% loss. The RSI 5 is still way too high in the short term and I will be going short again soon.
Trader Tyler

Another trade, going Short.

RSI 5 has reached 78.09 and the SMA (2) just crossed the price line on a 60 min, 5 day chart. I am going short the Q's. Actually I'm buying the April 41 puts (QQQ PO) for $0.75. Should be looking to have the Q's head south soon. A tight stop will be in place.

Closing out the trade - 70% profit

I closed the trade out at $1.00 per contract. So a $0.30 profit per contract and a 70% profit overall.
Trader Tyler

Still long....

QQQCO have moved up to $1.00 x $1.05 and the RSI 5 is nearing the exit point for this trade. RSI is currently at 77.61 but I'm just waiting for a crossover of SMA (2) with the price. I'm not letting this trade slide away however.

Going long- QQQQ

Bought QQQ CO (March 41 Calls) for $0.70. RSI 5 is calling to go long the Q's. RSI -5 below 20.
Trader Tyler

Trading short the Q's

RSI 5 signaled a short on Thursday in the early part of the morning and although the market seemed to be going higher, it never did. since then the market has come back as RSI 5 predicted (short term of course). One more good move down and then it's time to close the profit.

Market moving up

The market moved up nicely today after a down day yesterday. I did not get in a trade as the RSI-5 did not signal a buy signal. It got really close at 28, but I wanted to see at least 26 to get in. Near the end of the day I did get a sell signal, but I also watch the ADX trend and currently it's showing a strong buy. I will stay out for now.
Trader Tyler

Closed for a profit

Q's continued moving up this morning and I closed out my option trade at $1.35. A nice 66% profit move.
Trader Tyler

Still in the Trade

Yesterday I went long QQQQ calls (Feb $40-QQQBN) and kept the position on overnight. My trading system is getting VERY close to indicating that I close the position. The RSI 5 topped above 70, and now I'm just looking for a crossing of the simple moving averages. The moving averages cross is a method used to squeeze a bit more out of the trade. But I'll be looking to end this ride at a moments notice.
Trader Tyler

Market's on the rise

It appears the market is in an oversold range and today we are getting a nice little upmove (except for ENG on my list which has slowly dropped from around $13 to now just under $11). The RSI -5 method triggered a long call buy signal yesterday. I bought the Feb. $40 calls for $0.90. My original stop was $0.80 but I've moved it up to $0.95 now. (QQQBN trading now at $1.05/$1.10).
Trader Tyler

ENG -

I've been trading ENG for several months now. Mostly on a buy and hold method. I got it around the low $2.00 range and rode it up to around $10 and then back down. I sold some around the $8 range and I've been getting in again at $6 and $7. It's now at $9.31 this morning and has been on a steady climb. This stock trades on lower volume and on the NYSE which makes me pause about putting in a protective stop. As for now....still holding.
Trader Tyler

Trading methods

I took several weeks off from constant trading for several reasons.

1. The market was killing me and I think it's best when getting chopped up to stand back and reassess what's going on.

2. The market during the holidays seems to be a bit to unpredictable to me. Maybe that's just me, but with a lot of people on vacation I decided to do the same.

3. I need to reconfigure my trading methods and basically calibrate my methods for risk control. I was too heavily leaverage on option contracts and the risk/reward was just too high.
Trader Tyler

2006 and up we go?

It's a new year and the market headed straight up. I think we will see some a positive economy this year, unless the Democrats muck it up with their tax and spend ways. However, being the optimist, I think that even their heavy handed politics can't subdue what we are going to see this year.
Trader Tyler