Tip From the Geek October Recap – Close to Break Even
Correction – October Was A Break-Even Month
October was quite a tough month for trading. A mass of global Geo-political and economic fears overcame long term trends to topple the US markets. At least into a correction. The Nasdaq Composite and Russell 2000 both made near perfect 10% corrections with the other markets not far behind. The move was swift and strong, wiping many traders right of the market and providing a serious headwind for others. I was in the later category. Trading was tricky, I didn’t do that great, but I was able at least to break-even. There were four Monday’s in October for a total of 20 tips. I made a quite a few extra trades during the month as well which helped to get my total wins above the break-even limit. Of the 20 tips for the Geek Account there were 9 losers, 7 winners, 1 at-the-money trade and 3 that are still open. All three of those are currently in the money and all by a large margin.
Total Number of Trades = 20
Total Cost of Trades = $6,000
Total Number of Profitable Trades = 7( +3 open/ 1 ATM)
Total Return = $5,700
Some of you may have noticed I upped my trade size to $3,00, raising my risk closer to 2% but still pretty low for binary options. Additionally, there are two other factors impacting my total returns on tips this month. First, there are three open trades. Giving myself the benefit of the doubt and the fact they are all currently in the money that adds up to $1,620 of the monthly return. The second is that the one at-the-money trade returns the initial trade amount to my account.
Recap Of October Trading
As I said, October was a tough month. The technicals and economics, in view, were adding up to another leg higher for the indices. The only thing was I failed to account for numerous reasons for the market to pause including geopolitics as well as fundamental movers of the market like the ECB, FOMC and BOJ. Then, when I did recognize the market was going to test the trend I failed to understand the full depth of the move at hand. Good thing is that I stuck to my money management rules and was able to adapt to the situation, eventually.
Week One
This is perhaps the worst week of October. I lost four trades this week, all because I thought the trend line bounce on the S&P 500 was a good one. This led me to make trades on the DAX and gold that were also in line the longer trends. Too bad gold was the only one to follow through. Trades on oil and the yen were also losers. Oil seems to be out of the hands of the actual buyers of the commodity and in the hands of pure speculators.
Week Two
This week was more or less as good as it got for me in October. I was able to win 2, lose 2 and one is still open for a possible 60% win rate. This week is when the market, the S&P 500 in particular, broke through support. My trade on the SPX, a call, is the one still open and is firmly in the money. The other two winners are gold and oil. The two losers were the USD/JPY and the VIX. The USD/JPY was consolidating after hitting 110. The VIX trade failed because I tried to fade it, a move that often works but not always.
Week Three
Another perfectly average week. Five trades, 2 winners, 2 losers and one still open. The open trade is a call on the DAX I took when it was at a long term low, it is a monthly position and deep in the money. The two winners were puts on the S&P 500 and the USO. I was late to the game but I managed to make a little money of the S&P 500 correction.
Week Four
This was my best week of the month. I managed to win only 2 trades, but one was ATM and one is still open. I doubled up on my one month DAX call from the previous week as the index was moving higher and offering a second chance to get in. The second strike is a little higher than the first but it too is in the money at this time. I also caught the S&P 500 on it’s bounce from long term lows as well. There was only one loser this week, my call on gold. I thought the metal might start attracting buyers buy boy o boy I was wrong about that.