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Robert Weinstein's Trading Journal 2018

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Robert Weinstein's Trading Journal 2018

A new start. I've been trading on and off, with mostly off. It's important to note  this post is dated in the past, much before it was actually written to keep the post in context of what's going on in my trading. More on that in a moment, in the meantime, here's the update.

After several spurts and sputters with volatility, it does now appear that enough volatility has returned to the market to warrant tracking my trades because it appears that I will (or at least I am) trading on an (almost) daily basis.

The usual suspects of trading indicators are triggering. Both the William signal and Brenton Signal. I haven't used the time since I traded full time to develop more signals, and I wonder if I should have. On one hand, the market wasn't "normal" with quantitative easing and I feared my models wouldn't work once QE ended. On the other hand, life and family requirements meant I needed to focus on income and between the two, I haven't progressed much beyond the William and Brenton. That said, conceptually, I've been manually (discretionary) trading/scalping certain setups that is adding to the bottom line.

I want to program the setups so I don't have to manually scan for them, albeit that's not likely going to happen for a few months as I have little or no time to add more things to my plate. Between my time in school, family, insurance, and real estate, even the act of trading when a signal rings is tough, much less trying to find the tons of hours required to fully flesh out a positive expectancy signal. My compromise has been to fund a Tradestation account and use options to position and gain exposure. It's not enough to qualify as a pattern day trader, so using options in a cash account is the only vehicle I can use. It's not as bad as it sounds, and it allows me to have a small amount at risk in total value.

One motivating factor in using options only is I started using options on occasion when I was really underwater in a position and wanted to lower the number of shares without letting go of my exposure. For example, I would be short 6000+ shares of XYZ and under water maybe $5 or more, my average. I could sell calls and or buy puts and then cover some of my shares with the theory my overall risk exposure on the downside was lower while still having the ability to remain exposed for my (hopeful) payoff. For example, I would buy three or four at (or near) the money puts for every 100 shares I was short and covering. It was kinda sloppy because I tried to enter and exit at the same time and found the ebb and flow of any given stock and options to not be in sync (not a big surprise really with afterthought). As a result, I didn't do it a lot, albeit I did it enough to realize that often, options can be day traded and with many many exceptions, almost as efficiently as the underlying.

So what started off as a means to keep my heart from pumping out of my chest has turned into a means to leverage in some cases and in others (both), the ability to short a stock that doesn't have borrows available and have a lower risk profile than a straight short position regardless if I'm selling calls or buying puts.

As I started with, I'm now finding myself making trades most days as well as getting signals on others that I can't trade (either because the stock doesn't have options available or the options don't have any liquidity). I'm expecting if this continues as it has been for the last few months for more than a few more months I will re-fund my account to the point of being able to actually trade to the point where it makes financial sense to dedicate that amount of time and money to it. 

Currently, I'm an insurance agent. It's something I very much enjoy and it was a good means to support my family after my signals stopped working. Regardless of how trading goes, I won't leave insurance, and it's a matter and question of the amount of time I dedicate to any given activity. Insurance is my retirement plan now and that is to protect me from another long period of time where my signals don't trigger. In 2010 through 2015 I could go weeks without a signal triggering and it has left a mark in my head that I don't want to be vulnerable to again. 

Anyway, the following is my trading, albeit a few weeks or so actually happened before I wrote this. Hopefully if you're reading this, you get something out of it, and for me, it's a good way to keep my wits about me and to also improve upon my current indicators and with any luck, create new ones. I'm especially interested in signals that will work on the long side as all my attempts so far have resulted in failure. That leaves me with only the ability to make money shorting any given security. Having another tool in the bag might make all the difference in the world.