Monthly trade summary nov 2009

The cost of learning

The trading month of November closed today for me. My schedules follows options expiration day every month and the December trading month will begin next week.

I hesitated a lot before liquidating all my holdings and closing the books. The reasons mainly circles around a few bets that I’ve taken which veered more towards a long term bet. Subconsciously, I have slipped a few bets based on fundamentals into my day trading account. The cost of closing these bets is also significant in itself. I have started to doubt the benefits of my strategy. I will have to think of a way to take profit off while avoiding the complete liquidation of my assets at the end of each trading month. For now, this will continue since I am simply trying to find out if I can make profits for 3 months straight. But it really hurts my Asian pride to be paying so much in fees.

Performance analysis

Starting balance: $3000.00
Closing balance: $5519.33
Increase from opening balance: $2519.33  (83.97%)
Cost of capital: $636.17  (21.20%)

Strategy

I tried out numerous different strategies this month, including a straddle using put options in both FAS and FAZ and a saving grace straddle with a call LEAP on MBI and a November put. MBI is a stock that has fallen past its historic low. So I gathered that the downside isn’t too big. Both turned out to be terrible short term plays. For weekly day trading, it is still best to stick to TA based on S&P as well as the dollar correlation.

The best play this month is still ATM straddles on earnings in sleeper where volatility weren’t expected.

Reflections

As my health deteriorates and my focus on work intensifies, the trading part deteriorated significantly as I stopped gathering information and drawing TA graphs to understand the market, I started relying on my instinct. Instinct means FA and long term so I erred when day trading.

If anything, next month will be a slow month. I am expecting the sector cycling to get back to the Financials followed by tech, then carbon again. The big things to watch for will be the black Friday sales and any sudden credit deterioration in the financial sector. December is the time of year where mutual fund all decide whether or not they are buying or selling certain stocks so that their books will look good to their investors. So potentially, the big names will benefit as the mutual funds add those names to the list.