An Oportunity in the Futures Markets - Short Crude

Hello everyone,

In an effort to raise capital and further establish our day-trading here at CRI in earnest, I have included Futures Trading into our blog posts here. Specifically, I have established a 'combine' relationship with TopStepTrader.com (more on them below) and for the next four trading weeks will execute our posted trades through their simulated trading platform using the futures markets exclusively. While I may post options trades if they present themselves, most will be futures trades. I am really excited about this development and look forward to both meeting and exceeding TopStepTrader's expectations going forward!

On to today's trade

Today's trade was all about technical trading within a non-news event session. Crude oil, along with most markets, fell overnight on the intervention in the currencies markets by the Japanese central bank. The intervention halted the Yen's appreciation vs. the greenback but also sent most dollar denominated assets (like NYMEX Crude Oil) lower. 

On the regular open, the North American cash-market gaped lower across the board and then bounced. Our trade started at the end of the bounce. The chart above (times shown on chart are Eastern Time Zone) shows that crude put in a very tight double top pattern at 11:15 AM. You will notice that our first short was at 10:19 (TopStep's trading platform is in Chicago, so trade times listed are in CST), the market then tired to rally but failed again at 11:55(EST) and you will notice our second short was at 10:57(CST). The market moved then quite briskly down into the target zone (91.90 - 92.09) and I covered the short positions as each target was hit.

This trade was very fast - a total of a little more than an hour. I cleared $.56 from the combined position for a total net profit of $550 ($10 in commissions). Needless to say, I was quite delighted to see this happen in such a short period of time and was more than happy to call it a day...

That's all for this post,

Brian Beamish FCSI

The Canadian Rational Investor

the_rational_investor@yahoo.com

CRI's Trading Forum

All appropriate disclaimers apply, DO NOT risk capital in options &/or futures trading that you cannot afford to lose.

More on TopStepTrader:

I was given these guys name by a friend of mine who trades for herself. She and I were brokers together 10 years ago and I am very fortune that I have been able to keep contact with her over the years. After visiting the company's site and trying their demo for a couple of weeks, I am very impressed with what I have learned about them so far. If I understand the company correctly, they are searching for traders who can constantly make profitable trades in the market. Should they find someone who meets their screening criteria (type of trading, frequency, profit/loss ratios, etc.) they will find/introduce them to institutions (funds, banks and even individual investors) who will put up a trading stake (typically $50,000) and split any future profits with the trader on a very generous basis. Since we are already trading a very tough market for consistent profits (making money in long options positions is one of the hardest things to do in the market and far more difficult than regular futures or stock trading) a program like this seems like a natural fit for someone like myself. I would Ideally like to turn this little trading/investing business I have created (therationalinvestor.ca) into a multi-billion dollar empire; it seems to me, this is a means to that end. Regardless of my person ambitions, if you consider yourself a trader and would like to do it for a living, you might want to give these guys some serious consideration...

Those that are good are lucky and those that are lucky are generally good

Hey all,

sometimes when trading a little luck can go a long way. Today's exit on USO is a great example. As readers will recall, I entered a second short trade late yesterday on what looked like a well defined bear flag formation in the crude oil market. Indeed the signal was correct and the target of $29.30 was hit almost right on the open early this AM. Unfortunately, sometimes life doesn't agree with the market. Specifically, I had a horrible sleep last night and didn't get to my trading-post until 8AM (pst). The target had been hit (the option I bought for $1.13 hit a high of $1.41) and then it reversed. While I could have dumped the position at cost, the chart was a 'V' bottom off the lows, so I decided to hold off and see if we would get a test of the lows through the trading day. 

That test did come (with an hour before the close) and I liquidated the position at a small profit. Patients paid off here and I was able to turn a mistake (sleeping in) into a non-problem. Yes, I could have made a lot more money had I been awake but sometimes life hands you lemons and you just have to try and make lemonade. Today I was able to do so and so that is exactly what I did.

Here then is the exit chart with appropriate notes:

That's all for this post,

Brian Beamish FCSI

The Canadian Rational Investor

the_rational_investor@yahoo.com

CRI's Trading Forum

All appropriate disclaimers apply, DO NOT risk capital in options trading that you cannot afford to lose.

2nd short entry of the day - USO

Hey all,

I left off last post with the notion that I would entertain further short trades as they developed. The Nasdaq itself has deteriorated further and those options that I sold have gone up further. While I won't moan about money left on the table I will suggest that the market is indeed heading lower. To that end, I did come across an interesting short entry on oil.

Here is the chart with entry notes

 

The market is very oversold on a short term basis so I wouldn't be surprised if this trade takes some time to develop. Having said that, the bear chart pattern is in and I shall risk on the trade up to 30.28 (point C on the chart).

That's all for this post,

Brian Beamish FCSI

The Canadian Rational Investor

the_rational_investor@yahoo.com

CRI's Trading Forum

All appropriate disclaimers apply, DO NOT risk capital in options trading that you cannot afford to lose.

Sell on Rosh H - buy on Yom K

Hey all,

Today's trade is about being short through the Jewish holiday. For the coming week I shall be looking for ways to make money on the short side of the market as the Jewish holiday forbids orthodox Jews from playing in the market through their high holy days. Regardless of your religious bent, one must respect the fact that a good portion of the market will simply not be playing the game and as a result a good portion of the demand side of any stock equation shall be skewed to the bearish side during this period.

Having said that, we also have a bearish tone continuing to dominate the global landscape (ie European debt.) and shall do so until this whole issue comes to some serious conclusion. Historically, that is usually coupled with some dramatic price action in the market - so the 'correction' in the market shall continue still.

Today I traded the Nasdaq 100 ETF short and here is the entry chart with notes

What is most interesting here is that while I was writing the entry blog, my target ($51.75) was hit. I have exited the trade at $1.42 for a quick $.14 profit. On $1.275 that equates to just under 11% gross profit. Not bad for 20 minutes of risk exposure...

here then is the exit chart with notes

I may be back in on the short side soon, but that will be that trade...

That's all for this post,

Brian Beamish FCSI

The Canadian Rational Investor

the_rational_investor@yahoo.com

CRI's Trading Forum

All appropriate disclaimers apply, DO NOT risk capital in options trading that you cannot afford to lose.