Practice trade on new stock

Some of you have asked to get into my brain...so okay here's how I think if I have never traded a stock before. I TEST IT virtually. I never jump on anything without testing it unless it is a PEAK trade which almost 100% of the time is pharma.

So....S/O and I traded it virtual.

This stock was in the news and really I thought it would go down. So I am glad I didn't follow what I thought!

The stock is VZ.

Virtually bought 45 call contracts @ $49.00 strike @.67 and sold @.96. Had a .01 spread. Profit $1304.89. This stock has good volume and does seem to move well just not big $$'s...to clarify I mean doesn't move $1.00 and up but the option does move.

Ability to purchase a multiple amount makes the trade worth the investment. It does move fast so maybe need to place a .10 -.20 GTC.

On my Qcharts I have a quote sheet that I got through the "BAR" (don't ask what it is I don't know) but it gives the same information that Yahoo finance does that GW has us "PRINT OUT!"

As we were in the trade I looked over this quote sheet to see how VZ trades. Most of the time it falls in a 20 cent+ range up and down. That is enough to make $ since VZ has a penny spread.So my question will be; "Does VZ always have a penny spread?".

This is a stock and option I will watch and practice not less than 20 times before I ever enter in with real money.

Even if I sold now @ 12:13 PM (6/6) I would be up $1215.00. That is in 45 minutes. Even if I invested 1/4 of $3000.00 I still could knock down close to $300 a day if the option moves like it did with close to 30 cents as the stock rose.

Another thing I liked is it has great consistent volume.
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NEW INFORMATION ON MY STUDY
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As of June 10...

VZ does not always have a penny spread. It moves really fast UP and DOWN. Friday it moved UP and DOWN quickly so unless I plan to DAY TRADE (which I do not) VZ may not be for me.

Today the market is holding ground @ 10:24. Testing VZ $49 call and $50 put...although at this time charts are confusing on VZ.

After these 3 trades I am drawng the conclusion VZ is not a good trading stock....which is why most of time I do not like trading DOW stocks. I will continue to monitor for the next few days.

June 10 @ 12:08

VZ I tested 25 call virtual contracts and tested 25 put contracts. As you can see on the 10 E chart the huge red candle at the open...a total of 4 red candles showing a pull back. This was a fast put trade and could cause a broken neck if I had not got out of the test trade. Profit was less than $30. However waiting on the pull back I purchased the call @ .38 and just looked at it. If I sold (.76) now my profit would be 96% or $950.00. If I had bought call on the open I still would not be making money. The call at the open was .78.

So far there was not a signal even on a 1 minute E chart. This could be a case of knowing your stock.

Now when I study I always ask myself this question: "Would you have done this trade with real money?" Even though my virtual earned a huge profit my answer would be NO...I saw no signal.


It is possible that this is one of those trades where the pro's do a straddle???? Still researching.... as stock has been increasing...

June 10 @ 2:30...

Just checked VZ and if had I bought real money 25 call contracts after the pullback I could sell my call for $2450.00 which would yeild me a prfit of about $1462.00.

VZ on daily for the last 2 trading sessions have been a HRFP but is butting up against the 20 and 50 moving averages.

Now I am wondering if the signal maybe longer charts??? What will June 11 bring??? Is it pull back time?

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June 11 @ 9:58

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VZ way down on open. Glad I waited for any pull back. I think VZ needs good study and knowledge of stock. Once learned could be a good trading stock. But still little signals not visable yet. Will keep watching.

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June 12 @9:29

Unexpected interuption yesterday. Had to go somewhere and gone all day. I did write VZ as a put but that was as far as I got never even got to a price after receiving emergency phone call. Last night looked at charts. There was a HRFP on the 34.



Edited 6 time(s). Last edit at 06/12/2013 08:32AM by Darcy2.

My approach is somewhat similar. I tend to practice a strategy opposed to the stock. Since I am a fairly new trader, I want to make sure my trading strategy is one that works. Once I have a strategy that I am very comfortable with, I use my expert stocks as my "guinea pigs". I will practice, using 10 stocks no less than 5 times. I need 100% accuracy. If I do not get it, and do not know why, I go back to testing and tweeking my strategy. I am usually very confident that it will work, because I have been testing my strategy against random stocks, and also my basket.

I have been spending an endless number of hours testing. One thing is for sure, if enough indicators line up in the direction of your trade and in the direction of the market, a very high percentage of time, you will have a profitable trade. As I have stated in the past, I ALWAYS trade in the direction of the market. Also, I always use Money Flow, Directional Movement, 8 MA, and the "E". When only those 5 indicators line up, you will profit 8 or more times out of ten. When you start adding the FP, HRFP, MACD, oversold/overbought indicators, etc, you eventually reach nearly 100% on intraday trades. It is very important to learn the art of entry and exit I am still making intraday trades only on my expert stocks (very short and fairly small). I am keeping a steady flow of income by doing what I know best- small charts and intraday. I hope everyone is trading well- keep studying and working!

To follow along with my train of testing and thinking I am posting on my first post. This will showhow I think when looking at a new stock.

VZ has huge volume and with the contracts at low prices many options can be bought. The volume makes this stock MOVE. I will continue with my train of thought without trying to add to the added list.

Hope ya"ll don't mind. If you do let me know and I'll stop. This is how I see whether or not I want to add a stock in my trading basket. So far VZ doesn't look that bad. Earlier I was't too sure but time will tell.

Great posts Darcy and Rookie.
Darcy, thanks and keep posting the VZ information as it is very interesting and insightful.

Okay been testing VZ and tus far looks like a 3 chart gives the E signal, VZ makes between $250.00 - $450.00 one time daily tradeusing $3000. So far been able to test it up and down with both trades working once a day. It does trade fast so if you don't like fast use longer charts for a trade out in a month...example in June buy July.

Good thing about VZ is spread is .01 - .04 spread and are not expensive. Reminds me of the Q's.

Virtual trades thus far have hit 100%. Will continue research however.

Yesterday I practiced VZ entering the trade @ 12:39. I did a ITM and OOM trade (in the money/out of money) June 50.5 and 51.5 PUT. The put was obvious even though he DOW was in the green.

ITM 36 contracts = $957.46 (.34 per)

OOM 89 contracts = $934.12 (.89 per)

So far zero losses on VZ. VZ has support on 34 and is getting squeezed on 55 and daily by moving averages. It is possible that the DOJI on 144 is a warning.

6/18/13 Briefing...

VZ Verizon considering Wind Mobile acquisition, according to reports out overnight (50.71 )



Edited 1 time(s). Last edit at 06/18/2013 08:30AM by Darcy2.

VZ movs fast get your money and be happy...at least that seems to to be the case thus far. It moves well intraday up and down. I'll keep testing.

Today....virtual......still researching and studying before using real money...

VERIZON COMMUNICATIONS
06/18/2013 O STC VZ Jun13 50.5 Call 30 $0.94 $45.00 $2,773.94
06/18/2013 O BTO VZ Jun13 50.5 Call 30 $0.82 $45.00 ($2,506.01) 267.93
Total Realized Gain/Loss for VZ $267.93
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After selling...

Additional information: Option currently @ 2:05PM is $1.21. Bid up +.27 more than when I virtually sold or an additional $810.00 total $1,077.00 for the day. This time there was a clear signal for VZ to go up on E charts.

The interesting thing is the 5 moving average VZ crossed the 10 which is a sign to sell.Now need to test if VZ should cross the 20 moving average before selling.

Now I am beginning to rub my hands together thinking I may have found a great stock to trade with little spread. A small spread means there isn't much to make up before I get in the green with so many contracts. I will continue to watch and study.

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2:19 PM Tuesday...55 chart starting to show diversion....hum....
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6/19 thru 6/20

Practiced trade VZ yesterday... bought 45 June 51.5 Puts for .61 if held until today would have made about $8,595.00 less cmmission. Practiced July 50 Put 30 contracts bought @ .89. If held till this morning could have sold for 2.08 for about $3,570.00 less commission. I am really likng VZ more everyday.



Edited 3 time(s). Last edit at 06/20/2013 11:30AM by Darcy2.