RTT Trend Trading practice thread.

Given these are the RTT forums, I'm going to start a thread on something I am testing out.

I am testing trading RTT entries as they come along for each of my basket of stocks. I have a basket of only 27 of RTT's full list, but I am going to attempt to walk through each trade as things go along.

I am not doing this on an intraday thought process. I am reviewing a little during the day, but mostly, I am reviewing at night.

I have two loss trades under me already while doing this. I'm hoping that it won't matter in the long term. I am ballparking a 2k trade size for each position. Looking to buy about 100 days worth of expiration on each one. I am closing all trades that drop between 15-20%.

I will start with a trading account of 10k. I am not going to factor in commissions while I am doing this. Just fill prices.

I'll start with the two that I recently entered and took losses on.

BIDU - Jan 220 Call - 9/28 - 16.75
SOLD 10/1 - 13.75
LOSS - $300

NFLX - Nov 460 Call - 9/29 - 18.95
SOLD 10/1 - 16.00
LOSS - $295


I understand some would say "why did you buy these?! the market was pointed down!!!!". I am going to play every position that comes across the screen as long as it looks decent on the charts. The point would be to practice my ability to cut losers quick and let winners run. I don't care if I am right or wrong. I just want to practice bailing out quickly when the play isn't working.

I also plan to re-enter whenever the technical indicator fires, even if I have already taken a loss on an existing trend.

I just placed an order for CME Jan 80 call at 3.30... I will update this thread with progress if that fills. Or if I end up chasing it...

Account total: $9,405

My friend, had you read my notes on trading BIDU and NFLX you might would have stayed in these trades and turned a profit. You bought almost enough time

mtut Wrote:
-------------------------------------------------------
> My friend, had you read my notes on trading BIDU
> and NFLX you might would have stayed in these
> trades and turned a profit. You bought almost
> enough time

The point of this thread isn't to be right every time. The point of this thread is to attempt to create a trading discipline based on nothing but RTT trend entries. I am open to suggestions, but I'd prefer to keep the "I told you so" out of the thread.

That being said. I was filled into my CME call on Friday. Entry was at 3.30 as noted. Now it is 3.45... Nothing to do here.

NFLX triggered RTT entry on Friday, but review shows it at the top BB. That being the case, I will not be entering.

As such, there is nothing to do tomorrow but review the CME position.

CME position is now up 10% at Mark 3.65... Plenty of room to move up. I don't see any reason to do anything about it. Will hang onto it.

Had triggers on GOOG, MA, and V today. I wish I could play GOOG, but the options would put me way over my 2k trade size. So I'm going to go into MA based on the technical entry and the recent split...

I have a buy order in for tomorrow. MA Jan 75 call - 3.05...

I was thinking about mtut and NFLX, and BIDU. It could be that the answer here is to simply buy more time than 100 days. Had I bought more time, I would not have had to close those trades when the price dipped before it went higher. Of course, that is the point of this thread... To determine whether or not that would be needed to play RTT technical entries...

I will update the account total only when I close trades.

I opened and closed MA yesterday all in the same day. This makes me think that I'm in too close on the option. I shouldn't see a 16% swing inside of a single day. I didn't close CME, however, and it rebounded with the rest of the market today. I am back up in CME by 6%.

I see that AAPL triggered today, so I am placing a buy order for it. I'm going to stick with 100 days of expiration for the time being. This recent run could just be a draw down.


MA - Jan 75 Call - 10/07 - 7 x 3.05
SOLD 10/07 - 7 x 2.54
LOSS - $357

Account Balance: $9048

I haven't posted in a while because I made a change in how I'm going to do this. I found that I am going to need a lot more time til expiration if I'm going to do this. I had some profit in CME before this recent sell off came. But I found that I couldn't catch the trades on the way down.

I am going to reset everything and alter the practice so that I'm running at least 200 days of expiration.

So, to resume, I'm going to reset my practice account back to $10,000... From here out, I will buy at least 180 days of expiration. I settled on 180 days of expiration because that's right at around 6 months.

I have a purchase order in for MA - Apr '15 70 call at 5.80 and I will check on it again tomorrow.

My purchase for MA fired and ended the day down 1.7%. No real movement.

I have placed an order for AAPL since it triggered today, and earnings is done. I suspect the options will deflate pretty dramatically after earnings, so I have low balled my purchase order for tomorrow. Looking for the AAPL Apr '15 100 call for 6.50

I also had a trigger in SBUX, but SBUX has earnings in 10 days, and I don't think that's quite enough room for this kind of play. I will be keeping my eye on it though.

I was unable to fill into AAPL today. There was very little deflation in the options (surprising despite almost no movement post earnings). I decided not to chase the play.

MA update. Very nice move today for MA. I am up 18% in that position now. I will start to seriously consider selling this when MA makes it to 77. As it stands, I'm going to put in a mental stop for this position up 10%. If it gets below that, I'll close it. Otherwise, I'm going to let this one go.

CME triggered again today. Earnings is only 9 days away, but we'll give it a shot. Order is placed right below the "mark" for the CME Mar '15 80 Call @ 3.30...

I'll point out that I'm buying only 150 days of expiration in CME. That's cutting it close, but the next expiration is 250 days out. I decided to come into 150, but I won't go below 150... I'd rather go higher, but I think 150 days should be enough.

funkho,

I am enjoying reading your posts just to see how things work out for you. I might be able to provide a little color on the AAPL play. I traded AAPL for earnings last quarter using TT techniques. Earnings is their favorite time to trade due to volatility crush which is what you were looking for (price deflation following earnings). You might see a bit of deflation on the back months but almost all of the deflation will occur on the front month. You are buying so far out that you probably will not see much movement if the stock price remains the same. Last qtr I sold a 1 SD AAPL weekly Iron Condor two days before expiration. I sold the IC around 3:30 the day of their release. The goal being that AAPL stays within the expected move (i.e., relatively flat). If that occurs then my option will expire worthless and it did. I think I sold the contracts for around 0.85. The following morning around 9:40 the contracts were worth 0.10 and expired worthless the very next day. Picked up 0.85 per contract playing the statistical odds that AAPL would not move. That down side is that there will always be a few outliers that blow throw the expected move that cause you to scramble first thing the following morning to adjust your position.

I went off on a tangent once again but the point being that you more than likely would not see a big difference in price if you are buying a lot of time unless the stock rockets up or takes a big dump that pushes the price outside of the expected move. A quick example for BIIB below if anyone reads this and is interested what I am talking about. If you had sold a 1 SD strangle or IC before the close today and the price remains between 313 and 341 tomorrow then you will capture most of the additional premium that is built into the option. If you have a directional bias then selling a call or put spread will also suffice (assuming you sell the right direction and correct on your directional assumption ) In the example below the front month weekly options for BIIB are inflated by roughly 25% due to earnings release tomorrow. The IV should normalize by end of day tomorrow or be more inline with he other months. I was not paying attention to AAPL option chains this cycle as my time around 9:30AM is limited but the principal is the same.

NC, You're probably right about my expectation being wrong because I am so far out in time.. I'm not selling naked yet, so I don't have access to some of the strategies you're talking about. I do enjoy hearing the idea though...

I'm going to start updating right at around 11AM so that my moves can be actionable when I do my review.

MA is still up 17% and really not changing, so I'm going to leave it alone.

CME dropped and came back this morning, but my order didn't fire. I am sure this is because I'm doing this virtually. I'm betting a real order would have pushed the ask down to let me in. In any case, I'm going to go ahead and pay the ask since I have no choice..

I just filled into CME Mar '15 80 Call @ 3.90... Which my virtual account immediate shows as a 11% loss in the trade. Sigh... Virtual...

Doing my update a little early today.

I am going to change how I do this just a little bit. I have two choices in dealing with virtual. Either I stay away from stocks with tremendous spreads, or I can use the "mark" (split the difference) as my paper entry. For the time being, I'm going to use MARK instead of ask in terms of ENTRY, but I will use BID in terms of exit. We'll see how that goes.

So I'm going to adjust my entry of CME yesterday to the MARK, which was 3.45... I may decide that I just need to stay with options that don't have such a huge spread. We'll see.

So for an update:

MA - Apr '15 70c @5.75
Now: 6.80

Target for this option is the 77 area.

CME - Mar '15 80c @3.45
Now: 2.95

Target for this option is the 84 area.

It's looking increasingly like CME might have to come off my list as the bid/ask on this option is currently 2.95/3.80... A whole buck is kind of crazy... But I'll stick with it. The Mark is 3.38 on it... So it really hasn't moved much at this point.

RTT triggered on GOOG for entry, but those options are just too high for me. I can't pull the 3k trade size yet.

Updating late today. But still while the market is actionable.

Nothing to do. Positions are moving nicely. Nothing has to be exited yet.

Will have to exit next week, but not until the 29th.

MA - Apr '15 70c @5.75
Now: 6.60

Target for this option is the 77 area.

CME - Mar '15 80c @3.45
Now: 4.10

Target for this option is the 84 area.


I am getting a little itchy on the CME play. It's starting to get very close to my target area. I will hold to see what Monday brings.

No other triggers on RTT for me today, so that's it.

Have a nice weekend...

Both stocks have earnings this week. I think that CME still has a little upside based on the bollinger bands expanding but am on the fence with MA. Past 3 candles have meet resistance at the 50ma and could possibly retreat to the downside

Very quick update today.

My options are almost complete unchanged from last report. I am going to hold them until tomorrow when I must sell because of earnings.

No new trends have triggered for me.

Ok, earnings is upon us for the two plays, so I'm closing them out.

There are no triggers available today. So there is nothing to do but see what happens with FOMC...


MA - Apr '15 70c @5.75 - $1,725
Sold 10/28 @7.10 - $2,130
Realized: +$405

CME - Mar '15 80c @3.45 - $1,725
Sold 10/28 @4.20 - $2010
Realized: +$285

Account total: $10,690

Hello All,

New to these threads but studied GW's process for years. Briefly spoke with NCTrader yesterday. I only use 233, Daily and Weekly. Bought AMGN Mar15 135 Calls on 10/17/2014 as it touched 233 200MA and rising Weekly 20MA and sold on 10/26/14 (before earnings) . Looking back they have had great earnings runs. One of my more profitable trades over the past few months.

Terrific Widows and Orphans trade on RKT on 10/15/14 on multiple Daily and Weekly Bullish Divergences.

Glad to find others using this process.

-CLT1987

I actually made a mistake on the earnings dates for CME and MA. I needed to be out TODAY, not yesterday. I got it in my head that EARNINGS was the 29th, when the day I needed to be out was the 29th. That cost me a little in the trade as MA made it to the 77 area I was looking for. I could have squeezed a little more out of it. CME took a hit yesterday, so we'll call it a wash.

I got a trigger for IBM, so I'm going in. Loving the tight spread on IBM. Buying 169 days of expiration here.

IBM - 3 x Apr '15 165C @ 7.00

Filled on paper. It might get crushed by the FOMC, but I have noticed that FOMC only has a HUGE impact on the market when there is an associated news conference. That is only once quarterly(last month). I also noted that they do FOMC with a news conference RIGHT before expiration friday. Whereas other FOMC meetings are at the end of the month... Think that's a coincidence? I don't.

So I am not expecting giant fire works from today's FOMC. I should have time to bail if it does take a hard hit though.

Funkho,

Just out of curiosity, which chart did you see the IBM trade on (55,144)? And what index were you following for it? It's also super 6 for a catalyst for the next few days.

-CLT1987

This thread is based solely on RTT's technical entries. If you subscribe to the service, you will see the entries that I am talking about. I have limited my basket down to about 25... RTT tracks over 100 stocks.

-Funk

NC Trader,
I like how you broke AAPL. You are so much more technical than I have the ability, but I want to get some of your knowledge. I will dissect what you wrote back a week or so ago. Your illustrations and ability to maneuver around TOS is impressive.

Funkho, I appreciate what you are trying to do and analyze. I have looked at Seasonal Trends, 1,2,4 week trends and wondered if I could look for a good entry only when the trend is very, very strong. If a trend is up 12 out of the past 13 years and there are no losing years during that window, I am pretty confident that at some point, I can enter that position and earn some kind of profit. I know this is just data and technical. This is simply not enough to expect positive results as often as one needs to earn a living. Based on our knowledge of entry and exit, we should be able to have overall positive result after this study is complete.

Thanks to all for your work.

I have played with RTT in conjunction with my own charting techniques also. I always seem to get caught up in overthinking, and I end up letting trades pass me by. As such, I created this thread as an attempt to focus on managing the risk in the trade AFTER the RTT entry triggers. Because I have seen RTT trend after trend do exactly what was expected.

Likely, times will change. I am pretty sure that buying three months of expiration back in 2010 was plenty to catch a trade before it went sour. These days, it's clearly not enough. I assume that over the years, the market will return to calmer states, at which point, we'll have to revisit whatever we learn from this thread...

No new triggers for me today.

IBM is unchanged. Doing nothing today.

IBM making some noise. Up over $1 I made like Kenny Rogers and bought a contract yesterday. Up .30

I have a question as I like to follow you through this journey. I understand the part about trying to dial in the correct time needed in your option so that you give yourself an opportunity to be profitable. Do you have a standard thought process regarding ITM, deep ITM, ATM, or OTM options. If you are looking at ITM or OTM do you normally look for 1 strike, 2 strikes, etc.?

NCTrader,

I have just been running 1 strike out of the money on all positions.

IBM is unchanged today, despite the massive up move. That makes me quite nervous about it. Nothing to do though.

No new triggers for me today, so nothing to do. Have a nice weekend!

IBM still floundering. Only down 7%, so I will let it slide another day.

I have triggers on AMZN and DECK... Retail in November? Sounds good.


IBM - 3 x Apr '15 165C @ 7.00
Now: 6.50

AMZN - 1 x Apr '15 310C @21.00

DECK - 2 x Jun '15 90C @ 9.25

I can fit one more trade in my book, but I might have to pull IBM to do that.

Things are looking bleak for my positions... All of them are down, and I'm a little surprised that AMZN has gone against me as much as 15% in one day. That's more than I would have liked to see out of an option so far out. The IBM RTT trend comes to a close on Nov 6th, and since it really hasn't done anything, I think I'm going to cut it. I think our trades are supposed to go our way before some number of market hours. This hasn't done much of anything except drop. So I'm going to close IBM. I'm going to give AMZN another day, and hope it doesn't gap against me too hard. DECK is also down, but not so much that I have to cut it. AMZN is the one that makes me nervous.

IBM - 3 x Apr '15 165C @ 7.00 - $2,100
SOLD 11/04 @6.20 - $1,860
Realized: -$240

AMZN - 1 x Apr '15 310C @21.00
Now: 17.70

DECK - 2 x Jun '15 90C @ 9.25
Now: 8.50


Account total: $10,450

Late update today. I have DECK doing nothing and AMZN killing me. I have to close AMZN.


AMZN - 1 x Apr '15 310C @21.00 - $2,100
Sold 11/05 @ 16.90 - $1,690

DECK - 2 x Jun '15 90C @ 9.25
Now: 9.00

No new triggers have triggered for me today. So I'm just waiting for something else to come along.

Account total: $10,040