Options Update - 02/21/2006

My Feb options positions all expired with profit.

XEO 100 FEB position expired with a $90 profit per contract.
SPX 100 FEB position expired with at $100 profit per contract.
RUT 100 FEB position expired. I closed out a portion of that position, so my total profit for it was $185 per contract. Not a bad month I should say.

For the March expiration cycle I pretty much entered the same positions, but with a closer trading range. It seems like the indicies are having a tough time breaking to the upside. Also, I have entered into a couple of butterflies on the XSP. A put butterfly at 126/127/128 for a debit of $10 per contract and a call butterfly at 129/130/131 for a debit of $10 per contract. It's a low probability trade, but if either hit maximum profit that means a 900% gain on my investment. I just thought I'd start to incorporate a new strategy.

As far as my forex trading goes...I'm still developing my strategies. With forex I think I need to focus on shorter time frame and adjusting my entry rules. It's working out pretty well so far. I will have a new trade up later this week.

Hello hello...sorry I haven't been updating my forex blog. I have been trading, but I've been working on other things and other traders, and I haven't had a free second to write down an entry or two....

I have a comment asking me to describe my method. Really, there's nothing much to it. I basically trade off support and resistance. It seems in forex, the markets react well to moving averages, fibonacci lines, pivot points. I also take into account news and economic reports coming out. I know that's not really much of an explination, but after watching the markets for so many years I guess I have gained experienced on how these reactions take place.

A tip to use with these tools, especially fibonacci retracements, is that the trend is your friend. Not saying that it is impossible to trade profitably against the trend, but your probability of a successful trade is much higher.

Right now the markets are pretty choppy to do short term trades. In the longer view, it seems that the US dollar is making a run, so working on 4 hour and daily charts may be the way to go now. Check out the AUDUSD, NZDUSD, USDCAD, and USDJPY. They're all trending, but it's a slight trend. I think the dollar's strength is going to continue with the next few interest rate hikes, but with the removal of "a measure paced" in the last FOMC statement, who knows.

Well, hopefully i'll be able to post up a trade idea tonight.

I'm sorry I have not been posting in the last few days. The market has been really choppy, largely due to the FOMC meeting this past Tuesday. With that meeting behind us I think it would be okay to get back into the swing of things. I should have a new trade idea tonight. Also, check out my good friend and mentor Pipcrawler. He posts his daily picks at http://www.babypips.com/forex-analysis/pick-of-the-day.html I'm learning a lot from him and his methods. Stay tuned for a trade idea tonight!

-Tradervlad