The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘Trading Plan’

Trading Plan

Posted by mounddweller on April 2, 2009

Finally!  It is finished.  Some of you may recall a few weeks ago I mentioned in a posting that I was going to develop and document a trading plan.  This was in response to my realization that while I had an idea in my mind of what constitued a ‘good trade’, I didn’t have any specific rules documented that I followed religiously and thus generally was ‘flying by the seat of my pants’.

While I have been generally pleased with my results over the past few months (since beginning to use Ron Groenke’s Vision V software) I feel better results can be achieved if I have a written plan and use it.

The trading plan now resides on it’s own page.  You can read it by clicking on the “Trading Plan” tab at the top of my blog.  I encourage you to read it and let me know what you think.  You can leave comments at the bottom of the page.  Let me know…is it too specific, too detailed, too general, whatever!

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FRX Update – part II

Posted by mounddweller on February 26, 2009

Oh the frustration that comes from trading in a volatile market!  As I mentioned yesterday, my objective today was to sell the Mar 22.5 puts to lower my net cost basis.  The good news is I achieved my objective.  I sold Mar 22.5 puts at $0.85.  This lowered my net cost basis to $22.77.  The bad news is FRX continued to sell-off after I sold my puts and closed significantly lower at $21.36.  Now, I’m under water on the 22.5 puts as well.   

What is so frustrating is that I thought I had came close to finding the bottom.  FRX had ran up a couple of time to over $23.00 before lunch.   Then, more bad news came out and sent the stock into it’s afternoon downward spiral.

What the events of the last few days have taught me is that all of us should have a written trading plan.  A key component of this plan is a risk management plan.  Going forward, I’ll be putting mine together and will post it as a page on my blog.  If any of my readers have such a plan and wouldn’t mind sharing it, please feel free to pass it along.

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