Going back to documenting trades

A year or so ago I was documenting all my trades in a journal. Noting what the charts looked like, why I got in, reasons to get out.

Then I was doing so well with my trades that I felt I didn’t need to take that time and I got out of the habit of using a trade journal.

Well now I need to go back to thinking about my trades. Just trying a bunch of strategies without thinking them through or following up on rules is not getting me anywhere.

My current strategy is longer term (6-12 months for options) and sitting on my hands during minor fluctuations. But I haven’t really thought through what would be a minor fluctuation and what would be cause to get out.

So I’m going to go through the trades I have open and document why I got in and what should cause me to get out.

I started with my best trade, a penny stock, but will go through them all penny stocks and options.

Here is the journal page for a penny stock, BEE, that has been doing really well for me.

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Goldman Sachs (GS) in larger up trend

I’ve been watching GS lately.
Over the last few months, GS has been in an uptrend.
It looks like GS should be going back up into the channel (shown on Prophet chart below).
But perhaps not until next week as it is hitting up against the Person Weekly Pivot (shown on TOS chart below).

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Person's PPS & Pivots

I've been using Person's Pivots for a while with some success.
I just added Person's Proprietary Study (on ThinkorSwim) which is a combination of moving averages and buy/sell signals. After listening to John Person speak about the two sutdies, I feel that the combination of hsi pivots and PPS is well grounded. I am starting to use this combination to remove some of the emotion from my trading decisions.

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QQQQ -nearing strong resistance

The QQQQ is nearing both a retest of the Fib line and the previous 5-yr low (at ~32).
Although there has been a lot of positive news items fueling this recent rally. I don't believe there is enough strength to push up through both of those resistance lines.

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Didn't see that rally coming...

I bought April QID calls just before this most recent rally. I bought them in the morning and by mid afternoon they had a nice profit. Rather than get out, I held overnight. Then this rally happened.

I didn't get out because I knew it couldn't go up more than one day, okay not more than two days. By day three of my denial, my nice profit turned into a substantial loss. Now those calls are so far out of the money and under water that all I can do is hope.

To counter that, mid-morning today I bought some April QLD calls. Most of the day, they stayed flat. Then in the last 45 minutes it rallied to a nice profit. I was not able to get to the computer to get out so have to hold overnight.

I will put upper and lower sell orders in tomorrow morning to attempt to lock those profits it. I don't want a repeat of last weeks hold-and-hope.

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PALM

In the last 4 weeks Palm has been going up from $2 to $7.91 with most of that in the last week and a half. With this last surge, volume increased exponentially.
The mark is at $7.91 today’s close. The 1-yr high (Aug ’08) is about $8.50, almost where today’s high was.
This looks like a good opportunity to buy some Puts.
I put in an order for Feb09 7.5 Put for $1.05
There is a minor support at 5.25 (down 2.66) and it could also close the recent gap going to 4.45 (down 3.46).
Puts that are 2.50 ITM are $2.75 and those 5.00 ITM are $5.10

Exits:
Sell if Put @ $2.75 or $0.45

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QID

I sold a call spread today on the QID.
Feb09 50/47 Put @ $0.71
It has not closed below 51 in last 3 months. Yesterday was a higher high. Today was an up day on the QQQQ so the QID was down. This is a 3 day weekend for the market with MLK day so 3 day's time decay.

I expect the QQQQ to be up for the next week with the Inauguration then come back down.

Exit:
Buy back @ $0.31

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