$200 Account (Fri, 7-Mar-2008)

BIDU's daily chart is trading into a compression pattern, a pennant type wedge. The closer it trades into the point of the wedge, the less dynamic the breakout should be. It would be nice to see a breakout next Monday or Tuesday.

Predictions for BIDU in the near future is $350, which would be really nice to see as it's tumbled from the $400 range down by almost half. A $100 move to the upside would be nice. There could be some further drop.

Upside Targets: 277, 292, 303, 325, 350 ($108 range)
Downside Targets: 222, 218, 198, 172, 160 ($82 range)

Either directions is fine with me.

Keeping the daily picture in mind and perspective, this can also give us a range to trade in in the pennant wedge. Depending on what is happening with BIDU, sometimes it comes up to tag the 200 EMA and then begin its descent again. In this case, it did it. Lately, though, it's been overshooting the 200 EMA, almost like a headfake, to me.

I'd already gotten in and out 3 times earlier in the day and already had one position on. It looked like the stock COULD go lower, so I decided to take on another position and leave the 4th position I had on. This is like adding to the position with confirmation of the move in my favor. My account had used up $6600 of the $8K, so I only had $1.4K left of buying power. I wanted to buy 2 contracts, and there was not enough to buy 2 of the Mar240P, so I got the Mar230P.

Options for BIDU are very fairly priced right now.

As the stock hit the 200 EMA and began going back down, I saw that as a perfect entry after the 10 and 20 EMA crossed. For me, that was confirmation to the downside and volumes were fine.

Here is my day's closing on 5 daytrades on BIDU. It gave me about a 19% ROI of the $8K that I started with, which was a profit of $1.5K.

The $200 Account is now at $9575.25 (4688% ROI) in 5 weeks.

One of the things about trading this account is that I am not stressed, rather relaxed, which gives me ideal situations with which to trade in. By no means am I perfect and I am learning as I trade what works and what doesn't.

71% Profitable Trades, 29% Costing Trades

For the most part here, I've let my profits run and cut costs very quickly. This is the way we are supposed to trade. Mind you, 71% profitable trades is VERY good.

Can you imagine making over 4000% every 5 weeks on your money? That's not 4% or 40%, that's 4000%. It's just unbelievable, but I have recorded my entries and exits for every trade. I did not share the reasonings for all but one of the trades, but I did provide my chart settings and with that, you should be able to see what I did if you have some reasonable understanding about trading.

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5 Responses
  1. Matt Says:

    awesome!! Getting that roi from an initial 200 bucks is just totally awesome.... Thanks for sharing your strategy and information, i'm still in the learning phase of trading options, you make it look so easy. Thanks again, take care.

  2. Doris Says:

    Hi Matt,

    Well, easy is a relative term. It's not exactly easy, rather I have spent a lot of time on BIDU's options and understand what is fair pricing, etc.

    Just remember that if someone makes something look easy, most likely, if they know what they are doing, they have spent a lot of time doing it.

    I did not go through all my reasonings for why I chose each option, etc. And, remember, 30% of the trades were costs. It's just that I was disciplined to get out, keeping my costs down. If you are not disciplined to do this, this can wipe out your account.

    I'm still learning and wasn't quite sure if I could do real well with $200 starting. For this situation I was. BIDU made some big moves, which is what I needed.

    However, the situation could be totally different if it didn't. I'm thinking about doing maybe 2-3 other $200 accounts using some other stocks to see if I can replicate similar performance or to see what the variances are.

  3. Debbie Davis Says:

    This was so interesting Doris. Good for you! It would make for a great magazine article, but if everyone knows your secrets, the market makers will make sure it doesn't work anymore. (Am I paranoid?) Unbelievably cool!

  4. Doris Says:

    Hi Debbie,

    The fact, even if everyone knew my secrets, which it isn't a secret, inherently, people wouldn't do it anyway, at least most.

    Take, for example, we know the secret to longevity for a good quality life is to eat healthy, exercise moderately every day, get enough sleep, keep stress low, drink enough water daily. How many articles have been written about that through the ages?

    Plus, all the gimmicks out there. Lose 40 pounds in 2 weeks and people still fall for that.

    As we can see, there were a few trades that made quite a bit of money relatively, but the majority of trades were small amounts that added up over time.

    It was the discipline of doing what you know to do and doing it consistently. I wasn't consistent every single time, but most of the time I was. PLUS, this is a big one, I was relaxed and not focusing on the money, so it just came. I focused on trading well.

  5. Doris Says:

    Last thing . . . It's a thing of buying and selling pressures is what the market makers are doing. There are certain things to look for, but is it 100% of the time correct? No, so you need to constantly keep the big picture in mind because things do change.

    That's what I meant about being flexible, but not at the same time. It's not like if you do A, B, C, you get D. Maybe it is for many of the times, but sometimes it changes and you need to know when.

    That comes from actually studying it, trading it, learning from it. Compared to some of the traders out there, I've barely touched the tip of the iceberg in knowledge and application.

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