The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading
IWM generated a trade setup on Friday March 3. Monday, March 6, market action confirmed the trade setup, resulting in the following trade in IWM.
March 6: Bought to open 30 IWM at 137.29, net $4,129.70.
March 7: Buy signal continues, bought 30 IWM at 136.69, net $4,102.70.
March 8: Buy signal continues, bought 30 IWM at 135.78, net $4,075.40.
March 9: Buy signal continues, bought 30 IWM at 135.27, net $4,060.10.
March 10: Sell signal, sold to close 120 IWM at 135.71, net $16,283.
Net Loss $-84.90, ROI -8.16%.
While I was fully committed to this IWM trade, MDY, SPY, and TLT also had trade setups confirmed.
These trades would have worked out as follows:
MDY: March, 9 buy signal at 310.02.
March 10, sell signal at 311.55, profit per share 1.53.
SPY: March 8, buy signal at 236.56.
March 9, sell signal at 236.86, profit per share 0.3.
TLT: March 9, buy signal at 116.84.
March 10, sell signal at 117.25, profit per share 0.41.
Because I was already in the IWM trade I was not able to take the MDY,SPY or TLT trades.
It is always disappointing to take a loss, however I am still showing a trading profit for the year.
The ROI of -8.16% is a little distorted because I am trading with the smallest cash reserve that I have ever traded with. That makes the ROI much larger than normal.
The reason for the low cash reserve is that the gold and silver mining stocks have been experiencing a pretty good correction for the last couple of weeks. Lower stock prices means the stocks are on sale, time to buy, so I did, just couldn’t help myself. So low cash position, but this is only temporary and am working to rectify the situation. Having a low cash reserve makes trading a very nerve racking experience.
Because of the low cash position I also reduced the size of my trade, so this loss, though unpleasant. wasn’t serious.
This Friday the gold and silver stocks made a nice and welcome up move from there recent correction. Many of the stocks were up 4-7% and one up 9.86%. The loss on the IWM trade pails in comparison to the gold and silver profits.
The world economic situation still very uncertain and dangerous. The stock market is in a full blown bubble and ripe for a serious correction. Donald Trump is the proverbial wild card as the coming week the FED will raise rates and the US budget crisis begins in earnest.
How does that famous curse go? “May you live in interesting times” well this is it!