First January 2017 Trade

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.

A trade set up in IWM on Friday January 6 was confirmed on Monday January 9.

January 9: Bought to open 40 IWM at 134.78, net $5,392.20.
January 10: Sell signal; sold to close 40 IWM at 136.14, net $5,443.60.
Net Profit: $51.40, ROI 0.95%

 

2016 Year End Review

2016 started out slow with losses in January and February giving me a $399.35 loss for the first two months. These losses were finally fully recovered in September, giving me $25.16 profit for the year up to that point. Two good trades in November and December brought my total profit for the full year to $646.13 and an ROI of 10.8%.

Admittedly it was painful to be in the red most of the year. Though discouraged, I never lost faith in this trading strategy. After the losses of January and February I only had two losing trades the rest of the year. My over all win loss ration since starting this blog was above average with 76.4% winning trades and 23.6% loosing trades.

It also really helped that my gold and silver investments almost doubled the size of my brokerage account. Even with the recent sell off in gold and silver I am still up substantially for the year.

Before using any trading system it is important to back test or paper trade the system until you feel comfortable with it. Also keep detailed records of all trades made so that you can see how the system performs. Follow the trading system consistently, take every trade as they come, you never know which trade will be the big winning trade that makes this system work. Keep your position size small enough so that the inevitable losing trade will not substantially affect your ability to continue trading. It is the occasional big winning trade that makes this system work, you do not want to miss it, take every trade.

This trading system should only be one part of a balanced investment / trading strategy. Diversification works. My gold and silver profits really made it easy to continue trading. In fact my trading losses were insignificant compared to my silver and gold profits.

Usually I have most of my capital invested in dividend paying value stocks, just keeping enough of a cash balance to cover potential trading losses. This gives me three potential streams of income; stream one, capital gains from the stocks I own; stream two, dividend income from the stocks I own; stream three, income from my trading system.

What 2017 will bring is anybody’s guess. We still live in uncertain times, there are black swans every where. The odds are for a serious recession, stock market correction and inflation, read here. I continue to keep my trade positions small and trade conservatively. I am short the S&P 500 and am short bonds, my gold and silver investments are hedged against inflation.

Hope for the best, prepare for the worst. I have a feeling 2017 will be a wild ride, hang on!

 

First December Trade

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.

December 1: Buy signal today; bought to open 40 IWM at 131.20, net $5,250.00.
December 2: At the open, bought 20 IWM at 130.61, net $2,614.20.
December 2: At the close, bought 60 IWM at 130.84, net $7,852.40.
December 5: Sell signal today; sold to close 120 IWM at 131.16, net $15,977.20.
Net Profit $260.60, ROI 4.7%.

This was a some what unusual trade. A trade setup for IWM first occurred November 29. The setup was confirmed November 30; however I did not take it as I was anticipating a trade in SPY, my go to ETF, that trade never developed. So I entered the IWM trade on December 1, one day late.

On my opening trade on December 1, I got a very poor fill price, almost 30 cents from the close, which was my target price.

The next morning, December2, in before market trading,the IWM ask price was well below yesterday’s close. Since I missed the first day of this trade, I figured I could add to my trade at the open and at a much better price and lower my average cost.

The trade at the close of December 2 was a normal end of day trade.

After struggling most of the year just to break even from January’s losses, it feels good to get two above average winning trades in a row. This brings my total return for the year to approximately $646 and an ROI of 10.8%.

In todays economy, there are not too many places where you can get 10.8% yield on your brokerage account cash balance; nice. That is the way The 74% Solution trading system works; although, this year it took a while. What kept me from losing faith in the system was past performance and the win loss ratio never went below 74%.

We live in extremely dangerous economic times. I am still trading very conservatively. I have cut my trade size by 50%. I am heavily invested in defensive assets such as gold and silver, commodities based ETFs like energy and mining, I am short the S&P500 and short US Treasuries and am increasing my cash balance. My trading system is not based on fundamentals, it is strictly a price action technical system. Having said that it makes sense to be aware of the bigger economic and financial picture, which, at this time, is not pretty.

There are many financial and investing experts, smarter than me, predicting we are on the verge of a major market correction if not economic collapse. I link to these experts and their articles on a daily basis, on my home page. This is one reason why I am trading at a much smaller position than normal and why my long term investments are fairly defensive. When this inevitable crash comes I intend to stop my trading until the dust settles. Because I am not sure how it will affect the trading performance of The 74% Solution. I, of course, will continue paper trading through the crisis, and trade again when the dust settles.

 

First November Trade

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.

As I noted on my Blog of October 31, IWM, MDY, QQQ and SPY all made a trade set up and confirmation at the same time. My first trade of choice, when there are multiple trade set ups is SPY. After closing SPY trade on October 31, QQQ was still indicating  a continuation of it’s trade set up. Therefore I entered a QQQ trade after closing SPY on October 31.

This is that trade.

October 31: Buy to open 50 QQQ at 117.11.
November 1: Bought 50 QQQ at 116.06.
November 2: Bought 100 QQQ at 115.06.
November 3: Bought 50 QQQ at 114.04.
November 4: Bought 50 QQQ at 113.69.
November 7: Sold to close 300 QQQ at 116.50.
Net Profit $ 386.00, ROI 7%.

Finally, this is the trade I have been looking for all year, finally, it’s about time! My net profit for the year is $386.53.

As noted in my trading manual, The 74% Solution, it is the occasional big winning trade that makes this system work.

While I was in this QQQ trade; trade set ups were also confirmed in IEV, IWM, SPY and XLK. These trades were not taken, of course, because I was fully committed to the QQQ trade.

Here is how those other trades would have potentially worked out if they had been taken.

IEV: 0.86 profit per share.
IWM: 0.74 profit per share.
SPY: 8.97 profit per share.
XLK: 1.88 profit per share.

As a note of caution, the QQQ trade set up was originally confirmed at the same time as the SPY trade. When I closed out the SPY trade on October 31, the QQQ trade was still in effect, so I took it and it worked out profitably. However if the QQQ trade had been taken instead of SPY, the QQQ trade would have been closed out for a loss, as per the trading system rules.

The moral of the story is, when multiple trades are confirmed, always take the one with the best consistent track record, and keep your trade positions small so that a loss does not materially affect your ability to continue trading.

 

Strike A Blow For Liberty, Don’t Vote!

“VOTING: It’s deciding which criminal gets to steal everything you have.”

George Carlin Doesn’t Vote  YouTube video, watch here.

In Steve Chapman’s article War, Peace, and the Next President, read here; it is clear that whoever becomes the next president, Americas military adventures around the world will continue. As any libertarian or anyone with just ordinary common sense understands, these military adventures are inherently incompatible with freedom.

It has been said that war is the health of the state. That is, wars allow the state to assume powers and privilege it would not be able to assume in times of peace. These powers, of course, are always at the expense of individual liberty. For the past 14 years we have been at war continuously. The war on terror is a political and military dream come true. It is a war that can never be won, therefore will never end. The extraordinary powers obtained to fight the war will never have to be rescinded when peace never comes, but will continually be expanded.

Ever since WWII and America becoming a world power and now the sole super power, we have evolved into a true police state, read here. Eisenhower’s warning of the military industrial complex has come true.

My point of all this is that the system is rigged. No matter who is elected, nothing changes, read here and here. The military industrial complex, also known as the deep state, have such complete control that any potential reformers are bought off, marginalized or eliminated, they shot Kennedy didn’t they? 2016: The Year Americans Found Out Our Elections Are Rigged by Nick Bernabe of  The Anti Media, read here.

If you vote you are part of the problem. The election legitimizes there actions. So don’t vote. I haven’t voted in years. Ultimately they cannot continue these wars and the police state without our cooperation. It will not end until enough of us stop cooperating. So don’t vote. If no one votes they can’t claim a mandate to continue their wars and the police state. What If the Empire Held an Election and Nobody Came? Read here.

If you really want freedom now, vote with your feet. See here and here.

Here is another option, Vote outside the voting booth, read here.

After writing this blog I came across this article. Doug Casey’s Top Five Reasons Not to Vote read here. It’s almost as good as my blog, mine’s shorter.

Second October Trade

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.

My trading system generated a trade setup in SPY on October 26, which was confirmed October 27. However I missed taking the trade, at the close, on the 27, therefore I entered the trade, at the open, October 28.

October 28: At market open, bought to open 30 SPY at 212.85.

October 28: SPY buy signal again confirmed at the close, therefore I bought an additional 30 SPY at 212.85.

October 31: Sell signal had me selling to close 60 SPY at 212.71.

Net Loss $-18.90, ROI -0.34%

At the same time that a trade setup was generated in SPY, trade setups were also generated in IWM, MDY and QQQ.

The IWM trade lasted two days and produced a profit of 0.61 per share. MDY trade closed out in one day with a profit of 1.97 per share. These were hypothetical profits of course, as I was not able to take those trades as the SPY trade required all my available capital.

As I closed out the SPY trade, QQQ was still signaling a buy; therefore I went long 50 QQQ. This trade is still on going and I will post the results after I close it out.

With the presidential election next week, it seems to be producing a lot of volatility in the markets. Hopefully that volatility will produce some much needed profits for the trading system.

In the mean time the resurgence of the gold and silver bull market has been going through a normal correction since early October. The low for this correction appears to be in as gold and silver and the mining shares have made some nice up moves the last couple of days.

Although The 74% Solution trading system has performed miserably this year, my gold and silver investments have performed spectacularly. Diversification does pay!

 

First October Trade

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.

Friday October 14: Bought to open 45 IWM at 120.54.

Monday October 17: Sold to close 45 IWM at 120.48.

Net Loss $-6.70, ROI -0.12%.

This trade is worse than it looks. The set up for this trade occurred on October 12, market action confirmed the trade set up at the close  of October 13. My job had me on the road that entire day and I was unable to take the trade.

To make a long story short this trade should have had me buying on October 13, 14, and 17, closing out the trade for a nice 50+ dollar profit on the 18th. As my trade record above shows I entered the trade on the 14th and exited it at a loss on the 17th. A bad fill on the opening of the trade and a squirrely market head fake exit on the 17th instead of the 18th resulted in a small loss.

As the saying goes “stuff happens”. Even when the system works, poor execution, a squirrely market and bad luck conspire to turn a profitable trade into a loss.

Joe Arpaio; America’s Dumbest Sheriff!

November 11: Update; Joe Arpaio is fired, he loses election. Finally we are rid of this bozo. He still has legal problems, he may end up in jail yet; one can only hope!

I generally do not pay much attention to local, small time politicians such as Sheriff Joe Arpaio.  Living in Arizona it is very difficult if not impossible not to notice Joe Arpaio, the man is a true media whore. Hardly a day goes by that he is not on TV, the radio on in the papers.

My first impression of Sheriff Joe was interesting indifference. The first three things that attracted my attention were the tent cities, his putting a bright red neon motel “VACANCY” sign over the prison, and then there was the elimination of coffee, cream and sugar to the inmates, and giving them only bologna sandwiches, carrot sticks, celery and maybe an apple for there meals. This last thing, he never stopped bragging that it was only costing one dollar a day to feed the prisoners.

Sheriff Joe’s constant bragging about how his policies were saving the tax payers money, brings me to the incident that changed my opinion and exposed Sheriff Joe for the phony that he truly is.

Several years ago David Hendershott, the number two man in the Sherif’s office decided to retire. He had put in his twenty years and qualified for a full pension. This is all well and good, except the next day after he retired and qualified for his pension, Sheriff Joe hired him back to his old job at full previous salary. This salary was in the $100,00 a year range. Clearly he had no intention of retiring. If he wanted to keep working then he should not be drawing a pension. Saving the tax payers money, I think not!

Since then Sheriff Joe was forced to fire David Hendershott due to a scandal involving abuse of power, nepotism, intimidation and policy violations. On another note, another one of Sheriff Joe’s top aides retired after 20 years, received full pension, but this time Sheriff Joe hired him back as a civilian consultant.

This is only the tip of the iceberg. Lawsuits, racial profiling, wrongful death, political witch hunts, inter-departmental bullying and the list goes on; the cost to Maricopa County tax payers in excess of $50,000,000.00, that’s fifty million dollars. See this article here.

The image that is fixed in my mind is of  the many times Sheriff Joe Arpaio was being interviewed on TV concerning one of his many scandals. The Sheriff always got a pained pouty look and answered with a pouty voice; I am the elected Sheriff, I can’t be fired, I am just doing my job, nobody is going to stop me from doing my job. That pouty look and voice reminded me of a four year old, poor baby.

Sheriff Joe Arpaio may get fired after all. Check out his latest costly scandal, Sheriff Joe Arpaio found in contempt of court in racial profiling case, read here.

 

 

 

Second September Trade

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.

Friday September 9: Yesterday’s  trade setup was confirmed today, bought to open 30 SPY at 212.80.

Monday September 12: Today’s  exit signal has me selling to close 30 SPY at 216.50.

Net Profit $104.60, ROI 1.64%.

Today’s profit finally puts me in the profit column for the year, net profit  $25.16 for the year.

First September Trade

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.

September 1: An SPY buy setup on August 31 was confirmed today. Bought to open 35 SPY at 217.19.

September 2: Todays sell signal has me exiting this trade; sold to close 35 SPY at 218.38. Net profit $37.65, ROI 0.5%.

This is my first trade since my trade of June 16, kind of a long dry spell.

I almost missed this trade like the trade I missed at the end of August, again distracted by work. This time however, I did manage to get on my computer in time to enter the trade in after market trading, which starts fifteen minutes after close.

At that time SPY was trading at the 217.19 area, well below the previous days close of 217.38. My buy order was filled at 217.19.

Later that evening I discovered the official SPY close was 217.39, once cent above the previous days close of 217.38. This was not a confirmation of the trade setup of August 31.

Now the question was what to do as I was in a trade I should not have been in. SPY tracks the S&P 500 stock index, more specifically the S&P 500 futures contract. Normally when trading SPY I completely ignore the actual S&P 500 futures contract. However both the S&P 500 index and futures contract closed down; therefore I decided to wait and see what tomorrows action in SPY would be at the open. SPY opened strongly to the upside, so I decided to let the trade run until the close. The close confirmed a sell signal and a modest profit. It is nice when even mistakes turn out to be profitable.

Basically what happened is the S&P 500 futures contract confirmed the trade setup which I traded using SPY; that’s my rational anyway.