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.