May 10, 2011 Trade Update - Locke In Your Success

Hi All,

Sorry for the lack of postings, I’ve had some unusual things going on over the last week and things are finally getting back to normal. In addition there were no adjustments to talk about till today anyway.

The May 55 day trade:

This really isn’t a 55 day trade as the most basic of rules were thrown out the window this month. Actually, I have not been trading it by the rules for several months now. Instead I’ve been experimenting with several different adjustment techniques which have been working ok for the most part but have cut into profits, especially this month. I know this because I have been trading the 55 day “by the book” in another account, side by side with the website 55 day trade, and in 3 out of the last 4 months, the standard rules have significantly outperformed my “experimenting”. As a reference, I’m going to show you what the trade by the book looks like and we can compare it to this butchered version. Just to be clear, I’m not unhappy with the way the website 55 has been going, it’s just that this month has had 2 very large whipsaws and just about every move I’ve made on it has come back to bite me. In most cases this does not happen.

May 55 “by the rules” is up well past the profit target and has been for some time, I’ve been trying to get some extra money out of it but with the market all over the map, it’s been unable to gain anything. If the market get too hot in either direction, I’m just going to pull the trade and focus on next month.

The May 55 day that we are stuck with was adjusted today and I added to the position size as well as I’ve got the money in the account and I’d like to see if I can get this to some kind of reasonable profit this month. If you remember the trade was at 3x 790/840/890 put butterflies. I sold one of those butterflies and added 2x 810/860/910 call butterflies. The position is currently down about $400.

The May Method 15 has not been touched and is doing well despite the large market swings but I don’t think it will hit profit target this month.. time will tell. The position is shown below:

As far as the June trade, I’m back on “the rule book”. Rules say before 30 DTE, I add when the market rises 20 points from the lowest close which means today. Today I added a 800/850/900 put butterfly. The position is currently at break even and is shown below: