Markets I Trade: April 23, 2019

New this week! I'm testing a concept where I am including momentum factors in my weekly updates. The momentum factor number is based on a multi-model trend system that can be applied to a range of markets. Most equities will be on a scale of 0 to +10. Certain markets like volatility and currency pairs will be on a scale of -10 to +10.

I will also be shifting my position size in response to the momentum factor. If the factor increases, my position will increase; if the factor decreases, my position will shrink.

Feel free to ask questions or leave comments about this development.

In my non-registered account, I am developing my trend following strategy continuously. I don’t pretend to have all the answers. I am sharing this ongoing learning journey with you in this series.

I am always exploring new methods of trading, new markets to access, and better control of risk and opportunities. My main goal is to avoid large losses while achieving reasonable returns over time. I try to focus on trades which I believe have good reward-to-risk ratios.

You will see me trade index products, currencies, and commodities primarily with futures contracts and LEAPS options for maximum capital efficiency. I try risk small amounts of capital with each trade targeting high return multiples on that risk.

One thing that is easy to notice is most weeks have no action and trading is quite boring. The equity based positions move in relative tandem. Volatility positions are the only place where exciting things seem to happen more frequently.

*Information on this post is dated at market close, Monday, April 22, 2019.

IWM: LEAPS Options

Credit: StockCharts.com

Momentum Factor: +9

I purchased IWM $160 call options on January 15, 2019 when IWM was trading at approximately $143 per unit. IWM is hovering in that $154 - $158 range for the past few weeks now; it will be interesting to see in which direction the price range breaks.

EEM: LEAPS Options

Credit: StockCharts.com

Momentum Factor: +10

I purchased EEM $45 call options on January 15, 2019 when EEM was trading at approximately $40.50 per unit. EEM has made another new high this past week within my holding period, showing stronger signs of an uptrend. This coincided with another increase in my momentum factor.

KWEB: LEAPS Options

Credit: StockCharts.com

Momentum Factor: +9

I purchased KWEB $50 call options on February 20, 2019 when KWEB was trading at approximately $45.10 per unit. KWEB recently made new highs within my holding period.

VXXB: Options

Credit: StockCharts.com

Momentum Factor: -10

On March 11, I purchased in-the-money VXXB $50 put options when VXXB was trading at approximately $31.25 per unit. The price continues to move lower and my trade is showing a good profit.

EFA: LEAPS Options

Credit: StockCharts.com

Momentum Factor: +9

I purchased EFA $60 call options on April 9, 2019 when EFA was trading at approximately $66 per unit. The price of EFA continues to move up since my purchase, placing my trade in profit.

Comments & Questions

All comments are moderated before being posted for public viewing. Please don't send in multiple comments if yours doesn't appear right away. It can take up to 24 hours before comments are posted.

Comments containing links or "trolling" will not be posted. Comments with profane language or those which reveal personal information will be edited by moderator.

Leave a Reply

four × = twenty four