http://pathometrix.com/Movies/TOS.mov
I have recently open an account at Think-or-Swim. Immediately, they opened a paper trading account and they funded it with a fictitious $100,000.00 for paper trading. The account was opened on April 12th. I have been entering some PCCRC's following my well stated rules. The account is now worth $122,047.00, a 22% increase in only 1 month. If it was possible to keep this performance, in only 1 year, the account would generate $264,564 in gains, or a +264% return.
I think that it is very worthwhile for me to share how I did this, to show you the account, and the trades it is. Those of you with an inquisitive mind may look at each trade analytically and draw your own conclusions. I would go individually through each trade, unless there are questions. You will she that not all the trades are winners, but the losers have been limited.
However has Platinum, can go to the sharede folder called TOS paper (see instructions below). Others may look at the trade history in the TOS account, which I am posting as a picture below.
I am also posting a short video describing the account.
I am giving you access to a Platinum folder were I have placed all current trades and some of the trades I have done in the past. I intend to build from here. ALL trades are covered real time. That is, all these trades were entered at the time of publication or shortly before. Some of them are now closed, some are still active.
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These are the instructions:
First, you need to be in version 4.1 of Platinum. At login, you can change from 4.0 to 4.1
From the Site Map go to the last block on the first column. It is red and labelled "Folder-Share Tools",
The second to last item in this block is a hypertext: "Share Transfer". Click on that text.
This action will bring you to a page requesting you to enter a share Transfer key.
Here is the key to enter:
89ff85093842246d51104510226a037c
After entering the key, click "TRANSFER".
The Share Name will appear as JuanISar Share 5, and the folder transferred will be "TOS paper". select that folder and click "GO" to transfer the checked item to your Platinum. The Folder and its contents should appear on your Site Map.
Please give me some feedback here or privately if you prefer to my e-mail (PaperProfit1@mac.com). I really need to know if this is worthwhile for you or not.
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Here is the trade history in the account. Note that each trade filled by TOS, I have no control over the results, any more that you would onver your account.
Here is the cash balance history to show that the account was founded with $100,000.00 in mid April, about 1 month ago.
19 comments:
I have removed posting restrictions. Please post at your convenience.
I had been moderating posts to avoid spamming. Hopefully that problem has been controlled now.
Thanks for your work Juan, you give us a lot to think about.
Hi, this is Juan, I am posting here, from outside my account to see if I can post anonymously
I clicked the "Post a Comment" hypertext.
A page was opened which included a field entitled "Leave your comment".
I typed this message, then enter the word verification.
Then clicked on Publish your comment.
Hi, this is Juan again.
I have also done the same as above, simply by using my Username and Password from my Google account.
I clicked the "Post a Comment" hypertext.
A page was opened which included a field entitled "Leave your comment".
I typed this message, then enter the word verification.
I entered my Google Username (Paperprofit1)
and the password for my account.
Then clicked on Publish your comment.
I've been following your blog for a few months, I entered 2 sim PCCRC's one on WEBX the other on DE both worked out very nicely WEBX could have been exited in 5 weeks for over a 20% return and I just Exited DE today for more than a 30% return which breaks down to about 10% a month for this 3 month long trade. I will be looking for some new positions to trade and will follow up on your blog. Thank-you for all your time and effort on your blog it’s great to see someone paying it forward as you do here
Thank you Midas
Thanks Midas.
I am glad you were able to sign up and post.
Be sure to give us your candidates too.
Juan
I'll echo Midas' comments as well. Great stuff Juan. Will provide feedback on your backtest over the next few days.
Alex
Juan,
How many of your trades that you made in TOS will be actually traded using your real money as well ?
How long do you intend to maintain this posting of TOS paper account ?
Chiu
Juan,
Thanks for sharing your trades on the TOS platform.
Some interesting trades and the amount of trades gives a good balance
in your portfolio.
Shall watch this with interest, because you are trading with large
numbers of contracts and so it will be interesting to see how good the
overall cash balance develops.
Best Wishes.
Chiu
The reason I started this account was that I was awaiting a transfer of my account from OptionsXPress, so I started playing with the capabilities of the TOS platform.
PCCRC's have a lot to do with timing because I choose candidates among the many reporting earnings with a bounce in the stock price that is >10%. I do have similar positions on AMZN, AQNT and IMCL, but they were entered a week later, so they do not look the same.
You will see that I have exited a couple of the trades that were not working out. This is easy to do when you have strong winners.
I will keep doing this as long as there is an interest. You can follow my moves from the Platinum SHARE FOLDER labelled "TOS paper". You can even make suggestions if you'd like, for me to enter in the account.
As of today, the account has a liquidation value of $123,426.45 and an option buying power of $42,492.45.
I believe that the paper account is maintained as long as I have a real account with TOS.
Fortitude:
The reason I use this many contracts is to reduce the number of trades I need to follow. If you had a 100,000 account, you'd like to keep 10-15 trades and risk between 1-5% per trade. The risk on a PCCRC varies with the volatility, but it is usually quite limited, while the gains are unlimited in theory, in the practice varies from 20-30%>
Juan,
I am definitely interested. Look at the 13 PCRCC trades that you have put in the TOS paper account, you are doing very well. You had closed a couple of trades with only small loss. The two big winners are impressive, profit is more than double of the initial debit.
There is not doubt on strategy, the profit level will depend on the big winners that you are able to pick up.
One question is there a way that we could know the moment you have updated your Optionetics shared folder ?
I don't want to burden myself with a task I may not be able to complete. I am doing my own trading now.
You could go to the profit & loss and see where I have taken profits or change specific trades.
If I add new trades, they will be posted in the shared folder, and you will see the trade in your account too.
Thanks for expressing interest. To the level that others express interest, I will be doing more paper trading.
Also, contributors should include their own suggestions of trades.
CROX on 5/4/2007 is an 'in hindsight' trade that would have turned out to be an excellent PCCRC candidate.
Long term volatility was slightly higher than the 40% threshold typically used in this strategy but the (albeit, small) positive skew between the ATM options and the good earnings annoucement was a great set up.
I've done quite a bit of backtesting on this strategy (including adjustments to lock in profits) with impressive results, provided you stick to the rules (though that goes without saying).
One could argue that this strategy is working so well because of the run up in the markets we've seen as of late so I'm doing some backtesting as far back as 2003 and 2004. Will post with some follow-up comments later.
So I've gone through your backtest and have just a couple comments worth noting.
Overall the backtest results look good but there are a couple of set ups (both technically and fundamentally) that I personally would have had trouble entering to (but everyone has their own style of trading). The one that sticks out the most was the PCCRC on MHS. The stock went up on good volume but I couldn't find a good reason for it having gapped up.
I've backtested PCCRCs on stocks that technically met the criteria but also had good fundamental reasons for moving up. Every single one of them was a solid winner.
All that being said, the entry is only a TINY part of trading...what really counts is once you're in the trade. That is something that is difficult to discuss (in terms of backtesting) but rolling the short legs into the next month, rolling the long call up, etc are all good adjustments. All that comes with experience though.
One adjustment I haven't seen Juan do is simply turning the call ratio calendar into a regular calendar by selling the other half of the short legs. But that is another possibility.
I DO look for a fundamental reason for the 10%, the stronger the better. Think about it, is like letting the market tell you when to enter, instead of spending endless hours in fruitless analysis.
No matter how good your backtesting may have turned out, be prepare to pull the trigger when the trade does not turn out.
It will be very easy to lose faith when months go buy without big gains, then suddenly, you will strike gold and everything may appear rosy again. When you are making big money, closing losers may not appear as bad as when you close loser after loser. No matter, just TRUST that the good times are just around the corner.
Put about 2% of your account at risk, and watch out for volatility crush. Only modify WINNING trades.
Finally, read about "The Secret" or buy the movie, and ALLOW success to come to you. Set a goal, like $10K per month (depending on your account size).
Report your success and failures here, and we can look through your trade and see if there was something that could be done to luck in profit or avoid losses.
Experience is critical to manage these trades and turn a good profit. This is why it should be considered an advanced trade.
Hi Juan I'm happy to see all your hard work is really paying off for you
I would like to discuss some of the trades in the TOS paper account
1. Would you please explain your 4/26 adjustment on CEPH it looks like your were left with just long calls
2. You entered IMCL 10 days before earnings I thought you like to enter PCCRC's after earnings
3.I was also wondering why you closed out FAST and ISIL they seemed to be working out nicely
Thanks in advance for your answers
Being able to follow your paper trades is going to be a big help in understanding how to adjust and when to just exit
Thanks again Midas
Midas said: 1. Would you please explain your 4/26 adjustment on CEPH it looks like your were left with just long calls
Juan says: On 4/26 I rolled over my short calls from May to June. Actually I increased the number of shorts by 2 contracts, as a way to take profits. I still had 8 long calls more than shorts.
Midas said: 2. You entered IMCL 10 days before earnings I thought you like to enter PCCRC's after earnings
Juan says: My records show that I entered this trade on April 16 and exited on the 23, Imcl reported on the 26th. I see that the stock jumped in mid March and then entered a period of consolidation. Although i follow the earnings as a point of entry, you'd have to see the reason for the jump in March. This headline qualifies as a reason to enter the trade:
http://biz.yahoo.com/ap/070417/imclone_ahead_of_the_bell.html?.v=1
Then I exited the trade for a good profit in advance of earnings. When I company increases earnings goals, I make a move without hesitation. It is OK to take profits, when in doubt.
Midas said: 3. I was also wondering why you closed out FAST and ISIL they seemed to be working out nicely
Remember that this is a paper account given to me to test the platform. So don't be surprised about strange moves.
ISIL had a strong decline in IV for the short month but not the back month. I had the trade for only 5 days, I felt that $1200 was a good return in such a short period. At that time, the markets did not look nearly as strong as they look today, and the dow was testing the 50dMA, so I probably had a different psychologic attitude. Good to keep in mind, that taking profits no one went broke.
I would say the same about FAST, I was just testing the platform. Little did I know that AMZN would jump so strongly as to make me 10% in only a few days. I was in a profit taking as soon as possible kind of mood
Midas: Being able to follow your paper trades is going to be a big help in understanding how to adjust and when to just exit
Thanks again Midas
Juan says: Be aware that paper trading takes the emotion out of it. Even being under scrutiny as in publishing once's results give you a little more pressure to do well. It is OK to take profits and move to the next trade, because candidates are available every day.
Hi,
Your papertrade is great but I notice you roll CEPH and MDR from May to Jun. What criteria and when do we need to make such adjustment? I also notice you close the trade for IMCL for 14.4% and FAST for 5.7% only. Why?
happy trading
Happy said: Your papertrade is great but I notice you roll CEPH and MDR from May to Jun. What criteria and when do we need to make such adjustment? I also notice you close the trade for IMCL for 14.4% and FAST for 5.7% only. Why?
I usually rollover my trade 1 week before expiration. You may decide then that it is not worth staying in that trade.
You can certainly exit any of these trades at any time. A profit of 5.7% may be good if it is reached in 1 week, while a 20% profit may not be so good if it is obtained over 3 months with mutiple rollovers. It is clear that your state of mind place a roll. If I believe that pickings in the market are slim and I want so cash to pay a trip to Mexico, I might close a position.
In the case you suggest, I was really just testing the Think or Swim platform. Don't read too much into those moves. By the way, I still have a FAST trade in my cash account and it is not doing much of anything.... So there!
I understand that there is a luck factor involved. For me, a profit is a profit and it is better than nothing, so if you have any feeling whatsoever, that the trade is not going to turn out, exit the trade and cut your loses, and then look for the next candidate. Maximize your winners and cut short your losers.
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