Sorry to bore you with this subject again. It's just one of my keen interests. Louie, my trading partner, has lost some of his
joie de vivre in recent months and hasn't been in a risk taking mood, so I finally opened my own trading account. I did a mini-gold April contract in March and made about $400 on a minimal investment, so I figured I was ready for something bigger. I went long a 100 oz June contract last week (when my April contract was closing out,) and then BOOM a 40 dollar jump in the price of gold from Friday to Wednesday. That means we made $4,000 in three days. What fun. I've got a "stop loss" sales order in at $7 below the market to get out of the contract when the market adjusts downward. That means for example that I'd automatically close my position when the market weakens, and have maybe a $3,300 profit instead of selling today fot the whole $4,000. But in the meantime if gold continues to move higher we'll continue to profit. Deciding where to take profits is one of the tricky parts. Placing a stop loss sales order at a pre-determined price allows one not to worry about making that sell or not sell decision everytime the mearket looks a little shaky. Worst case the price could drop $7, trigger my sell order and bounce right back. Then instead of having a where to get out problem, I'll have a where to get back in problem. But that's an OK problem to have.
Emboldened by this recent good fortune, I placed an order to sell a mini Dow contract. The order is to sell the Dow June contract if it falls to 11250. Its at 11320 now, and whenever the Dow gets up around 11300 I think its going to drop back down, and one of these times it's going to drop Big Time. With a mini Dow you only make or lose $5 for every $1 move in the market price of the index future. Maybe if I do OK on a Dow short with the mini contract I'll try a regular contract where the gain or loss is $10 per every $1 move in the market price.
Worst case for an excitable type like me is that the markets just go sideways and spoil the fun. Well, we'll see.
PS For Lauren I tried to add a snapshot of Cheaty, Did it work?
2 comments:
This is really Steph and not Kim!
Happy day for Dad making Money and us all going to the beach this summer! (I called Gintaras and left a message but they called back when I wasnt at home I will have to try again! ) I didnt really get the second part of your post about the DOW? But I 'm glad it makes since to you!
WHo is Cheaty and what does he have to do with Launre?
On my previous post I referred to the Ohio State coach, Jim Tressel, by the nickname the Notre Dame fans gave him, Cheaty McSweatervest. Lauren thought that was funny. So I posted his picture.
Love
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