As you may recall from last week's comments, we are expecting some level of counter-trend from the sharp lows the market reached recently but the long term trend is still quite bearish. This situation implies higher than usual volatility in the market. So this week we continued to focus on very short term trades, following the relatively fast motions typical of these uncertain days.
We actually had only two signals this week. On Monday we opened a long position which we closed the following day a few short hours before the market started a long drop.
Fig. 1a - QAVKD trade opened Nov 3rd
We caught the down-move with a trade we opened the following day, as shown in the Figure below:
Fig. 2a - QAVWF trade opened Nov 5th
The results are in the following table, which reports the individual trades, with opening and closing times and the price per contract at open and close of each trade. As usual, we also report what a $2,000 investment for each trade would have evolved to.
The table shows what you could do with a $2,000 amount utilized each trade. We are not compounding or re-investing, we simply buy the number of contracts allowed by the opening option price. In this first trade, each contract cost $370, so our $2,000 capital bought us 5 contracts. In the second trade, each contract cost $86so we could trade 23 contracts.
Once again, the results were outstanding, one trade producing a nice 10% profit, followed by a trade that more than doubled the capital at risk. A truly exciting week!
The initial $2,000 grew to $4,306. This is a profit of 115% over the initial margin.
