The Opportunity Cost of Shorting Apple

It’s been a while since I posted an Apple trade on here.

AAPL is a stock that moves far and fast. It’s not for the faint hearted, but when you get to know it you find that actually, beyond the very short term whipping about, it moves as predictably as any other stock.

The high price can be something that puts off a lot of traders, which is understandable, but it’s not a reason not to trade the stock. Here I traded 1000 shares, giving $880 profit in ten minutes (exiting when it failed to hit the target — just!) But a smaller account could trade 500 shares, or even just 250, which would still have yielded $220. Sizing our position in relation to the price of the stock is one of the great advantages of trading stocks over futures.

But that’s not the whole story of this trade. We need to look at another trade I took on BZUN:

This was another ten minute short, taking a clear entry and exiting when it just kind of petered out. In relation to the price of the stock, this trade was way more profitable than the Apple one above. Had I not had cash tied up in Apple, I could have increased my size four-fold on this one, turning a $450 profit into an $1,800 one (as opposed to $1,320 for the two trades combined). So actually that seemingly nice Apple trade actually cost me $480 in lost profit. Opportunity cost is real.

Want To Make $200k+ A Year?

Here are a couple of textbook quickie trades. I will warn you that they are dull, but there’s a reason I’ve posted boring trades today. First, a little short on HUYA:

Standard fare with a clear setup and a good target, easily hit. There was more after lunch, and even a late rally for anyone who likes that kind of thing. Obviously I was long gone by then, happy with my $480 made in ten minutes in the morning.

Here’s another, ELAN:

Another textbook short, essentially the same trade as HUYA and happening a few minutes earlier. The price dropped relatively more quickly, but the range was reduced so it only made around half the profit, “just” $260.

There’s nothing exciting about these trades, they’re not the massive $1k+ winners that I know some readers love to look at. But the fact is these kind of trades are very much the bread and butter of day trading life.

It’s easy to find three or four trades like these every day. They are simple to trade, low risk, low stress, and cobined they add up to a four figure profit. Do that just four days a week, take four weeks vacation, and you’re looking at making a couple of hundred thousand dollars a year, minimum. Minimum? Yes, because let’s face it, if you trade four mornings a week you’re going to come across some of those big winners as well every now and then, which will boost the bottom line even further.

$200,000 a year is not a bad “salaray” for working only about three hours a day, four days a week, from home (or anywhere else in the world). There might be other jobs that pay as well, but off the top of my head I can’t think of any. Certainly none that offer the kind of freedom day trading can.

I’m not posting these figures or charts to boast or brag. I post it because every week I get questions like “how much can I make day trading?”. There’s no single answer to that kind of question, but I hope this post at least gives an idea of what’s possible.

The Easy Way To Profit From Ebay

I’ve never got on with Ebay, personally. I think I’ve bought two items there over about the last fifteen years, and both times they never arrived. A one hundred percent failure rate caused me to lose confidence in the place. I prefer Amazon, even if it’s trendy to bash them these days for a multitude of reasons I won’t go into. Mrs Walsh, on the other hand, loves Ebay, and can regularly be found emptying the family coffers on the site.

Ebay is occasionally useful to me for one thing though — as a stock to trade. It popped up on my list on Friday, and provided me with this nice little short.

A classic entry, right out of the book, off-chart confirmation, and a couple of clear price targets made it a no brainer. I nearly exited the whole lot at the first one when it coincided with momentum dropping away, but reading the price suggested there was more to come, so I only took off half. As it happened it did indeed drop further, hitting the second target quickly once it got going. All of which added up to a $500+ profit in under half an hour. That’s a much better way to do ebay!

Here’s another quickie from Friday — CMCSA:

Nothing exciting, just another standard setup which yielded only a couple of hundred dollars. But they were stress-free dollars, and that counts for something, especially on a Friday.

Twin Trades

Here are a couple of quickie textbook trades. Coincidentally, they produced identical profits. First off, CPB.

A bog standard momentum trade taking $600 in about ten minutes. There was a bit more to be had in the last hour too, for anyone hanging around at that time.

Next up, WLL:

Another pretty much textbook trade. There were some substandard entries before the one I took. One of those I rejected for the usual off-chart reasons, the previous one I actually missed because I was watching another chart. Sometimes missing an entry is a good thing! Once in, it was a smooth ride, jumping ship when the momentum ran out for another $600.

Trades, Friday 22nd Feb 2019

This first trade looks more complicated than it was. The first entry was a dud — momentum dropped off a cliff so it was time to get out. Fortunately there had been just enough momentum at the point of entry to get me over the line so I could exit with enough to cover commissions (and a few bucks extra), so not a total loss. It’s always about escaping with your account intact. I’ll keep banging that drum forever. We can take tiny losses for days or weeks, and we can take tiny profits forever. It’s about protecting capital and being there for when the winners come along.

As it happens, the winner came along on the second go. Then things moved far and fast. I scaled out, taking half off in an obvious place and letting the rest run risk free. Sometimes that yields more than just getting out at the first sign of trouble (as was the case here), and sometimes you end up with a bit less. Again, it’s about being there for the bigger winners. In all, more than fifteen hundred dollars profit from this trade, but it was definitely more ‘hard work’ than I prefer!

The second trade I’m posting (and here’s your regular reminder that I don’t post all my trades here, just a selection that I think are interesting), was much more vanilla. Textbook in and out for a quick profit.

There was (a lot) more to be had for anyone taking a second entry on IQ, but I was out by then. Volume was drying up and we were heading into lunchtime. With a decent profit for the day already banked, I wasn’t prepared to risk another entry. My loss.

Having Your CAKE And Eating It

First a two-biter. BG was a bit of a wild ride, dropping precipitously before climbing all the way back and then some. The first trade was an exit on target. When it set up for another go, complete with confirming momentum, there was no reason not to have another go, and indeed the second bite (complete with another obvious exit target) proved even more profitable than the first.

Sure, there was plenty more on the table, but as I’ve written numerous times, my strategy is all about taking the easy middle bit than trying to pick tops and bottoms. Two simple, low-risk trades produced a four-figure profit between them. I’ll take that every day over the stress of trying to run a trade to the very extreme, thanks.

Next up, the Cheesecake Factory. I don’t mind admitting that for the longest time I believed that place was a made-up establishment existing only in the world of The Big Bang Theory! Turns out it’s real, and tradeable, too.

I also don’t mind admitting that I was a little more wary of this trade going in because the setup was not perfect. There was a good easy target though, and I knew I could get out with a 2-3 cent loss maximum, so it was worth the risk. Well worth it, as it turns out.

$67 / Minute Daytrading Nasdaq

Trades – Tuesday 19th February 2019

After the long weekend with the markets closed on Monday, here was a nice trade to get the week rolling. Textbook entry, clear enough exit, and $1.35 banked per share, for a nice quick profit of $1,350 trading just 1000 shares. Obviously that could easily be doubled by sizing up. That works out about $67 per minute spent in the trade, which whilst not the most profitable trade posted on this blog, is nonetheless a nice bonus after the day off.

Here’s something different — a late session trade. After missing a few days last week with sickness, and with the holiday on Monday, I felt guilty at not having been active enough recently. So I came back after lunch and watched the end of the session, which meant I was around to catch this little rally on MU (core) for a few hundred dollars extra.

Trade, Thursday 14th Feb 2019

Just time to post this quickie — a ten minute trade straight off the core list.

Not much to say. Standard setup, good clear entry, obvious price target. Five hundred in the bank. Perfect kind of trade for when you’re still feeling a bit groggy from the flu. Or anytime, really. Who doesn’t like easy ones?

Trades, Wednesday 13th Feb 2019

I’ve been unwell since the end of last week, hence not having posted any trades here for a few days — nothing to post. Back in the saddle now, so here are a couple from Wednesday. Nice easy ones that don’t require thinking. I can’t be taxing my flu-addled brain too hard..

Five minute in and out on TEVA. Clear signal + obvious target = no brainer. And I have no brain to speak of at the moment, so this worked for me. $330 profit pays for some hot drinks and paracetamol.

Another five minute trade, only this one in the opposite direction. Dropped quickly, and started to recover even more quickly, so again, it did not require much thought to get out at the first obvious target. Almost four hundred dollars profit makes me feel better about getting out of my sick bed.

In all seriousness, I’m well over the worst. I would not have risked trading if my head wasn’t up to it, it’s just not worth it. But nice quick simple trades like these, whilst not massive winners in dollar terms, are ideal when you just want to keep things ticking over.

Trades, Thursday 7th Feb 2019

Yesterday I posted a trade worth $100/minute. Today’s first trade beats that handsomely. Here’s what happened on GRUB:

That’s well over four grand in well under ten minutes. As I said yesterday, trades like that don’t come along every day. When they do happen, we need to treat them like any other trade. A glance at the scale shows that this stock was extremely volatile prior to my entry, trading relatively massive range already. So all the signs were there that this could be a big winner (it had already travelled more than $5).

It’s easy to be intimidated by that kind of volatility, but as long as we remember that the same rules apply whether the stock has moved $5 or 50 cents, we shouldn’t go too far wrong. Tight money management keeps us from huge losses. Had this not worked right away, I would have been out in a heartbeat. Given the speed it moved, that might have meant taking a few cents loss in the time my exit order went through, but that’s an acceptable risk given the potential reward.

The other trade I’m posting for today was much more ‘normal’. This was BBT:

Much more sedate, the sort of thing we do see every day on the NASDAQ.