Tuesday, December 19, 2006

Russell Me Up


Today was a great day to trade the Russell 2000. There was a large, True Range, of how many points it fluctuated from the opening high to the closing low. There was a gap up this morning on good news, yadda yadda, but I started to see weakness when there was no follow through on the GAP up. Most major indicies started to pull back and fill in the GAP from the "over-buying". This is one of my favorite plays as most of you know, the Opening Range Breakdown.

Each Russell 2000 E-Mini contract (ERT) costs $500.
If you got short 1 contract after the opening range breakdown, which was very clear today, and had little risk involved, you would have netted anywhere from 5-8 points depending on your tolerance for holding onto a winning position, and letting it run.
With the $500 initial capital for the contract you could have made $500-$800, which is a 100-140% return on your money (stand up and dance if you like these).
Most people still can't grasp the concept of these types of gains. There is leverage involved, yes, but imagine using one's keen day-trading skills to harness even more profit using the same principles, this isn't about GREED, it's about pure EFFICIENCY!

Hey we can't expect to walk into a huge house and see all the rooms at one time, right? Well the same applies to the Financial Markets and all the Derivatives, aka "trading vehicles", available to us traders.

I consider today, easy money.
I consider day-trading stocks harder earned money.
Your Pick, Your Time,
Just Stay In The Green,
CalTrader


3 comments:

john said...

Cal,

Thanks for posting that huge gain last week. I opened my futures account, and printed some easy money yesterday on the NQ. What many others are failing to realize, is that you limit your risk with futures the same as you do with stocks. Your risk is determined by your stop and the # of contracts.

IMNSHO (not so humble opinion) stocks are riskier, because they can get halted.

I also had one of the easiest (read stress free) trading days ever. I simply watched the NQ on a few different time frames to determine my point of entry.

Keep it up.

Anonymous said...

Remeber this comment:

You are going to get slammed as a trader. I can see your a young trader who thinks this is "easy" and you cant be stopped. Been there done that. Just dont "blame" the market when u get ripped.. I have met lotsss of traders and have NEVER met one who is success that isnt level headed. Just a warning. Noone has EVER made it until they learn this lesson. So dont cry when it comes.

Anonymous said...

dont hurt your arm patting yourself on the back just yet. keep levering it up and we'll see how long you last.