Back to the Drawing Board

We are proud of what we have accomplished, but our current aggressive trading technique is useless for a real account. It's much too risky. No matter how good a trader may be, mistakes are bound to happen, and our current technique just doesn't leave room for them. This is irresponsible, and we do not want these bad habits to become the norm, so we are going to scrap all of our work thus far and begin working on a more conservative system.

In preparation for this trading research our virtual account will be reset and given a paltry $10,000. Our goal will be to consistently gain 7 to 10% a month. Risk will be minimized by using fewer stock options, more stocks, and by diversifying our portfolio. Positions will be held longer than before making market timing less crucial.

From September 25 to November 2nd the ERC Trading website will be silent while we conduct preliminary research and execute test trades. We will report our findings on November 2nd. The technique will then be used for 6 months afterwards to see if it can succeed in consistently gaining 7%-10% per month.

We will be back on November 2nd. Until then, goodnight and good luck.

Old Aggressive Account Update

• Starting Value: $100,000.00
• Current Value: $189.016.28
• Account % Gain: +89.01%

account started August 28, 2007

Positions

SPY Calls Purchased

800 (!) SPY OCT 153 Calls purchased at $2.80

Is this the beginning of the next leg upward? We think so!

EODR Wednesday 9-19

The market appears to be in neutral territory with no reason to continue buying (the rate cut has already been acted upon) and no reason to sell either (the rate cut has changed the prior gloomy outlook). We sold our S&P 500 Index (SPY) Calls because we didn't want to risk our entire account during such uncertainty. Our outlook remains positive though, and we will be looking to buy SPY Calls again in the future.

Account Update

• Starting Value: $100,000.00
• Current Value: $234,016.28
• Account % Gain: +134.01%

account started August 28, 2007

Analysis


Positions


Order Status

SPY OCT 148 Call Sold

SPY OCT 148 Call sold @ $6.80

SPY OCT 149 Call Sold

SPY OCT 149 Call sold @ $6

Selling Everything

We are closing all of our positions.

Mission Accomplished - 21 Days, 117% Gain

Our goal was to double our account in 33 days. We not only accomplished it, we surpassed it. In just 21 days our account has skyrocketed 117% to $217,769. While these gains may have come quickly, the road to success has been long and arduous.

Account Update

• Starting Value: $100,000.00
• Current Value: $217,769.88
• Account % Gain: +117.76%

account started August 28, 2007

Positions


Balance

EODR Monday 9-17

Waiting for the Fed.

Account Update

• Starting Value: $100,000.00
• Current Value: $145,309.88
• Account % Gain: +45.30%

account started August 28, 2007

Positions


Balance


Order Status


Activity

SPY Calls Purchased

We have purchased 130 SPY OCT 149 Calls (.SFBJS) @ $3.80.

EODR Friday 9/14

We have interpreted the market's calm recovery from Friday's early morning sell-off as further proof that investors are done selling and are ready to begin buying again. The Fed's lowering of interest rates on Tuesday, which is almost certain, should dispel any lingering doubts about the strength of the economy from even the gloomiest of investors' minds. Next week, in our opinion, is going to be one of fantastic gains.

In preparation for the coming buying frenzy, we have placed a market sell order for Vertex Pharmaceuticals that is to be executed immediately upon the opening of the market on Monday. The money from the sale will be used to buy more SPY Calls.

Account Update

• Starting Value: $100,000.00
• Current Value: $155,767.26
• Account % Gain: +55.76%

account started August 28, 2007

Positions

EODR Thursday 9-13

We are not happy about the small gains made by our account today. Our October calls have proven to be too conservative for our needs. We will be placing our $28k of cash reserves plus the funds from selling Vertex Pharmaceuticals into more aggressive stock options sometime next week. We're thinking September SPY Calls for quick and hopefully lucrative trades before expiration.

Account Update

• Starting Value: $100,000.00
• Current Value: $157,904.96
• Account % Gain: +57.90%

Positions

EODR Wednesday 9-12

We purchased October options instead of September options because September options only have nine days remaining until expiration, which is too close for our comfort given the market's recent volatility.

Our long-term view on the market is extremely bullish because:

1. The market has shown exceptional resilience despite a deluge of negative news and talk of a possible recession.
2. It's been 47 days since the major decline in July.
3. With time, bad news loses its negative impact on the market.
   

These points may seem too simplistic to be making predictions from, but they are all we need for our system of trading. We ignore almost all economic facts and figures and concentrate on emotions. We will talk about it in more detail in another post.

Account Update

• Starting Value: $100,000.00
• Current Value: $146,653.82
• Account % Gain: +46.53%

Positions


Balance


Activity

SPDR S&P 500 (SPY) Calls Purchased

We have purchased 230 SPY OCT 148 Calls (.SFBJR) at $4.40.

EODR Tuesday 9-11

We will be buying a large amount of SPY Calls tomorrow morning.

Account Update

• Starting Value: $100,000.00
• Current Value: $151,449.35
• Account % Gain: +51.44%

Positions

EODR Wednesday 9/05

No trades were executed today or yesterday. Like a jaguar, we are waiting for the perfect time to strike. Patience is of critical importance when trading.

A wise man once told us: "One moment of patience may ward off great disaster. One moment of impatience may ruin whole life."

Account Update

• Starting Value: $100,000.00
• Current Value: $151,227.72
• Account % Gain: +51.22%

Positions