Saturday, July 12, 2014

a little x was good for me

united states steel, stock ticker x (what were you thinking!?), is a psar-search star that i did well with recently. let me draw you a picture:
over the preceding 52 weeks, simulated trading for x on my optimized psar signals made $4,106 in 7 trades that each bought or shorted $10,000 worth of x.

on june 18, the optimized psar reversed and went long (simulated buy of 395 shares.) on monday june 23 i noticed a recent psar event on x and decided to live-trade x to the long-side. to get long on x, i bought a call spread by simultaneously buying the aug1 24 calls and selling the aug1 28 calls. i paid $2.00 for this spread and then entered a good-til-cancelled order to sell at $3.05, about 50% of the maximum possible gain in this trade. my risk was only the  $600 (=3 spreads * $2/spread * 100shares/contract) i paid for the spreads.

on july 11, just before the close, the trade hit my target price and i closed the trade for a 48% gain (net of commissions.) here's an image of these trades from my account statement.
the stock equivalent of this position would have been about 120 shares (=0.4 delta * 100 shares/contract * 3 contracts) and would have cost about $3,010 at the open price on june 23 of 25.08. if one were prescient enough to sell the high of 28.3 on july 11 then, maybe, one could have realized a 12.8% gain (~$385) but at 5 times the risk.

want my psar settings for x? come to the psar-search page where, for a modest fee, you can buy optimized settings for the acceleration factor/limit input parameters to the standard psar indicator. you can use those parameters in any trading platform that provides the psar indicator or in my sdi_psarstgy (free), pictured above, on the thinkorswim platform, which will provide an on-going back-test analysis as well as the indicator.

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