Market Close August 6th, 2020

We added a new trade yesterday. That gives us 4 open trades of the five instruments we follow. Oil has also closed above resistance meaning if the price rises above $34.72 (UCO = UP for oil) we will be triggered in.

Before we look at the chart and details for the latest trade to trigger, I want to mention that it may seem unusual to have so many symbols active since there are different economic forces that act on each one. This has occurred because some of our symbols represent the underlying instruments declining.

If all the underlying instruments were going up, we would have to wonder.

Let’s take a look at our newest…

S&P 500: SSO = UP, SDS = DOWN

SSO

If you remember from the Round up, I mentioned that the price of SSO needed to rise above $140.56 to trigger a trade. This was because there had been a close above a resistance level.

Here are the details of our trade:

$28000 (20% of portfolio)= 199.2, rounded to 200 shares.

Trailing stop is placed at $136.01, which translates to the following risk:

200 shares X $8.74 (140.56-136.01) = $1,748 (< $2,800)

Godspeed, Little Trade…

While we are here, let’s have an update on the open trades:

UGL: stop $8.48 New high $83.85 Trade is RISK FREE

UDN stop $.51 New high $21.24 Trade is RISK FREE

UBT stop $16.04 New high $ 147.30 Trade still in danger zone

As a reminder, the reason trades are risk free is due to the trailing stops following the price up as it climbed. When the price stops climbing, and maybe declines a little, the stop is anchored in place. Risk free means that if the price were to suddenly collapse, there would be no loss, and a little to a lot of profit.

The other question you probably have is why are the position sizes 20% of the portfolio, when we started the rule was 10%. The reason is that we are using trailing stops due to the volatility. Having said that, we are staying with 2% maximum risk per trade.

I think that does it for now. Next instalment will be the weekly round-up. Try to contain yourself.

If you have any questions or concerns, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

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