What is trending?....
Christmas shopping time! Well, I thought that I would have a look and see what's trending on eBay. Seems like hot-dog toasters are the thing! Have a look and see on eBay. Definitely not my style of cooking!
As you know, I am a trend follower. I like to get in on trends when they start and follow them for as long as I can. When the price of Micron Technology closed above its' weekly ma52, I was definitely interested in this.
Why? Because it seems quite a 'trendy' stock. It moved up in a steady uptrend between 2013-15, then a steady downtrend from the middle of 2015 until the summer of 21016, and then crossed up above the ma52 again. I decided to buy a 'call' option. Call options rise in price if the stock price moves up. I bought a couple of call options, spending $359. Options have an expiry date, so there comes a time where I have to close the option, which I did recently, receiving $1255. This is a return of 249%. Not bad! If I had bought the shares, I would continue to hold them, because who knows how far the price will rise. But if I had bought the shares, I would have had to spend $3,076 (nearly 10x the amount that I did spend) to make the same profit in the same time-frame.
OK, so it's great when things do trend, but of course, they do not always do so. Back in the summer, the price of coffee (COFF) was rising, and closed, in June, above the ma52. I had great hopes of a steady rise in the price of coffee and great profits, so I bought some of the ETF COFF.
However this week, the price of coffee fell below the ma52, so I am closing this trade, for a slight loss. It doesn't always work out according to plan. In these situations I am always tempted to hang onto the share/ETF in the hope that it will rise in price again. It doesn't always do so, and a losing trade can turn into a disasterous trade if the price continues on down. Prices can always go lower than we think. I have learned this through painful experience! I am still waiting for the price of oil to rise (a lot) for some of my oil trades to break even!
These trades are not the mainstay of my trading, of course. You will need to see this week's video to see what asset classes I am still invested in, and what classes I am out of . The trades discussed above are merely icing on the cake (or not, in the case of coffee)!
None of the above is financial advice, of course. I have no financial qualifications, dear reader. I am simply telling you about my trading in order to share my experiences. Do you know anyone else who might be interested in receiving my blog posts via email? Do get them to sign up here.
Anyway, I had better get back to looking to see what is trending outside the world of finance, and buy some Christmas presents!
As you know, I am a trend follower. I like to get in on trends when they start and follow them for as long as I can. When the price of Micron Technology closed above its' weekly ma52, I was definitely interested in this.
Why? Because it seems quite a 'trendy' stock. It moved up in a steady uptrend between 2013-15, then a steady downtrend from the middle of 2015 until the summer of 21016, and then crossed up above the ma52 again. I decided to buy a 'call' option. Call options rise in price if the stock price moves up. I bought a couple of call options, spending $359. Options have an expiry date, so there comes a time where I have to close the option, which I did recently, receiving $1255. This is a return of 249%. Not bad! If I had bought the shares, I would continue to hold them, because who knows how far the price will rise. But if I had bought the shares, I would have had to spend $3,076 (nearly 10x the amount that I did spend) to make the same profit in the same time-frame.OK, so it's great when things do trend, but of course, they do not always do so. Back in the summer, the price of coffee (COFF) was rising, and closed, in June, above the ma52. I had great hopes of a steady rise in the price of coffee and great profits, so I bought some of the ETF COFF.
However this week, the price of coffee fell below the ma52, so I am closing this trade, for a slight loss. It doesn't always work out according to plan. In these situations I am always tempted to hang onto the share/ETF in the hope that it will rise in price again. It doesn't always do so, and a losing trade can turn into a disasterous trade if the price continues on down. Prices can always go lower than we think. I have learned this through painful experience! I am still waiting for the price of oil to rise (a lot) for some of my oil trades to break even!These trades are not the mainstay of my trading, of course. You will need to see this week's video to see what asset classes I am still invested in, and what classes I am out of . The trades discussed above are merely icing on the cake (or not, in the case of coffee)!
None of the above is financial advice, of course. I have no financial qualifications, dear reader. I am simply telling you about my trading in order to share my experiences. Do you know anyone else who might be interested in receiving my blog posts via email? Do get them to sign up here.
Anyway, I had better get back to looking to see what is trending outside the world of finance, and buy some Christmas presents!
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