Stocks and Options Advice from a Novice Pro

Apple Earnings Calendar Update

2010-04-14T10:11:00.000-07:00

Closed out the trade last week for a 9.8% profit. Apple has been
heading north immediately after I started the trade and had to add a
240 calendar. It still seems to have energy to move higher so I exited
it on Thurs. One thing I noticed about this expiration cycle was that
it has been more volatile than past cycles. The ipad release helped
push the stock higher.

3/22 BTO 5 AAPL Apr/May 230 call @ $5.12
4/1 BTO 5 AAPL Apr/May 240 call @ $5.95
4/8 STC 5 AAPL Apr/May 230/240 call @ $12.15

Apple Earnings Calendar

2010-03-27T22:50:00.000-07:00

Placed an Apple earnings calendar this week. Stock price was around ~226 earlier this week and got a feeling that the stock might continue on its bullish run so I picked a 230 strike. I want to get ~15% before exiting. That should happen sometime next week.

BTO 5 AAPL Apr/May 230 call $5.12

Apple Earnings Double Calendar Exit

2010-01-05T14:04:00.000-08:00

Apple has been slowly moving higher during the course of the trade. IV
has moved up 3 points since the start of the trade. (Slightly less
than expected) The strong open was a sign for me to get out this
morning. Don't want to be standing in front of a pregnant elephant.
Got filled yesterday at $10.35 for a $93 profit or 9.9% profit.

Apple Earnings Double Calendar

2009-12-23T23:44:00.000-08:00

Its' time for an Apple Calendar!

Earnings are due to be released on Jan 19 which is part of Feb expiration cycle. Volatility usually rises until the day of expiration and dropped dramatically after earnings announcement. Current Feb options have volatility of 36.9%, I expect it to increase to ~42%(or more) the day before earnings.

Since Apple is a big mover a double calendar works best for me. It allows price to move around while allowing time and volatility to work in my favor. From looking at the risk graph it may look like a bad trade with little to no chance for profit however vega is +27. Expected volatility picture shows the likely outcome with 5 points increase in volatility and one week before expiration. Picture shows $212 profit. Profit target for this trade is $150.
Adjustment points are at outer breakeven points at 189 and 212.

BTO AAPL Jan/Feb 190 Put
BTO AAPL Jan/Feb 210 Call
Total Debit $9.42

Original Trade

Expected result one week before expiration

Xmas Rally

2009-12-22T16:26:00.000-08:00

Christmas rally is currently in progress. Price action should return to normal after the New Year.

TOS Platform Easter Egg

2009-11-05T12:52:00.000-08:00

There is a nice Easter Egg hidden in the TOS platform. See if you find it yourself.

Hint: click on the red longer triangles in a counter-clockwise order.

RUT Bearish Divergence Trigger

2009-10-01T15:50:00.000-07:00

Momentum on the RUT closed today at 2.24. This is a trigger to go short. Target is $509.14 for the RUT. If you are long have a close stop.

RUT Bearish Divergence

2009-09-10T12:20:00.000-07:00

According to Jake Bernstein Momentum method, RUT has a setup for a short play. The trigger would be momentum to close below 11.61 at that point you can go short.
Since the setup is present in the RUT the market as is whole is also showing signs of reversal. However you need to wait for a trigger before going short. The current market can continue to go higher for sometime.

Tom Sosnoff Bearish Market Opinion

2009-08-24T17:12:00.000-07:00

Tom from Thinkorswim presented a few bearish trades last week at SF Moneyshow. He's a contrarian trader and expects a pullback before Sept expiration.
Below is a list of some of his trades.

OIH
6-9% lower
Sell Sept 110/115/95/90 IC $2.35

QQQQ
8% lower
Buy Sept 41/39 put $0.85

EEM
8% lower
Buy Sept/ Dec 33 put calendar $1.29

AAPL
7% lower
Buy 150/160/175 call butterfly $0.00

RIMM
2-4% lower
Buy 70/75/80 call butterfly $1.12

IBM Call Assignment

2009-08-12T23:33:00.000-07:00

I got called on my IBM 105 calls last week. It was part of my guerrilla calendar strategy that start back in June. IBM had moved steady over the past few weeks but I had collect some premium in July options so I didn't sweat too much on the strong bull run. I covered my short position immediately and was out for very small loss.
Lesson learned, need to adjust sooner once short options are ITM.

Earnings Cycle Calendars

2009-07-09T09:21:00.001-07:00

Last month I placed calendars on Apple and Autozone ahead of earnings to capture some IV increase however IV dropped immediately after placing the trade. This was do to the minor rally in the market that dropped IV. IV has slowly climbed higher in the last two weeks. If it keeps climbing I should get a nice ROI for the month.

RUT Iron Condor Hi Prob June Update #2

2009-06-20T21:32:00.000-07:00

RUT price has traded in a narrow range so I was able to let my last contract expire worthless. Overall this was a nice trade with little movement.

5/12 STO 3 RUT JUN 570/580 Call $0.80
5/12 STO 3 RUT JUN 410/400 Put $0.85
6/3 BTC 2 RUT JUN 570/580 Call $0.50
6/3 BTC 2 RUT JUN 410/400 Put $0.12
6/19 expire worthless 1 RUT JUN 570/580 Call
6/19 expire worthless 1 RUT JUN 410/400 Put

Total realized profit is $371
Total risk was $2505
14.8% ROI

Triple Calendar on SPY (Circus Calendar) Update #2

2009-06-17T06:46:00.000-07:00

SPY trade was great this month. Price has landed very close to the 91 strike.

5/19 BTO 4 SPY Jun/Jul 97 Call for $.70
5/19 BTO 4 SPY Jun/Jul 85 Put for $.94
5/19 BTO 4 SPY Jun/Jul 91 Put for $1.12
6/3 STC 2 SPY Jun/Jul 97 Call for $1.00
6/3 STC 2 SPY Jun/Jul 85 Put for $1.02
6/3 STC 2 SPY Jun/Jul 91 Put for $1.47
6/17 STC 2 SPY Jun/Jul 97 Call for $0.66
6/17 STC 2 SPY Jun/Jul 85 Put for $1.02
6/17 STC 2 SPY Jun/Jul 91 Put for $1.87

Total profit is $304 on $1104 risk for a nice 27.5% ROI

RUT Iron Condor Hi Prob June Update #1

2009-06-03T10:58:00.000-07:00

The likelihood of this IC reaching max profit is very high however this time to take some profits and not get too greedy. Original position was a 3 contract IC. Will remove 2 contracts today.

BTC 2 RUT JUN 570/580 Call $0.50
BTC 2 RUT JUN 410/400 Put $0.12

Total realized profit is $203.

Triple Calendar on SPY (Circus Calendar) Update #1

2009-06-03T10:43:00.000-07:00

SPY has stayed in a nice range for the last few weeks. Its time take some profits off the table. The original position was a 4 contract triple calendar. Will only close half the position to capture some profits. Will let the remain contracts earn some more time decay before closing.

STC 2 SPY Jun/Jul 97 Call for $1.00
STC 2 SPY Jun/Jul 85 Put for $1.02
STC 2 SPY Jun/Jul 91 Put for $1.47

Total realized profited so far is $146

Triple Calendar on SPY (Circus Calendar)

2009-05-19T22:14:00.000-07:00

Here is a calendar spread on SPY. Its a triple calendar (aka Cirus Calendar). By using a triple calendar I can get a wider breakeven while still maintaining a decent profit. One negative thing about calendars is that it is positive vega (implied volatility). So IV has to increase or stay the same to make money.

BTO 4 SPY Jun/Jul 97 Call for $.70
BTO 4 SPY Jun/Jul 85 Put for $.94
BTO 4 SPY Jun/Jul 91 Put for $1.12

Max loss is $1104
Current breakeven is $83.41-$98.16

First profit target is 12%.

RUT Iron Condor Hi Prob

2009-05-12T18:23:00.000-07:00

The market has retraced the last few days from it's incredible bullish run. Maybe it's time to place an Iron Condor for the June expiration.

STO 3 RUT JUN 570/580 Call $0.80
STO 3 RUT JUN 410/400 Put $0.85

Potential Profit = $495
Max Risk = $2505

Current delta of the short strikes are ~10. Once price reaches near ~20 its time to adjust. Also if at anytime the profit reaches $380 its time to take the profit.

Why I love Thinkorswim!

2009-05-12T15:43:00.000-07:00

I use the Thinkorswim (TOS) platform exclusively to trade options because it has the best tools to get the job done. The Analysis tab is the best part of the software which allows one to see a profit and loss graph in real time. It also has an awesome charting package that allows for custom indicators. It also recently introduced the backtrader module that is good for testing strategies.

I have also tried Optionvue in the past. It has a great backtrading module that is best around but I felt the yearly subscription fee was not worth the additional benefit.

For those that are interest, I'm conducting a free live demo of Thinkorswim software. I'll go over some tricks and tips on using the software. Contact me for info.

AZO Earnings Calendar

2009-04-29T20:32:00.000-07:00

Autozone (AZO) is due to have earnings on 5/26/09. Generally I like to have the earnings in the back month, in this case the June expiration cycle. With that in mind I placed a double calendar on 4/20 to hopefully capture some time decay.

4/20 BTO AZO May/Jun 170 CALL $4.45
4/20 BTO AZO May/Jun 155 CALL $4.15

4/29 STC AZO MAY/JUN 170 CALL $5.35
4/29 STC AZO MAY/JUN 155 CALL $4.40

Total profit = 9.75-8.60= $1.15
ROI = 13.37%

This trade worked out primarily from some good timing. IV in the front month dropped several points since I first placed the trade.

Dan Sheridan VIPES criteria

2009-04-19T21:23:00.000-07:00

Dan Sheridan follows the VIPES when placing a trade. They are as follow:

-Volatility – IV in the lower range for last 1-1½ years

-Industry – no energy, biotech or “wacko” industries

-Price – Look for too much speed/movement in the underlying. If yes to any below then wait!
o Last week more than a 5% move in 1 direction
o Last month more than a 10% move in 1 direction
o Last 3 months than a 15% move in 1 direction
o Last 9 months more than a 25-30% move in 1 direction

-Earnings – Do not put on in an earnings month unless it’s a stock with IV is low and the last 3 earnings periods had no gap over 3%.

-Skew – Negative Skew < 2% or NO TRADE
Positive Skew < 6% if above investigate why (earnings?)
If a 4-5 point skew develops after the trade take it off ASAP

SPY Bearish Divergence

2009-04-08T13:48:00.000-07:00

The bullish run finally looks like it's running out of steam. CCI is now showing a bearish divergence. It may be a great time to place bear call spreads.

SPY Bearish Diagonal Spread Update #2

2009-03-30T10:14:00.000-07:00

As a general rule of thumb for diagonals, I don't like to stay in a trade if if I experience more than 12% loss. Since the total risk was $1031 and P/L shows a $142 loss it was time to get out.

Here is a list of the transactions:
3/26 1 SPY 82 Apr/May Call $1.48 credit
3/26 3 SPY 78/81 Apr/May Call $0.53 debit
3/23 1 SPY 82 Apr/May Call $1.46 debit
3/20 3 SPY 78/81 Apr/May Call $0.05 credit

Total loss was $142.

I admit that 3/20 was not the best time to start the trade because there was no indication that bullish trend was reversing. Luckily I had other trades on that worked much better.

SPY Bearish Diagonal Spread Update #1

2009-03-23T22:29:00.000-07:00

I had to adjust the trade on Monday after the continued bullish movement. So I have added a 82 calendar to push the breakeven further away. If price continues to trend higher this week, I'll cry UNCLE and just get.

3/23 STO 1 SPY 82 Apr/May Call $1.46

Total max risk is $1031.

SPY Bearish Diagonal Spread

2009-03-20T07:52:00.000-07:00

SPY looks like it reached the top of the bullish run. Its time to place a neutral to bearish diagonal. If price settles below $78 on expiration there will be a minimum profit of $15 due to the credit. Potentially the trade can make up to ~$600 if the price settles at $78.

STO 3 SPY 78 April Call $3.70
BTO 3 SPY 81 May Call $3.65
Credit of $.05

Max risk is $885

Adjustment point will be when price reaches $79.5.

Bullish Divergence Update

2009-03-13T11:47:00.000-07:00

The CCI divergence came true. The major indexes have been going up for the last 3 days. It seems like the market can't handle this bullish trend without a minor pullback. The SPY is almost at the 30day SMA so that will be next likely target for a pullback.

Bullish Divergence?

2009-03-04T20:38:00.000-08:00

SPY is showing a bullish divergence on the CCI indicator. Could this mean that the market will move higher in the weeks to come. Maybe, I think we have reached a temporary bottom and head higher or channel for a few weeks before heading south once again.
The Russell and the Dow are both showing the same divergence. Only time will tell if this divergence is true.

The "3 Rules" for Consistent Monthly Return with Credit Spreads

2009-02-19T17:48:00.000-08:00

1. NEVER EVER do a credit spread when that stock has earnings during that option cycle.

2. NEVER EVER play FDA or other government agency announcements.

3. If a credit spread has an unusually high return for a little risk - DON'T TAKE IT, Trust me there IS a reason for the increased volatility... Someone somewhere knows something, Just move on to a more "normal" return trade.

Walmart Calendar

2009-02-18T15:59:00.000-08:00

Walmart is a great shopping alternative in the current economy. It should outperform other retailers in the coming months. So lets try a bullish calendar to capture some upward movement.

BTO 3 WMT Mar/Jun 57.5 Call for $.90

The plan is wait till March expiration to buy back the March short and then sell April and then hopefully the May.

AZO Earnings Calendar Exit

2009-02-07T19:57:00.000-08:00

Autozone has not stayed flat like I hoped. It has trended higher and ascending triangle has formed. I looked at making adjustments to the trade but it doesn't like I can get a favorable risk to reward. So its time to get out. One of the things that went wrong was the fast moving price action that didn't allow for time decay to work in my favor.

STC 2 AZO Feb/Mar 135 Call for $4.30
for a loss of $110 or 12.8%

IWM Iron Condor Result Followup

2009-02-07T19:53:00.000-08:00

WOW, IWM made a awesome rally this week. It's time to take the trade of the table so we can lock in on the profits.

2/6 BTC 2 Feb 39/37 put for $0.08
2/6 BTC 5 Feb 59/61 call spread credit $0.02
1/30 BTC 3 Feb 39/37 put for $0.20
1/7 STO 5 Feb 39/37 put spread credit $0.20
1/7 STO 5 Feb 59/61 call spread credit $0.21

Total profit was $119 on $795 risk for a ROI of 14.9%

IWM Iron Condor Result

2009-01-31T16:03:00.000-08:00

I'm worried that IWM can continue to move south so I have removed some of the risk on the put side. The call side does not look threatened so I just leave it there.

BTC 3 Feb 39/37 put for $0.20

With this adjust, I can let price move to $40 before I start losing money. Also, I placed a GTC order to buy back the remaining 2 contract for $0.10.

AZO Earnings Calendar

2009-01-27T08:33:00.000-08:00

Earnings on AutoZone is due out on March 3. Volatility will stay inflated or slightly trend higher the next few weeks, which is perfect for a calendar. My first profit target is 15% and I expect to be completely out of the short position by Feb 17. Breakeven is roughly $130 and $141. If price reaches these points, I will adjust the position.

BTO 2 AZO Feb/Mar 135 Call for $4.85

ALK followup trade

2009-01-16T19:30:00.000-08:00

Alaska Air hit my target projection of $30 twice! The first time was last week then price reversed. Today, it moved $1.78 to close at $29.78. Unfortunately for me, I was out of my calendar on Wednesday for a profit of $.44 on $1.43 risk. If I stayed in until today then my profit could have been $1.10. But a win is a win.
One thing I noticed is the earning is due out the last week of Jan which should have increased the Feb IV. However, IV has stayed very neutral this month. One of the reasons I choose this trade was using the IV increase as a way to profit on the trade.

AAPL Trade Results

2009-01-14T07:13:00.000-08:00

Apple did not turn out like I expected. The stock price began to move aggressively the first week of January. It actually touched my short strike and I was worried it might go further so I decide to close my put side (for a loss). The very next day, price retraced and never looked back. Overall, I still made a profit. But I would have made more if I kept the put side in place.

Trade log:
1/13 STC Jan/Feb 95/100 CALL $2.74
1/6 STC Jan/Feb 75/70 PUT $.90

12/30 BTO Jan/Feb 75/70 PUT $1.46
12/29 BTO Jan/Feb 95/100 CALL $1.65

Profit of $.53. Not too bad for a trade that went wrong.

IWM Iron Condor

2009-01-07T17:59:00.000-08:00

On Dec 31, placed a IWM iron condor.
STO 5 Feb 39/37 put spread credit $0.20
STO 5 Feb 59/61 call spread credit $0.21
Potential 25% return on risk

With todays down action it made the iron condor centered almost perfectly. Just now have to sit back and wait for time to diminish away.

Santa Claus Rally (late)

2009-01-01T23:08:00.000-08:00

Happy New Year!
Rally finally happened. One week late but still showed up at the party. The futures Thursday night indicate that the market will open lower. Its hard to tell if the market will continue the mini rally for January.

AAPL Earnings Double Diagonal

2008-12-30T07:56:00.001-08:00

It's earnings season for Apple once again. Normally the options volatility will increase in the option chain that coincides with the earnings date. Earnings is set to be released on Jan 22.
I decided to place a double diagonal to capture the increase in volatility. The chart looks like I will make only a few dollars at expiration but I have a 9 vega. Meaning that for every point increase in IV, I should see a $9 profit. I expect to see about ~10 point increase in IV by Jan expiration.

Trade
STO JAN 95 CALL
BTO FEB 100 CALL
$1.65

STO JAN 75 PUT
BTO FEB 70 PUT
$1.46

ALK ascending triangle

2008-12-27T09:38:00.000-08:00

ALK(Alaska Air) is showing ascending triangle. The stock has been forming a triangle for almost 2 months. It recent broke out of the triangle and heading upwards. I decided to place a bullish calender to capture any movement.

Placed Jan/Feb 30 Put calendar for $1.43. This trade is mostly speculative trade because it may never reach above $30. $27 was the upper band before the breakout. I may look to remove the trade once it reaches 25% profit.

OIH result

2008-12-24T09:33:00.000-08:00

OIH did not breakdown much but time decay did work in my favor. I was able to collect all the credit. 7.75% for a one month trade.

Options Trading Rules

2008-12-15T15:59:00.000-08:00

Here is a list of some rules to follow when getting started with options.

Rule 1
Get educated.
Options behavior differently then stock and have several factors that cause options price changes.

Rule 2
Open a brokerage account that can handle options.
Thinkorswim is best brokerage that specialize in options with risk and reward graph.

Rule 3
Use option simulator software
Optionvue is good but pricey software. Thinkorswim has a integrated simulator with each trading account.

Rule 4
Paper trade first.
This is the best way to learn with fake money before you put real money to work. Practice makes perfect.

Rule 5
Set your profit and loss target.
Have an idea of when to exit the trade is very important. Never get into a trade just to get in. Have a stop loss or adjustment plan ready at all times.

Rule 6
Trade small, trade often.
Don't put all your eggs in one basket. Keep each trade small and spread it around among different options/ strategies.

Rule 7
Understand a strategy inside and out.
Learn a strategy and dissect piece by piece to understand what factors go into making the strategy work. Only then will you know when and how to apply the strategy and make it generate a consistent return.

Nice Descending Triangle on OIH

2008-12-04T20:58:00.000-08:00

I saw a nice descending triangle forming on OIH and placed a bear call spread on the Nov 17.

STO DEC 115 Call
BTO DEC 120 Call
for $0.36 credit.
Projected ROI of 7.75%

I could have gone close to the money but I wanted it to have some wiggle room incase it trended upwards.

As it stands now, it going to expire worthless but I'll mostly likely close it for a few cent to free up some capital.

What a year!

2008-11-09T19:16:00.000-08:00

This year trading credit spreads has been really tough for any trader. Two years ago, the Dow hardly moved 400 points in one month. Now you see that kind of movement in one day. The short strike of any position easily is tested in matter days. With the volatile market I decided to use a low risk diagonal to hedge against any downside.

On 10/24 BTO 50/52 Nov/Dec Call Diagonal. Max risk was $7 on the downside and $207 on the upside. Right now its sitting pretty with less than two weeks to go.

TOS training

2008-06-19T11:24:00.000-07:00

I love the TOS platform. It's a must if you trade options. Plus its free with your account. Contact me if you want a free quick demo that will get you started and learn how powerful this platform can be.

Contact info:
aroyale15@yahoo.com

GS calendar 21% gain

2008-05-06T15:53:00.000-07:00

Closed out GS today after the stock as the stock began pulling back this morning. Had the 190 and 200 put calendar. Though its in the sweet spot now its better to get out before it makes a strong move.
The profit was not easy to get because the stock moved 20 points since I opened the trade.
Lessons learned: Be patient, roll with trend, take profits

Rocketship GS

2008-04-25T19:08:00.000-07:00

Goldmansach has shot up quite a bit this week. It was around 180 earlier this week and then now its 192. From a candlestick aspect an anbandoned baby pattern is starting to form. Meaning that if mondays price gaps lower and stay lower its a bearish situtation. However if it continues to trend higher than I will need to adjust my position inorder to stay with this earning play. So far i'm down $94 on a $950 risk.

Existing postition

With 195 put calendar if price continues to rise

GS earnings calendar

2008-04-21T22:42:00.000-07:00

Goldmansachs is having earnings June 2. So it a good candidate for a calendar spread. The June 2 earnings event will increase the June contracts while allowing the May contracts to decay quickly.

BTO May/June 180 Put for $4.55
Risk to reward will be 1:1
Breakeven are $170 and $191

Volatility

2008-04-19T11:15:00.000-07:00

Volatility is a prediction that a stock will likely more. A high IV will mean that stocks has high probability that it will move one direction or another.

Debt spreads generally do better with increasing volatility.
Credit spreads generally do better with decreasing volatility.

Examples of debit spread
bull call spread
bear put spread
long call
long put
calendars

Examples of credit spread
bear call spread
bull put spread
short call
short put

AAPL double calendar earnings play

2008-04-17T12:58:00.000-07:00

On 3/25/08
BTO April/May 130 put calendar for $3.29
BTO April/May 160 call calendar for $3.12

Earnings was going to be released 4/23/08 so that meant the IV would increase and stay higher than the front month. IV for front was 46% and back month 51%. This a negative skew of 5%, not really good for a time spread but I knew that IV would increase in the back month so I didn't care about the front month.

Exit on 4/15/08
STC April/May 130 put calendar for $3.09
STC April/May 160 call calendar for $4.66

IV for front month is 45% and back month 56%. Nice profit of $1.34 or 21% return in 20 days. Not bad. I noticed at if I exited today, I could have got a 24.5% return. The current price of $157 is very close to the 160 peak.

I really like this double calendar strategies on stocks that are about to have earnings. Watch out for other trades similar to this in upcoming postings.

Componets of any trade

2008-04-12T14:57:00.000-07:00

There are three things that make up all options trades
1. Price (delta)
2. Time (theta)
3. Volatility (vega)

Most of the time price is hard to control so you must rely on time and volatility.
Time is just selling premium. To generate a monthly income you need to sell premium and let time decay work in your favor.
Volatility is select strategies that will capitalize the change in volatility. Calendars are great for options that will increase in IV such as earnings and when IV is near the low of historical IV. When IV is higher than normal than using credit spreads will benefit the most.

What a day!

2008-03-11T23:19:00.000-07:00

Today's massive move helps the market recover after several days of down movement. It always seems that Mr Fed is late to the event. This should have been done long ago when all the banks were reporting massive writedowns.

It's been a while since i updated this blog. I plan to be more active in reporting my option trades. So far, I gotten better at risk management. By far my weakest link. Option trading is all about risk management. Second is time decay.

Iron Condor Result

2007-07-20T17:54:00.000-07:00

On Wed, the IWM Iron Condor was closed for a total profit of $0.75.
Sell July IWM 87 call for 0.01
Buy July IWM 85 call for 0.1895
Sell July IWM 79 put for 0.03
Buy July IWM 81 put for 0.089
Total credit =$0.75
I risked $2 to make $0.75 or a 37.5% return for the trade. This trade was only held for less than one month. Not bad for one month return.

IWM Iron Condor

2007-07-17T23:45:00.000-07:00

On June 19, I started a short iron condor on IWM.
Buy July IWM 87 call for 0.46
Sell July IWM 85 call for 1.13
Buy July IWM 79 put for 0.51
Sell July IWM 81 put for 0.83
Total credit =0.99

As of today,
87 call is worth 0.045
85 call is worth 0.405
79 put is worth 0.03
81 out is worth 0.055
It looks like I need to close out the 85 call soon or face expiration in the money.

More to come after expiration friday.

Magic of Compounding!!!!

2007-07-03T00:37:00.000-07:00

Compounding is wonderful. A 10% return/ month will increase to a sizeable amount after 2 years.
10%/month annualized is 285% return! I like that kind of return.

Here is a example of 10%/ month compounded monthly.

Time	Amount
Month 1	$10,000
Month 2	$11,000
Month 3	$12,100
Month 4	$13,310
Month 5	$14,641
Month 6	$16,105
Month 7	$17,716
Month 8	$19,487
Month 9	$21,436
Month 10	$23,579
Month 11	$25,937
Month 12	$28,531
Month 13	$31,384
Month 14	$34,523
Month 15	$37,975
Month 16	$41,772
Month 17	$45,950
Month 18	$50,545
Month 19	$55,599
Month 20	$61,159
Month 21	$67,275
Month 22	$74,002
Month 23	$81,403
Month 24	$89,543

Factors I look at

2006-03-26T11:47:00.000-08:00

I use a mix of Techanical and Fundamentals to pick a good stock. Below is an explaination of some of the factors I use.

MACD - a chart that represents 3 moving average curves. Great to show how the stock price has moved in the past few days. It uses Exponential Moving Average, in simple terms an average of the closeing price. Usally calculation based on 26,12,9 days moving average. A bullish crossover occurs when MACD moves above its 9-day EMA and a bearish crossover occurs when MACD moves below its 9-day EMA.

Stochastics -factors in the price trading range for the day. In general, if the stock end near the high of the trading range, indicates a bullish trade day. Bearish for the opposite.

RSI -Relative Strength Index based on the number of up and down closing. RSI of 30 indicates an oversold or undervalued price. RSI of 70 indicates overvalued, maybe a time to sell.

I never really buy a stock based on use one techincal indicator. 2 of of 3 need to bullish or a buy signal before I buy a stock.

Growth Rate- compounded annualized rate of growth of a company's revenues. I prefer 15% growth

PE- Price divided by Earnings per Share. I like stocks with 25 or less. In some cases a high PE is good if I only plan to invest short term

debt:cash ratio- A high ratio means that they have too much debt and is leveraging to much money to finance operations.