Performance Report

By: Patrice Johnson | Sun, Oct 5, 2008
Print Email

10/5/2008 6:55:56 PM

Greetings, J.E.D.I.

Welcome to The J.E.D.I. Way.

If you are receiving these alerts on a free trial, you have access to all of our previous articles and recommendations by clicking here: http://www.stockbarometer.com/articles.aspx?subscriptionid=20

If you do not recall your username and/or password, please email us at customersupport@stockbarometer.com.

If you are interested in continuing to receive our advice following your free trial, please click the following link to subscribe: http://www.stockbarometer.com/pagesJEDI/learnmore.aspx

Below is the Performance Chart for The J.E.D.I. Way for the period of February 2008 to September 2008.

The J.E.D.I. Way Trading Newsletter Service began in February 2008.

The J.E.D.I. Way trades various stocks, options on stocks, and options on various futures.

EXPLANATION OF MONTHLY PERFORMANCE

FEBRUARY 2008

STRADDLED OPTIONS ON THE APRIL 2008 30 DAY FEDERAL FUNDS FUTURES

In February 2008, The J.E.D.I. Way Newsletter's first trade was on the options on the April 2008 30 Day Federal Funds. Specifically, The J.E.D.I. Way Newsletter conducted a straddle on the April 2008 30 Day Federal Funds - bought one call position and one put position. The premise was that this market would move up or down sharply and that The J.E.D.I. Way would be able to derive a gain from both positions at different times. However, the put option expired on March 17, 2008 for a loss of $125.00 and the call option was offset for a gain of $625.00 making the total dollar gain in February 2008 of $500.00 before commissions. Thus the green up bar on the Performance Chart for February 2008. (above)

MARCH 2008

STRADDLED OPTIONS ON THE MARCH 2008 30 DAY FEDERAL FUNDS FUTURES

STRADDLED OPTIONS ON THE NASDAQ OMX GROUP INC. (NASDAQ GS)

STRADDLED OPTIONS ON THE DOW DIAMONDS ETF (AMEX)

STRADDLED OPTIONS ON THE DOW JONES MINI-SIZED DOW $5 FUTURES INDEX (CBOT)

In March 2008, The J.E.D.I. Way Newsletter conducted four more straddles. However, these straddles did not yield the same results as the one in Febraury 2008 because the overall market did not move up or down significantly as The J.E.D.I. Way expected it would for the month of March 2008. This generated the long red bar on the Performance Chart (above) as the straddle on the March 2008 30 Day Federal Funds generated a loss of $583.38, while the straddle on NDAQ (Nasdaq GS) generated a loss of $92.00 and the straddle on the Dow Diamonds ETF (DIA) generated a loss of $108.00. And the straddle on the Dow Jones Mini-Sized Dow $5 Index (CBOT) generated a loss of $887.60. The total loss for the month of March totaled $1670.98 before commissions. This loss before commissions was reduced somewhat by the gain of $500.00 derived in the February 2008 trade resulting in total overall loss of $1170.98 for the period of February 2008 to March 2008.

APRIL 2008

OPTION ON THE MAY 2008 30 DAY FEDERAL FUNDS FUTURES

OPTION ON THE JUNE 2008 U.S. DOLLAR INDEX FUTURES

In April 2008, The J.E.D.I. Way Newsletter traded one option on the 30 Day Federal Funds Futures and one option on the U.S. Dollar Index Futures. Specifically, The J.E.D.I. Way Newsletter went long one May 2008 30 Day Federal Funds Put Option and went long one June 2008 U.S. Dollar Index Call Option. Once again, due to the lack of volatility in the market place for these indices (as the market was in the midst of forming bases - mostly bearish symmetrical triangle continuation patterns), both options expired worthless effectuating a loss of $846.65 for the month of April 2008. Thus the short red bar on the Performance Chart for (April 2008). The total loss for the period of February 2008 to April 2008 is $2017.63.

MAY 2008

TOOK TIME TO REFLECT ON TRADES FOR THE J.E.D.I. WAY'S FIRST QUARTER ENDING APRIL 2008

In the month of May 2008, no trades were placed. This particular month was used to reflect on The J.E.D.I. Way's trades in February 2008, March 2008, and April 2008. Thus the blank bar on the Performance Chart (above) for the month of May 2008. I thought it was important to pause a bit for my readers and rather than use this month to present trades, figure out how I can serve my subscribers better in the future. For the month of May 2008, subscribers received "Trade SetUps" in the place of "Entry Alerts" for various stocks, options on stocks, and options on futures for the month of May 2008. Trade Setups provide the criteria or set of conditions to take into consideration before placing a trade on a stock, option, or option on future while Entry Alerts suggest the price at which one may wish to be filled on a particular stock, option on stock or option on future.

After reviewing The J.E.D.I. Way's trades for the First Quarter Ending April 2008, The J.E.D.I. Way decided upon the following:

(1) Trade the Major Trend of the Market, not the Intermediate or the minor trend. (Major Trend is defined as a period of greater than one year, Intermediate Trends is defined as a period of less than one year but greater than 3 weeks, and the minor trend is defined a period of less than 3 weeks.) It is the major trend of the market that is most important to trade.

(2) Cut Losses Short. Place a stop or stop limit orders behind each option trade that is filled as opposed to letting the option expire worthless and causing the loss of the entire premium.

(3) Let Profits Run. Raise stop or stop limit orders when the premium prices rise on the option.

(4) Diversification. Short when the major trend is down; Buy when the major trend is up. Get comfortable shorting in a bear market and going long in a bull market. Go with the flow!

JUNE 2008

SOLD OPTION ON THE DOW JONES MINI-SIZED DOW $5 INDEX FUTURES

SOLD OPTION ON THE NASDAQ 100 MINI INDEX FUTURES

SOLD OPTION ON THE DOW DIAMONDS ETF (AMEX)

In June 2008, The J.E.D.I. Way realized a one month gain of $1495.00 reducing our total loss for the first quarter ending April 2008 from $2017.63 to $522.63. Thus the long green bar on the Performance Chart for the month of June 2008. How was this achieved? (1) The J.E.D.I. Way decided upon trading the Major Trend of the market verses the intermediate or minor trend of the market because this is the only trend that is relevant in trading ,(2) The J.E.D.I. Way learned to cut losses short (by placing stop or stop limit orders behind each trade) effectuating a automatic dumping or closing of the position prior to expiration if the option does not perform as expected (3) The J.E.D.I. Way let profits run (The J.E.D.I. Way raised stop or stop limit price points when the premium on the option rose and offset the postion after a certain gain was realized before expiration), and (4) Diversification. (The J.E.D.I. Way diversified its trading strategy to including shorting the options, not just buying them)

In June 2008, The J.E.D.I. Way sold short two call options on the September 2008 Mini-Sized Dow Index Futures and realized a gain of $870.00 and $245.00 respectively, sold short one call option on the September 2008 Nasdaq 100 Mini Index Futures and realized a a gain of $625.00, sold short one put option on the September 2008 Nasdaq 100 Mini Index Futures and realized a loss of $185.00, sold short one option on the December 2008 Dow Diamonds ETF (AMEX: DIA) and realized a loss of $60.00.

JULY 2008

OPTIONS ON DOW JONES MINI-SIZED DOW INDEX

In July 2008, The J.E.D.I. Way sold two call options on the September 2008 Mini-Sized Dow $5 Index Futures and realized a loss of $135.00 and a gain of $60.00 respectively for a loss of $75.00 for the month of July 2008. Thus the small red bar on the Peformance Chart (above) for the month of July.

AUGUST 2008

NO GAINS OR LOSSES WAS INCURRED FOR THE MONTH OF AUGUST 2008

In, August 2008, no gain or loss was incurred for the month of August 2008. Thus the blank bar on the Performance Chart (above) for the month of August 2008.

SEPTEMBER 2008

SOLD OPTION ON THE SEPTEMBER DOW JONES MINI-SIZED DOW $5 INDEX FUTURES

STRADDLED OPTIONS ON THE SEPTEMBER 2008 30 DAY FED FUNDS FUTURES

BOUGHT 10 SHARES OF PROSHARES ULTRA SHORT STOCK, TICKER SYMBOL "SIJ"

In September 2008, The J.E.D.I. Way realized a one month gain of $1722.56. The J.E.D.I. Way's account value is $6,199.93 for the month ending September 30, 2008. That is Up 24% since The J.E.D.I. Way Newsletter began in February 2008 with an initial trading stake/investment of $5000.00.

In September 2008, The J.E.D.I. Way sold short one (1) September 2008 Dow Jones Mini-Sized Dow $5 Index Futures and realized a gain of $945.00. The J.E.D.I. Way also straddled options on the September 2008 30 Day Fed Funds Futures - that is The J.E.D.I. Way bought one September 2008 call option and one September 2008 put option on the 30 Day Fed Funds and realized a gain of $604.66. The J.E.D.I. Way also bought 10 shares of Proshares Ultra Short Stock - ticker symbol "SIJ" and realized a gain of $172.90. Thus the long green bar on the Performance Chart (above) for the month of September 2008.

Conclusion:

The J.E.D.I. Way's come back was the result of the implementation of the following rules below:

(1) Trading the Major Trend of the Market, not the Intermediate or the minor trend. (Major Trend is defined as a period of greater than one year, Intermediate Trends is defined as a period of less than one year but greater than 3 weeks, and the minor trend is defined a period of less than 3 weeks.) It is the major trend of the market that is most important to trade.

(2) Cutting Losses Short. Place a stop or stop limit orders behind each option trade that is filled as opposed to letting the option expire worthless and causing the loss of the entire premium.

(3) Letting Profits Run. Raise stop or stop limit orders when the premium prices rise on the option.

(4) Diversification. Short when the major trend is down; Buy when the major trend is up. Get comfortable shorting in a bear market and going long in a bull market. Go with the flow!

Until next time. May the force of volatility be with you.

Best Regards,

 


 

Patrice Johnson

Author: Patrice Johnson

Patrice V. Johnson
The J.E.D.I Way

Patrice V. Johnson

DISCLAIMER:
The information contained in this report and future reports and newsletters contain independent analyses, statements, opinions, beliefs, and strategies that are mine and not those of the company and is made available to anyone interested in my analyses, statements, opinions, beliefs, and strategies made on stocks, options, futures, or options on futures. Information, analyses, statements, options, beliefs, and strategies in this e-mail are for informational purposes only. I do not represent that the information, analyses, statements, opinions, beliefs, and strategies contained in this report or future reports and newsletters are accurate or complete. Internet subscribers and online readers should not rely upon this information for any purpose without seeking the expertise of a professional investment advisor, professional tax consultant and/or broker. The information contained in this report and future reports and newsletters is provided only as general information that may or may not reflect the most current developments; accordingly, information, analyses, statements, opinions, beliefs, and strategies contained in this report and future reports and newsletters is not promised or guaranteed to be correct or complete. The analyses, statements, information, opinions, beliefs, and strategies contained in this report is not a recommendation to buy, sell, or hold any stock, option, future, or option on future. Nor are the statements, analysis, information, opinions, beliefs, and strategies contained in this report or in future reports and newsletters an offer for any stock, option, future, or option on future or solicit the offer of any stock, option, future, or option on future of any company. I will trade securities of the companies on which I report during the term of engagement. Patrice V. Johnson, expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this report, and future reports, and newsletters. I assume no responsibility for your trading and investment results. You assume all responsibility for your trading and investment results. You may send me e-mail to Patrice@Stockbarometer.com . However, you should not send confidential or sensitive information via e-mail as the security of the Internet e-mail is uncertain. By sending sensitive or confidential e-mail messages that are not encrypted, you accept the risk of such uncertainty and possible lack of confidentiality over the Internet. I do not necessarily endorse, and is not responsible for, any third-party content that may be accessed through this report, and future reports, and newsletters.

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2008-2010 Patrice V. Johnson

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com