12-12-10 Trade Update

Hi All!

The RUT has been on a tear all month and I finally decided that enough is enough and closed out of all three December trades late Friday morning. The trades all took losses this month but they were all acceptable losses and well within our risk management parameters, so I feel good about how the trades were handled. The results were as follows:

December 55 Day: -$2056 on our planned capitol of $10,000 for a loss of  20.5%

December Method 1: -$478 on our planned capitol of $4,000 for a loss of  11.9%

December Method 15: -$2556 on our planned capitol of $14,000 for a loss of 18.3%

December was a bad month for income trades on RUT but all in all it has been a very good year. You need to remember that not all months are winners. This is why you must stick with your risk management plan and pull the plug on your trades when the market does not cooperate! If you won this month, great, awesome job! But if you lost, as long as you stayed within your loss parameters, you did a great job also so give yourself a pat on the back. If you drastically exceeded your loss parameters, you need to work on your discipline to avoid catastrophic losses. I’ll update the results spreadsheet and get the year end numbers posted in the next few days.

In January I plan to change things up a little and follow a few of the other trades I sometimes do. I’ll be replacing the method 1 RUT butterfly with a new experimental SPX butterfly we can call the Method 17 and replacing the Method 15 RUT butterfly with another SPX butterfly that one of my friends does. He calls it the “heart friendly” butterfly. I will still be doing those other RUT trades but want to experiment with the other ones so that we can diversify and play on a different index.

As for the January 55 Day Butter, it is unchanged from the last update but I will be adjusting it tomorrow or Tuesday.

That’s it for now. Happy Trading!!