Closing the First Trade

I've decided to liquidate the trade based on a few reasons. The first is that I could have sold it on Wednesday and instead opted to hold through Thursday. The price only increased another 30 cents above Wednesday's high, so considering the risk of holding overnight it was a suboptimal risk to reward ratio. On top of that, I don't want to hold over the weekend either.

Secondly, tomorrow (Friday May 4th) is the US non-farm payrolls and unemployment rate release at 8:30 am. These are usually strong enough on their own to change the market direction in an instant. I figured these two scenarios that could happen and how I would respond:

(a) The job report is currently forecasted at 145,000 and the market expects 165,000. In in other words, it is already priced in by the market and the forecasters gave out a small number so that when they release anything above 145,000 but less than 165,000 it will still be used to rally the markets and attract new money, even though in retrospect it wasn't anything spectacular.

(b) Job report numbers, are in my opinion, the most easily manipulated and misleading government statistic available since they always seem to be really good when the market is on a down trend and neutral otherwise. Could be just a coincidence, but money talks and it says to me not to gamble on these reports. If they turn out to be good, I'm going to jump on TNA (the opposite of TZA) with half the capital and scalp it out and be done by noon.

(c) If they are indeed bad, we'll sell off hard into close and with the weekend coming up, it will add more fuel to the fire since people will be more hesitant to hold over the weekend when the entire week has been weak. Then I'll just reload my previous position but with half as many shares.

Trade Debriefing

Fortune has been smiling upon me this week. I got a good entry going all in (which I don't normally do) and price rose quickly. Not to get ahead of myself since one could argue I just lucked out and did no better than guessing the flip on a coin, but to put the returns in a bit more perspective:

• At my summer job last year, I worked 8 hours a day (40 in a week) for $18 an hour for a total of $675 a week
• Dividing this weeks' returns by the same amount of hours comes up to $27.65 an hour. That's a middle manager pay or a top of his class, fresh out of university, petroleum engineering grad (harhar)
• Now consider that I bought on Tuesday and sold on Thursday, so I only worked two days or 19.5 total trading hours. During this time, I slept in on Tuesday, played Xbox during slow trading sessions (since there is no activity) and cracked a few eggs for lunch. The only downside was the lack of air conditioning and office gossip.
• One thing that hasn't changed is taxes - they'll take my income tax bracket times half the total profits. In this case, the government takes about $165 give or take (preferably more take than give). That's all fine and dandy, since I'm no more than a middle man, hustling money from one group of crooks and giving it to an even bigger one. 

Now, why am I saying all this? Well because I believe that it should be theoretically possible to repeat this scenario multiple times. The same way people can lose thousands of dollars and their deplete their retirement funds on the stock market, there must be a way to do just the opposite. For now, only time will tell if I am correct in believing this, but with due diligence and tilting the odds in my favour as much as possible, it should be doable. I'll recap to this post 3 months from now to see how far we've come.