Philstockworld Top Trade Review – August

What a crazy summer it’s been already!

Our Top Trade Alerts have been such a popular new product that we’re already rolling out a spin-off that will focus on shorter-term trades.  And no wonder, as 27 of our first 35 trade ideas (77%) have been winners so far and 4 of our 9 losers have been Lumber Liquidators (LL) – and I still think they’ll turn around… really I do.  

Of course the misses (and the wins) are arbitrary as I generally do a review at the beginning of the month for trades that are about 2 months old (today we’re looking at June’s Top Trades) – it’s very much up to you to take those winners off the table and cut the losers, we don’t micro-manage Top Trades but our Premium Membership does offer a daily chat room where we discuss trade ideas every day Top Trade Members are allowed to upgrade (it’s closed to new subscribers at the moment).  

On of our 3 losers last month was a TWC spread (5 2017 $155/175 bull call spreads with short $155 puts at net $3,500), which was down $500 at the time but it’s now back to $3,500 and well on track for our full $6,500 potential gain (+185% on cash) with TWC at $190.  That trade is in our Long-Term Portfolio, where we know better than to fret over short-term fluctuation and simply concentrate on whether our trade ideas are on or off track for their targets. 

As our PSW Members know, many times those “disappointing trades” make for the best entry as, like TWC, they are simply getting off to a slow start.  However, sometimes trades start off really well but then turn sour.  That’s why it’s important to have a trading plan for each position.  In the case of TWC, we expect to get $20 back on our $7 spread in 18 months so we EXPECT to be gaining $13/18 = 0.72 x 500 (5 contracts) = $360 per month.  

Understanding how much a trade is SUPPOSED to make each month lets us know if it’s…

Provided courtesy of Phil’s Stock World.