Trade Contest Winner

Over the weekend I ran a contest with the best overall trade idea receiving a signed copy of my book. The details of the contest are here

Congratulations go to Cindy Vu of Washington (the state) as the winner! Here was her submission. Simple and straight forward. Analysis, idea, risk management and alternative views.

Hi Greg,
Gonna take a shot at winning your book.

1. Daily time frame
2. breached major support Friday but managed to retest that support.
If DBC fails to hold 24.62, below 24.51 will take it down to 24.26, followed by 24.11.
If DBC can bounce up to 24.71 and hold over 15mins, most likely will try back to retest the GAP at 24.88 with a GAP fill at 24.98.

Options are too thin and wide to trade in this name so I would stick with the stock. However, for a cheap risk on this trade if you are bullish and we can manage to get a bounce, Oct 26 calls currently has no bids but u can get for .05c. Risk only money you are willing to lose as this is OTM. I would bet no more than $300. If a bounce does materialize and we fill the GAP, my option can turn into at least 100% return.

Currently the volume to the downside seems to be tapering so I would not like to short unless it was for a daytrade as shorts can be quick, like elephants pooping. A long could be few days trade and can stairstep levels that I have as areas that it may have problems.

LONG: over 24.71 with stop at 24.60. Target to GAP fill then stair step levels marked.
SHORT if lose 24.51 with stop at 24.72. Target 24.11

Here is my levels:

cindy vu

I hope I win. 🙂

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.

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