So this week I put on a 5 day calendar trade on SPX. I got out 2 days before expiration because the market threatened one side of the position. Cost of trade: 2.9K. Resulting profit at get out: .54K (after commissions)
I keep doing this. Because I fear taking ANY loss whatsoever I get out at a low or high and the market reverses and everything is fine. Day of expiration today...strike was 2180 and spx is 2181...could have made 4K!!! Would have made my profit target for the month 2 weeks early. Now I'm in a pinch. I need to be willing to take some sort of loss. Otherwise I can't make the big bucks...can't make my profit targets, and will continue to be mediocre. After all what's the real risk: That the maximum value of the trade will be lost if MKT makes a massive move. Not letting trade run to get to real profits is playing with fire it seems. Sooner or later massive move will happen!
STOP BEING A CHICKEN DUDE. Be willing to take a 25% LOSS. Set limit orders to take the loss automatically. Your human judgement and fears just get in the way!!!
This has happened far too frequently. Because of not willing to lose I've missed out on tens of thousands of dollars in NET potential gains. I just have to recognize that this fear is irrational and suck it up, trade with what history tells me.
From Now On. Limited Maximum risk, Non-interventionalist weekly strategies automatically closed out for a loss if it gets to that point. Good luck!
Friday, August 12, 2016
Thursday, August 4, 2016
On to Phase 3!
Phase 1: 2.5K loss. End of phase 1 came when I decided I wasn't making money and I had had enough. I decided to do paper trading only until I was making money...or something.
Phase 2: With the market in the Toilet following Britain's unexpected pullout from the EU, I placed my first big trade using my entire trading account and then some long an inverse volatility ETN. I made 4.4K. I then went on to trade options on SPX, netting another 3K or so. Phase 2 lasted a month and a half.
Phase 3: I've been hitting the books, blogs, etc. and paper trading earnings trades (so glad I paper traded these!!! Not working ATM. That's what paper trading is for. Building confidence and tweaking strategies before doing it for real. Maybe even optimizing alongside what is working. Now reading Keene's 2013 book on options trading. Stoked, although I must remember to stick to my own principles. I myself have experienced what happens when you allow your methodologies to become hopelessly clouded by others' ideas and opinions...things stop working. In fact, this greatly contributed to my 2.5 K loss and subsequent pullout, when a 1.4K profit (if I remember) turned into a 1.1K loss...due to this very thing.
Still approved to trade SPX and volatility as opportunity arises. SPX has been in a slight bit of turmoil recently so I have stayed out. Hoping tomorrow will shine some light on direction and so I can get those 2 free days of weekend decay.
But phase 3 is where I go pro for real. Learning all sorts of trading knowledge and strategies...so that I can pick the most promising that appear to work for me.
Stoked!
P.S. I just got the notification from yahoo finance that "Wall Street flat ahead of Friday's Jobs Report"...Yeah...something like that. Good to wait till tomorrow to trade :) Need to start paying more attention to the events that will be going on. Should start watching the entertaining news from guerrilla stock trading .com
Phase 2: With the market in the Toilet following Britain's unexpected pullout from the EU, I placed my first big trade using my entire trading account and then some long an inverse volatility ETN. I made 4.4K. I then went on to trade options on SPX, netting another 3K or so. Phase 2 lasted a month and a half.
Phase 3: I've been hitting the books, blogs, etc. and paper trading earnings trades (so glad I paper traded these!!! Not working ATM. That's what paper trading is for. Building confidence and tweaking strategies before doing it for real. Maybe even optimizing alongside what is working. Now reading Keene's 2013 book on options trading. Stoked, although I must remember to stick to my own principles. I myself have experienced what happens when you allow your methodologies to become hopelessly clouded by others' ideas and opinions...things stop working. In fact, this greatly contributed to my 2.5 K loss and subsequent pullout, when a 1.4K profit (if I remember) turned into a 1.1K loss...due to this very thing.
Still approved to trade SPX and volatility as opportunity arises. SPX has been in a slight bit of turmoil recently so I have stayed out. Hoping tomorrow will shine some light on direction and so I can get those 2 free days of weekend decay.
But phase 3 is where I go pro for real. Learning all sorts of trading knowledge and strategies...so that I can pick the most promising that appear to work for me.
Stoked!
P.S. I just got the notification from yahoo finance that "Wall Street flat ahead of Friday's Jobs Report"...Yeah...something like that. Good to wait till tomorrow to trade :) Need to start paying more attention to the events that will be going on. Should start watching the entertaining news from guerrilla stock trading .com
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