If you are an options trader there are plenty of ways to hedge your bets. You gotta learn to trade the one way markets (or sit them out). I am assuming you are sitting on neg delta with a nice juicy T+0 line below the market. Your P&L graph probably is a work of art if we would just come down. You have to accept what the market is doing and trade accordingly, even if it means giving up some of that beautiful imaginary profit sitting below the market. What is your plan if the unthinkable happens and we shoot up 2-3ATR tomorrow (short squeeze, surprise news, etc.)? Go buy some futures, options, call backspreads, stock, etc. , you never know for sure what tomorrow will bring.
Yea, you're probably right. I guess crying isn't an acceptable hedge strategy, so I guess I'll have to reduce some of my delta otherwise. Bought a couple futures and will get a couple more tomorrow morning. Just hate to lock it in.
One thing I GUESS is when going through a losing patch is self-esteem get hit and the weight issue MIGHT just be a way ( unconscious unhealthy way) of dealing with some issues. First, you have to understand that I am a big advocate of "consulting" a psy, if not as many one can afford or put their hands on. Add to this personal positive experiences for things like www.dhamma.org and you can understand that I believe that all starts in the mind. Just now, MAY be it is best for you to reduce trading size, cut risks to as low as you can. And book yourself for some www.dhamma.org and start "consulting", all the while trading in the most conservative way as you know of. And may be join a gym as well. The thing about trading : you can't seat on your laurels.
I know exactly where you are coming from. A lot of my trades have sold options below the market and I am often seeing my neg delta build up when we have moves up. I think it is harder with the grind up, at least with the sharp down moves it happens fast and you don't have much time to think. These moves up are so slow it gives you too much time to stare at your T+0 line and fantasize about all that money raining down if it would just pull back! Of course as soon as you adjust, you get the pullback after you have already adjusted so what was once a huge gain is now a small profit or worse breakeven.
Just my two cents (Im no expert) but I don't understand why trade 2k trades a year without real conviction? To me I want to be able to say Target is a good company, or (as they did in "The Big Short" these Asset Backed Securities are crap, or as some have said on this thread "I know a trend when I see one" and Im riding it until it breaks down. I mean the Vix is probably mean reverting, but Jeremy Siegel's book Stocks for the Long Run, would generally say Stocks are not mean reverting. I really hesitate to give advice because I don't know what Im doing, (and I believe 80% of the people on here don't) so these are just some thoughts.
Couple of reasons on the 2k trades. One is that it makes justifying trader tax status easier. The IRS is mostly worried about the nbr. of trades, not really the size of each one (at least based on what my accountant says). The more important one is that for the automated trades it's easier to validate the system edge. If you flip a coin 100 times vs. 2000 times you're supposed to get a better indication if the coin flip is fair. Same with the trading system, if you only have 100 trades is may show better or worse performance but the law of large nbrs will eventually win. As far as conviction goes, this is hard to quantify. Every bet/trade that I make has conviction, but then again so does every blackjack bet in Vegas though. I think that's one of the areas that separates trading from poker, you'll never know if you have the nuts and you're 100% right. As far as being short the market, there's 100 reasons that support that MY conviction (from the % run up the last 3 years which is out of the norm to the ratio between interest rates and the S&P (if you chart them they never reached this territory before) to the unemployment rate/market level ratio ) but at the end none of them matters if we keep making new highs every day, so that's more of a philosophical discussion.
No one is suggesting you should be psychic or even try to buy the low tick or sell the high. But with such an obvious and powerful bull market why be short? No matter what the strategy you needed, at some point, to realize this bull market was for real.