This journal will document the trading performance of a mostly options oriented strategy utilizing multiple time frames. There will usually be a net directional exposure based on the longest time frame, utilizing daily charts and "trend" analysis. Net delta exposure will be adjusted on the 30 minute and 5 minute chart using a reversion to mean strategy through buying additional bull spreads and buying and selling of index puts according to +/- "X" ATRs from "mean". I will look to buy bull spreads on active stocks I believe will outperform and adjust exposure by buying and selling index puts. Initial exposure may be partially hedged either through the underlying or index puts. Initial and any subsequent positions will be closed according to theta earning considerations and underlying "trend" indicators. In Q4, 2024, this trading methodology returned +11.43% compared to SP500's return of +2.15%. The largest up day was +7.68% while the largest down day was -4.10%, in spite of relatively low capital utilization. My goal is to better control net exposure to avoid down days in excess of 3.00%. In the prior 3 quarters, this account was only slightly above breakeven, but did not use current methodology. Overall, this account underperformed the SP500 in 2024. I will start this journal on Monday with an allocation of $10,000. The title of this thread is based upon the "Official" version of a song I found on YouTube by BrooklynFunkEssentials.
Self discipline. The reason why I was profitable short term trading in 2024 versus prior years was improved self discipline. I tended to trade at irregular times more when I felt like it rather than a profession with regular work hours. Often allowed personal bias to overrule objective evidence when making trade decisions in spite of having a very well defined trading plan. Going forward, being less detached on particular trade outcomes will help maintain focus on methodology especially as other sources of potential profits are utilized, such as theta.
Account up 1.78% on Friday, mostly due to a vertical bull spread in NVDA. Had 28 trades, most were profitable, with largest winner exceeding largest loss by 3:1. Dedicated account for this journal has now been allocated $10,000. First trades will be on Monday. By rule, with the major indexes exceeding their previous day's highs, I expect to have net long exposure by the close of trading on Monday. I will be adding the 1 minute chart to facilitate partial hedging on a scalping time frame. As my perception of event risk is high and implied volatility seems relatively low for perceived trading environment, I will be looking to manage my overall exposure using index puts, rather than short future indexes. Adjusted for beta, Nasdaq has been outperforming SP500 recently, as is often the case in the first quarter. While it seems US equity valuations are high, especially for technology companies given monetary policies, economic performance, and global regulatory environment, post election optimism may continue to be supportive. More specifically, my trade plan will look to buy a basket of bull vertical spreads on select technology companies while buying puts on the SP500 such there will be a net long directional exposure while still being able to earn theta overall. Should Nasdaq performance start lagging SP500, especially if market direction changes per rule, I will quickly adjust net exposure to bearish. In the meantime, I will build my portfolio with more aggressive entries to the long side than with hedging, using a reversion to mean methodology based mostly upon set deviations from "mean" price.
You forgot to mention all the other trading sites I'm on! Edit: What's would you say the over/under on this journal continuing to get updated after, say, three months?
It won’t happen. The over/under on you banging, skanky, progressive chicks with hairy armpits is 10.
When you are so used to classic videos, anything different is more than welcome. How would you call that category? Asking for a friend.