Long the ES Sep20 1605/1645/1725 2/3/1 iron from 39.50 risk (40.50 credit). I am expecting a downward move this week but this position has a good amount of resilience to the upside as well. I am going to start setting profit targets for all of my trades going forward. For this one my target is a 10% gain (4.00), or I will likely exit on a body strike touch as well. "Whatever you can do, or dream you can - begin it. Boldness has genius, power, and magic in it." - Goethe
1) Probably not going to put the AAPL trade on as I am to indecisive on the direction. 2) I notice you continue to put on trades that will capitalize on a move to the downside in the ES. At what point do you change your mind on the bear side? Just curious as I have found myself way out of sync the last few days and I am just sitting on my hands right now.
China mobile deal will be huge, at least perception-wise. The only hangup on hitting 515 is the IP5S rollout tomorrow. Gotta be long stock/deltas.
I am probably going to be closing my purely directional trade (puts) imminently. The butterfly I just put on will be profitable in both directions up to a point, given a little bit of time, but obviously is oriented much more to the downside. We have had five up days in a row here.
Went ahead and closed at 2.89, for a return on risk of -23%. That was painful, obviously I was completely wrong on the market direction there. Going forward I am going to try to stay away from purely directional trades; in general those have not been very successful (to say the least) as compared to my trades with both volatility and directional components.
Went ahead and closed this pain trade at 42.75 credit, for a -6% return on risk. My unhealthy bearish obsession the last few days has been killing this account, and taken the journal from the green to solidly in the red. Even if we drop a little bit into the close, today was still a strong bullish move (with SPX looking likely to close above or very close to the 50MA) and calls for me to halt this bearish outlook for now. I am going to sit out the rest of today and tomorrow to get my mind back where it needs to be and then re-engage on Wednesday. Big lesson learned here is that I have to be more nimble in my market outlook and not get attached to a certain view on where the market is going.
I don't know if nimble is the right word. For me, it took learning that if you try once and fail it's ok to try again. It's when you fail 3 or 4 times in a row take sometime off and let yourself garner some new ideas to trade. I've also learned to almost never try the same type trade again the same day unless something has drastically changed and it looks really really good.
I am going dark until after September opex. I heard a story once about Mike Krzyzewski who coaches the Duke basketball team. The team suffered a heartbreaking loss in a key game, and they got back in the wee hours of the morning with the mood pretty dark. Rather than everyone heading home to dwell on the defeat, Coach Krzyzewski then had them immediately practice for hours in the middle of the night, turning the disappointment and anger of defeat into a positive force to improve upon their play, put the mistakes in the game behind them, and psychologically move forward to the next matchup. I think there is a powerful lesson there. I have suffered a handful of painful, self-inflicted defeats the last few days by continually shorting this market, a string of defeats that simply should not have happened. I am stepping away from the game for a few days to immediately put that frustration, and motivation to never let that happen again, to work on improving my trading game. I am going to finish building my new sheets which will help improve my ability to assess potential volatility trades; revamp and better define my entry and exit criteria, and hedging considerations, for trades; define a more rigid money management system; significantly expand the list of charts (and, for a subset of those, IV surfaces) that I review daily both to observe market activity as well as identify specific trade opportunities; and design a new schedule to provide more discipline to my daily mining for opportunities and subsequent trade entries. Thank you to all of you who have been following along and especially those who have provided what has been very helpful feedback. I hope you can join me on the next leg of this journey as well. I will leave you with the words of Michael Jordan: "I've failed many times, and that is why I succeed." See you in a few days.
Good man. It takes more to admit we need to step back then it ever takes to place a trade. For funsies, since I've started to get interested in flies I'm paper trading the 475/490/505 put fly at 3.71 mid. Thought about throwing it down as a 1 lot but said meh and I'm going to wait until I feel very comfortable with the strat.
Thanks, AZ. Good luck on the fly paper trading. I think you will start to feel comfortable with them fairly quickly, as traditional 121 flies are pretty straightforward. An ATM fly such as the one you mentioned, where spot is currently at one of the wings, can be a very powerful and cost-effective directional play. One technique you can use for evaluating it is to compare it to the vertical by itself (long 505/490 in this case), e.g., the initial debit required, gain on a body strike touch at different days forward, and of course r:r ratio which is where these can really shine in my opinion.