Micheal and TJ and anybody else following. I'm trying to be brutally honest with this reporting. Won't do anybody any good otherwise. I went from a WINNING STREAK to a LOSING STREAK this week. The biggest loss was that darned simple mistake I made with the credit spread. Since I was diddling with November long positions, I made the mistake of clicking on the MONTHLY OPTION CHAIN LAST WEEK and put the spread in the wrong time period. It should have been a weekly and turned into a monthly. As a scratch paper trade experiment it would not have been important. Just a learning experience to shrug off. But I was working in the paper money web based TOS account, trying to keep my trading honest. Anyway, the market rush went against me yesterday and I closed it out for a loss of $13,612 with a $320 set of commissions to add on. Total loss on that clerical mistake got expensive at (-$13,932). Like any foolish amateur I compounded the loss, because when about 20 mins. after entering the credit spread order, it was so far out the money, I let it ride and this week, the market kicked me in the so and so. The lesson learned repeatedly is when in doubt exit. Then this week, I did a couple of trades I just got out of longs. I had 10 contracts in PUTS and the market sort of meandered up a bit, but I bought them on an early signal to buy, based on an indicator telling me the market was slowing and going to change. What happened, is the indicator in a smaller time frame, gives an early signal, but did not later confirm with the longer time frame. I anticipated the market turn and got bit. Just closed it out and lost -$2924. To make it worse, I had waited a day or two and decided my earlier false signal could be doubled up on, as the market looked like it was close to turning again, as it was tired. I repeated the same mistake bought again yesterday and got bit again today, for a loss this morning of ( -$2089 ) Since I had transferred my long option trading from scratch paper trading to the TOS paper trading account, there was no way to fudge this and I took the losses this morning. A losing week. Since my transfer of LONG trading by buying is now in the TOS account I am ending up from a $2959 profit in the account, to a loss of -$2089 I´m annoyed with myself in the long option trading, because I know better. Just let myself get GREEDY and over confident and tried to be premature in the trading. It won´t bother me so much, because in long option buying you can make it back quick time. Still when you start a losing streak, it is time to reduce the bet size, not double up. That was a stupid thing for me to do. Plus I should have waited for the confirmation signal before putting on a trade. Lets hope I am going to overcome the emotional and physcological mistakes here. Really aggravating when you know better and make the same amateur mistakes over and over again. Ahh well! I´m working on trying to make the trading in long options mechanical. I've got the system good enough. Just have to obey the darned rules. As far as the credit spreads, my only credit spread trade works fine. The error was a clerical error on entry and made worse by not taking a quick loss and canceling. Pilot error. Still, the credit spreads lose too much and take too much capital, so I'm probably going to stop doing them and concentrate on mechanical trading of long options buying. See what we see! This is a time to step back and wait a bit. PAUSE! Reduce the trade size and be more careful about using only a confirmed mechanical signal.
Trading Journal Chinese agent request Guys name is DAVID 360826221@qq.com Just replied to a request for some technical information at this address. Not sure where I have his mailing address?
Falconview, that is why you learn on the paper money. Learn from those mistakes and when we get a system down, we should print out the criteria, and have it posted up around the computer. Then read and follow it. If not we will all be in the belize rehab unit! Michael
Michael Well said: FRESH START Going to try my mechanical trading system. See if I can stick to the rules. Starting capital $5000 like I would with real money. Only in TOS paper money. See how long it takes to double it? Long options only, short term trading. I literally got wiped out of 3 months profitable trading. Even lower by around $2000 than when I started. So we try again! No credit spreads. Or any kind of spreads.
FV: You made the right decision to paper trade. Imagine if it were real money, how you would have felt. I would suggest that when you place an order you may want to read it out LOUD, and/or maybe have your wife hear it/read it on the screen. In any case, I think one should add costs of mistakes. One day I was trading a forex pair. Instead of entering like a 20K order, I typed two extra zeros to close what was a profitable trade. I did not even realize that I made a mistake. I thought I banked my profits. Later I checked, and I saw a big hole. I was upside down by 10 times the normal size. You can image the damage. Lesson: allow for cost of mistakes as operating expenses, and always assume you are making a mistake, and that you made a mistake even after the trade is executed. There are also trade busts if trading stocks in particular. Best wishes for your new test. You have learn from the first one! Also thanks for the info! And do not feel down. If you do, remember that a main point life is first to be happy.
FV and Stanford: Just to let you know that my models told me to cover any short put, and to cease considering any new short put until I hear from the models otherwise. Stanford: You remember the sunken cost in that report you sent me. The passage of time has proved that the sunken cost was expensive because of closeness to strike and also because of volty. Now that volty is lower, and price move up, a sunken cost idea would now make sense. The point stanford is this: there is also timing/selection involved in premium selling.
Trading Journal NOW you tell me cover my shorts.? I just put one on. 2 contracts Nov 555 OEX PUTS @ 9.30 I'm admittedly nervous about it, as it is going against the trend.
Falconview, I have been doing many of them lately ndx spy rut oex iwm, just playing with many of them for now. The newsletters seem to mainly trade spy, rut, and oex. I thought you were out of spreads altogether now. Closer to you time zone, in Toronto Michael