IDK where to start but I have been trading mainly options last 3 years and try to stick with only weekly SPY options intraday scalping. I bought SPY 210 puts expire 16SEPT right at the open on friday morning and sold around lunch. Market kept selling off afternoon session and cut my profit like usual. /ES gap down double digits into monday open I always run my loser, exactly every single time. But when it comes to taking profits, I get out fast. Please help.. IDK how but I need to overcome this..
Just like you should have rules for entering trades, you should have rules for the exit. If you don't have exit rules, you will be oversensitive to price moves, thus you cant hold trades until they don't make sense anymore. It's like "this looks good, I gotta get in here" but after your entry you have no controll over your position. Everytime there is a candle against your direction you get spooked and have your finger on the cover - button untill you cant take the stress anymore and get out. There is no solution regarding psychology or other mental stuff. It's just that you don't have an idea how your trade should develop or which signs you use to get out of the trade. Therefore no conviction so you cannot hold.
For your money management problem, there is one simple solution : Rather than taking profit, roll as long as you win. For example here, sell SPY210 and buy at the same time SPY205 or SPY200. If markets continue to fall, roll your SPY200 => SPY195 or SPY190. Etc. Of course, if you are wrong, don't average down. CM
I don't know much about options but if it's about holding a trade longer then I find mechanical exits to be quite useful. I will quite often take profit sooner, say when price meets a pre defined target such as a s/r level that I am watching but if I fail to take profit at that level and the price comes back my mechanical exit will at least get me out with some profit. I use automated trading (ea's on mt4) and code my own so I can code almost any exit into it. Mostly I use trailing behind a certain moving average. On good trend days it could be the 100 sma but on quick run days may be a lot tighter such as a 10 ema. You may or may not be able to automate that type of exit but with some discipline you could make sure you exit if your mechanical stop level is hit.
You need specific rules on when to get out of a trade, get out if those rules are met, doesn't matter if you didn't cash in your puts right at the bottom, nobody can predict bottoms/tops consistently. Anyway the Vix got smashed this morning, so I think you didn't do too bad.
Run the LOSER, cut the WINNER = do not have a working METHOD you need a working method no one can help you with that only you should help yourself to develop it, the question is can you do it? if you lasted 3 years without the method, that means you have something to start with building the working method but for starters stop trading real money now, until you loose all of them
Your Ego is in charge when it comes to your loses, your inability to except being wrong is standing in the way of small loses. For profits, your ego is not allowing you to give up control, not letting go to allow the element of chance to take over. Or your just afraid of change? These are all habits that can be worked out with practice.
Well, first off, you'll Never know for sure...during the present moment in the heat of the battle. It's only in Hindsight when everything is crystal clear and done...that it's easy to say I should have done this or that at this moment. But try to look at the overall greater picture of things...to help calm your nerves and not get fazed by relatively minor bumps in the road. Consider all the variables in play in the macro viewpoint of things, and micro one as well. There's nothing more to say or teach. -- May the farce be with you
Good points above. You know already it's hard to profit with smaller winners than losers (generally speaking but not necessarily so as always). Perhaps lowering your position size so that the fear of taking your initial stop is minimal and the thought of holding longer is less painful could help? Of course once you build confidence in yourself and your method you can slowly start to build it up again.