JANUARY MONTHLY REVIEW

 Very good start to the year. Excellent market conditions, excellent reads. Clear themes, lots of volatility. Seems like a great indication of whats to come.


NUMBERS

+$18,950

+111.4 R

53/114 37% WR

81% Compliance

43 -1R

23 More than -1R

Avg Win  +$540

Avg Win Risk $137

Avg Loss -$106

Avg Loss Risk $126

P/L Ratio 5.08

Avg Risk $130

Expectancy $131

10 Winning days

Avg Win Day +$2275

Avg Loss Day -$552



So let me start by saying I love options. I switched this month to trading the way I feel like trading. That meant abandoning trading shares. Giving up on scalping and trading based off of daily charts, and changing my expectations from short holding periods, to longer holding periods. 

Trading options allows me to trade the action of the stock, rather than the price of the stock alone.

When I traded shares I was obsessed with the pennies. I could not, for years, let myself trade allowing the stock to explore past my stop level to see if it would fake out or not. I went back and forth on so many reviews on how I need to or how I dont need to. 

With options, the price of the stock sometimes isnt correlated in that same manner. I can still allow the stock to do its thing, hold on, wait and see if I need to get out or not, and still manage my risk well and not take a larger than intended loss.

There is less stress in my trading and holding my trades.

I can add better, I can take profits better. I feel a lot more free and unrestricted in my trading.

No problems holding over night. So far. I know that one black swan mega gap down is coming. But with the size I take on average, If it does happen, it shouldnt kill me. Will certainly be a decent hit, but not enough to ruin at maximum a week of profits. 

------------------------------------------------------------------------------------------------------------------------

This kind of performance has happened to me before. I get hot, I get too hot, I get cold and give it up so heres some things to keep in mind.

1. This market.

Is unbelievable. There are things happening out here I dont know if ill ever see again. We have major moves occurring everyday like its the regular. It will come to an end.

2. Im only as good as my last trade

Step on the gas while im hot, but also keeping in mind this theme/trend will not last forever. My BIG mistake past years has been not adapting to market conditions, and kept trying to do the same this over and over again, when the market was not telling me I should

3. Stay adaptable.

I do a very good job now of keeping tabs on several key market components. Sectors/Industries/Leaders/Hot Industries/Bonds/Indices. I know when there are themes. And I know when there is chop. I did a real good job with those state of the market posts, and no surpise, What I saw happening in the ETF world, eventually caught up with the rest of the stocks and I was ready for it all. 

4. Dont stop pushing to get better

Now is not the time to sit back relax and let the money flow in. I know I still made mistakes this month and have things to fix. I still dont have my written down/typed up process on how I want to trade these option swings. Got a lot of sticky notes in front of me, but no solid YES or NO foundation yet. Time will tell me when im ready.

------------------------------------------------------------------------------------------------------------------------

On a personal note.

I am finally married. Wedding was amazing. Leaving for Miami tomorrow. Life is good. No complaints no regrets. A very happy past week and weeks to come. 

And a bit of odd news. I made more money this month than I have my whole career. I was up 16k on Wednesday and you know what I felt? Nothing. I felt absolutely nothing. Not joy, not sadness. Its just a number on a screen and it always will be. If anything I said "oh wow" but im not jumping for joy. 

The big traders dont lie when they say more money more problems. Or its never enough. I sat there looking at my p/l thinking, it needs to be more. When you make 1mil, youll tell yourself, If only I had 2 mil. Its all about the process. 

What does get me excited is charting. Looking for these stocks that look like they are ready to explode. That stuff gets my heart going with excitement. When I sit at my desk, 830 comes around, Im ready to go, its game day.

My focus has shifted so far away from making money, to completely on my process and course of action. Planning and preparation. 

Another sad thing is I am chained to my desk now. I am at this desk from 7am to 5pm or later every day. Nothing in between. Being an active swing/intraday trader, being in 7/8/10 positions at once, means I am watching them all, all the time. Ready to take some off when I need to. I do not like not managing my trades. Time is the price I pay to get the job done. It is a job. It is a job. It is a job. Proper preparation and planning prevents probable problems. 

And Im thinking my performance and results speak some truth to the time I have been putting in lately. 

---------------------------------------------------------------------------------------------------------------------------

I am still fairly new to options but I quickly learned what I need to be trading and selecting strike wise.

Delta around .40 for fast movers. Around .60 for slow movers.

Low IV is best, but ill take anything high. Im a breakout trader so I expect volatility to increase after entry, regardless where it already is. I feel there is more to learn here.

High Vega is good.

Theta dont care

High Gamma is good. 

Ive been keeping track of course. 


These are all averages. 

D star is number of Daily checkboxes I have ranging from volume, news, MACD and 14 other things. The more the better. High probability trades.

Avg star is my own rating. Out of 3.

Delta is higher

IV higher

Theta, Vega nothing notable.

Gamma higher

Size is good, means im trading winners larger.

Usually risking a quarter on each trade.

Aiming for 9 RR trades

Avg trades around $2.50

MFE is almost double my entry. 

MFE is only .10cents meaning, my best trades dont go more than 1/2R against me. 


Selection is not an issue anymore. Im looking at 400 stocks everyday. Theres no time to waste on taking lesser setups anymore. My issue now is risk. As it has been. Its a little hard to get a clear picture of where I think the option will be priced, when I want to get out, but im doing better with it as I go. I have a lot of more than -1R trades. Almost half my losses are. And thats certainly a problem. Work in progress as always. 

------------------------------------------------------------------------------------------------------------------------

Whats not to love about these numbers. Avg win 5x Avg loss. Avg MFE on Winners is +10R. Max pl is 5.3x bigger than min p/l. Trade expectancy is same as avg loss. Avg win is +3.7R 

Lots of potential here. But also problems. MFE is 3x larger than what im actually capturing. In other words, im giving back 66% of my maximum potential win when I finally exit. And that is right in line with my Avg % captured on each win at 34%.

So I am again back at trying to find out what the best process is for me to exit these trades. With stocks 50% was the number to beat. With options it is certainly more difficult. Starting to realize why Albert Einstein said compounding is the 8th wonder of the world. Volatility, acceleration. 

Options are a really deep field to comprehend. I havent even started considering straddles, verticals, condors all of that nonsense. But what I do know, is that I have confidence in the trades I take, and if I do, why would I want to hedge and place bets against myself. So buy some sell some at the same time doesnt make sense to me, and if it doesnt feel right, I wont do it. 

--------------------------------------------------------------------------------------------------------------------------

A few more stats ill share



TLB + BO is best performer for sure. Pretty much all my p/l coming from them. 

3star the best

Taking trades off HOD the best

More vol the better

More daily tags the better

Nothing really stands out on specifics. News a slight bump. Nothing notable. 

--------------------------------------------------------------------------------------------------------------------------

One of these days I will go back and look at my trades and ask myself the same 20+ questions to help find best process to take. But that time is not yet. For starters im going to Miami next week and want to be free from this prison of a desk for a week. For another, I need more data. I have a real good start here, but when I started this year I had several trades where I didnt quite know what option to take, how to manage my expectations with it. After February I think itll be time for that. 

Im going to stop posting blog posts everyday on my swings. Its taking up too much time and im starting to look for more ways to get off the desk than to be on it. I wont be posting much at all anymore aside from the occasional work post or monthly review. 

Not going to give myself goals. The goal is to work and get better. To be a better trade and do the work day in and out. Review my stats and come up with plans on how to perform better. When the time comes to write out goals, ill do it. 

Lots of improvement and potential here. Very excited to see whats to come.




Comments

Post a Comment

Popular posts from this blog

Trading Plan

Image
Time is a thief for the impatient. And a gift for the patient.  Do I need to think about selling options?  It makes sense to sell puts, internals clearly strong, but the market is not in clear position to make that a good trade yet. Wait until its clean and clear. I would rather not sweat, than risk more money in uncertainty.  BEFORE THE BELL -Premarket Checklist. -Is the market Trending, Chop, or turning? -Is Sentiment making any significant trend breaks? -What are best/worst performing sectors?     -Are any breaking out or down? -Do I need to make adjustments to my investments? -Does yesterdays action look likely to continue today? -Have we gone in a straight line to S or R?      -Do I need to be cautious of an overextended market and look for reversal instead of continuation? WATCHLIST PREP -SPY/QQQ FANGMANT+ always in play.  -Monthly/Weekly watch always in play for VA breaks.  -Proper boxes and Anch vwap charted.  -Scan through ...
Read more

MTX

Image
 MINERALS TECHNOLOGIES INC. Minerals Technologies, Inc. is a resource and technology-based company. It develops, produces, and markets a range of mineral, mineral-based, and synthetic mineral products. It operates through the Consumer and Specialties and Engineered Solutions segments. The Consumer and Specialties segment serves consumer end markets directly and provides mineral-based solutions and technologies that are essential to customers' products. The Engineered Solutions segment combines all engineered systems, mineral blends, and technologies that are designed to aid in customer processes and projects. The company was founded on February 19, 1968 and is headquartered in New York, NY. Strong name, another specialty chemicals industry trade along the lines of LYB HWKN KWR. Strong tight setup, HTF charts love it with curl up MAs and taps. Obviously not as tight as I would like on W or M, but trying something with this one. Trend momentum continuation.  Clearly in a signifi...
Read more

11/30 DRC

 Last day of the month. Not much trading exactly to talk about. Big issue last week was speed. I was slow in almost all cases. Trying not to look too much into it. Took a few weeks off, its expected to take a bit to get back into the swing of things. Risk was main focus as a goal going forward. Correct size, consistent risk throughout every trade and setup for consistent results. That I did good with. Main things to focus on 1. Following entry criteria, making sure I trade what I am supposed to 2. Using correct size to reflect risk already determined by setup 3. Must be faster with ^^^ 4. Cut losses fast on adds. In and out, dont wait. 5. Follow management rules, up 1R/2R etc. 6. Take profits in 3rds.  7. Enter trade with small size if it is leaving without me. Big adds come in only if core is at price and action I want to see.  Market looks hot. Nothing but breakouts around. Gapping down a little, recovering already though into the open. SPY at and holding above prev lo,...
Read more