Note to Myself

 Struggle bus lately. Need to get things off my chest/mind.

The month so far hasnt been bad. Up a little bit. 2 huge wins on AMZN and PVH keeping me positive still. This last week though has been tough. Lots of losers. Monday started off 0/10 with 100% compliance. I think that right there should be a warning sign of whats to come in the market.

This last week I lost 14R. 1st week made 20. AMZN PVH alone made me 15R/+2200$ off of 315$ of risk.

My best trades this week totaled +915$ and +14R off of only 200$ of risk. Still have a TMUS trade im swinging which should bring this up ~+$1300 and ~+19R but well see. Also this trade only off of 81$ of risk. This week my risk feels off. Im back in that spot where my best wins are off of low risk. Sometimes thats just how it is, sometimes its me not calculating my risk fast enough or correctly.  

Looking at my losers and big wins, some things the big wins all have in common:

-Good option volume + spread

-Good High stock volume

-Higher beta names 

-Bigger ATR 

-Big names 

And my losers:

-Low volume

-Low ATR

-Bad option vol

Im kinda getting sucked into to black and white trading again. Im trading all setups and names the same, with inconsistent risk.

Going back to the big 3.

1. SELECTION

My selection has improved a ton. 750 charts a day, im able to mark great Monthly and Weekly setups. Rarely having more than 15 stocks a day im looking at trading.

Names like ABT AMZN TMUS PFE PLTR are good high vol, high beta, strong names with good option vol and tight spread with little algo interference.

Names like OLLI ALB SHAK FLEX KEYS MP JNPR are low vol, low ATR, low option vol with decent spreads, but dont move even when stock makes a new HOD push with volume.

They all have good daily setups. They all are worth trading.

They are not worth trading the same way with the same expectations.

So this jumps straight to management 

3. MANAGEMENT

The lesser names are not daytradable with options. Which is fine because Im mainly looking to swing these anyways. 

That means a few things.

1. I cannot day trade these so I have to reduce my adds to maybe 1 add a day, if it sets up correctly.

2. These trades on low vol names do not move in my favor until much larger moves happen. Rarely intraday. The bid/ask rarely budges much.

3. If I am adding on new HOD expecting big breakouts, im just going to be disappointed as it doesnt move the needle much if at all.

4. I need to widen my expectations broadly, and stop staring at 1min/5min on these names expecting them to be a quick in and out scalp/day trade.

5. I need to start using verticals / spreads.

I need to completely change my approach on these. It is a set it and forget it. I believe every 30min/1hr candle would be a good time to make a decision If I want to bail (should still be at or near -1R) or add.

So next time im trading OLLI or a name like it

    -Get in at usual entry

    -Stop set at recent pivot lo/lod

    -Stop also given room to allow for testing of area. 

    -Add on 1hr basis if action and PA still good. 

    -Hold with expectation of days/week

So theres a solution to the management issue. As for taking wins where I should, cutting losses Im doing good still. Its just recognizing I have to trade some names differently that is my issue.

Now to number 2.

2. RISK

What happened this week on my big wins.

ABT

Excellent setup. Strong industry theme. 

In as it broke 5min opening range. Added with momentum. 

Avg in 1.79 with stop at 1.65

Looking back at option chart, that is correct nothing wrong there. 

5 contracts with .14 cent risk is about 70$ of risk.

I did not label this as super HPB setup that I needed to get huge on. Signs were there for it and certainly could have been bigger. Name flat out didnt give me a pb or chance to look to build and just ran.

I think for this trade, its fine. Just how it went. Only thing I could have done here is just be bigger from the beginning. Was it a problem I wasnt? Obviously yes cause it was a monster winner, but you never know that. 

BUT AGAIN

ABT is a high vol, high beta, high option vol name. With relative strength. So it isnt completely unjustified to say I should have been bigger from the start.

Plus at the open, spreads can get wild and really hurt more than help if this went the opposite direction. 

Captured 70% of MFE, tried later on to get back in. No go. No regrets. 

FSLY

  Familiar big name. Not relatively strong. Tech name obviously strong sector. Not super HPB but definitely a good contender

100% risk error on my part. Big miss. 

Starter as as it was holding above range, risk at LOD. 

In 2 at 5.15 with risk condition of a hold under range, or about a point away max with delta of 40. Means risk of about 4.75 roughly.

Started with ~80$ risk

Tested under range into old BO level, ripped up. 

That is my all in sign. Thats my big cue to get fkin big and let it ride. 

Risk can be very very tight here.

Would change to that new pivot low it just made at 71.07

Meaning from entry to new risk, was .50 cents, with delta of 40, means ~.25 on option contract means ~4.90 means now risk only at ~50$

I only added one more at 5.15 bringing risk to $75

Sad.

Didnt add on new HOD either.

I think I got a bit shook becuase its a 5$ contract.

But it trades very well. Great volume, nothing to be too afraid of here.

Plus everything I have seen up to that point with market, low vol pull in and rip higher. 100% have to be bigger. Should have gotten up to 8+ contracts instead of 3. 

With 8 risk at $150 could have been a 4 figure trade. MFE of 6.90

GDX

Gold miner ETF. Gold just started heating up and getting super tight. Not just GDX but a few others as well. Industry confluence and momentum with volume. Lots to like here. Was not a big favorite yet because only day 1 of the possible breakout plays. 

Almost the exact same as ABT EXCEPT, we have pre market action. 

Delta of 50, in 1st entry at 1.18 as it crossed HOD with underlying at 34.85 and add at pmkt bo at 34.88

Underlying stop point would be around 34.70 so risking .15+ cents so off 50 delta with average in of 1.19, my risk is at 1.13. 1.10 MAX in worst case scenario. 

I only started 5 contracts. Literally 30$ risk to start this grade A bad boy. And then added 6 to bring it up to 11 contracts on $70 risk. 

Should have been $100 risk min on this trade ~15 contracts+. No chance for more PB adds and thats fine, but again now im over estimating risk here. 

So it seems im backwards again.

Im getting big, risking big, adding big on all the slow name, low volume setups, underestimating risk, and im overestimating risk on all the high vol, high option vol trades that are making me all my money. Frustrating. 

I used to, before every open, find the contract I want to trade, find what my risk is going to be and trade around it. Lately I tell myself 'well I know im going to get the contracts around 40delta, just OTM so I dont need to go through that step anymore. And now its hurting. 

Because all of these trades are happening in the 1st 15 minutes of the day. Same as AMZN and PVH the week before.

Not to mention these arent the only trades I have on this early in that day.

I took 54 trades this week, 21 of them in the 1st 30 minutes of the day. 19 in the 1st 15 minutes. And 8 in the 1st 5 minutes of the bell.

CLEARLY I need to know my risk well before hand. Well thought out and well defined. 

So to wrap it up.

-Management on lower vol names has to change. Entry only. Add on 30min/1hr basis with time horizon in the days, not just intraday. Use spreads if wanted. Time to experiment with them finally.

-Risk has to be determined on all watchlist names before the bell. This prevents being too small on big name HPB potential winners, and prevents losses being too big on names with wider spreads. 

If all goes well for the rest of the month, my higher beta names wins should be much bigger, more day trades on them with clear managed risk, adding and following management rules still. And on lower vol names, will be set it and forget it type trades using spreads and 30min view, not looking to day trade them.