July 2025 pt 2

 -$3266

Everything that went wrong was MS -$3728.

For starters everything was perfect here. All trend higher, clear pattern flag. Strong industry. ATH. 

Day 2 was perfect, clear rel str, reclaim of all MAs and rip with vol.

Then FED came.

At first it was fine. Pulldown with market weakness, still held trend and MAs higher and close near HOD and on rip reclaim again.

Then Thursday

Thats where the weakness came in. 

Started losing MA trend higher, seeing sells. Clear vwap weakness. 1hr mas losing curling lower. But held bottom of range and 4hr50 which i know to be  major point.

I wanted the iron condor. My order was in. Came within 7cents and did not fill. Closed the day just above it, no trade, no 2nd wing, no hedge. 

Then the 3% gap down next morning. 

Knew it was a max loss scenario.

It got even worse.

Platform lagged. Had to restart. Put order in, order wouldnt load. Spread wouldnt load. Option master wouldnt load. Restart.

Came back, dropped 2 points.

Out the sold.

Within 30seconds, the stock bounce, prem on the hedge dropped 25%. I lost an extra $1300 on 30 seconds of delay. 

I had 35 contracts. .50c per contract just evaporated in 30 seconds. Walked my order down, couldnt believe how fast it left me. 

What do you do here. 

For starters This is my own fault and goes back to the end of June.

Every month I have a calendar next to my desk with major earnings for every day, before after the close for the whole month ahead.

I use earnings whisper.

I also put down major news releases every morning and time of release ADP, Unemployemnt, FED.

I knew this week was big for Healthcare. I knew the end of this month had tons of large names reporting.

Somehow someway, I did not catch any of the FANGMANT earnings. I did not have them down. I do not know how I missed this. If its not on earnings whispers calendar, its not in my calendar.

I knew the FED was happening and I went for trades anyways. 

I didnt know FANGMANT had earnings until T/W and went for trades anyways. 

I KNEW then this was going to be a volatile week.

I went for trades anyways.

Well here we are. 

All my studies done so far tell me volatility is my enemy in my trades.

And here I got huge in front of all of it.

And this is what can happen.

Whats the Fix

1. Find more accurate way to record stock earnings

2. Avoid heavy industry earnings weeks

3. Avoid FANGMANT earnings weeks

4. Avoid FED week.

I needed to have better rules for trading through this. In the end, it makes more sense to just not trade through this. I can look at this one trade and name everything and make new rules and do whatever to make it right, but fact remains volatility is the crusher. And when things are expected to be volatile this is what can happen. Just avoid it. Be disciplined.

Avoid the volatility. Market themes change on a dime. On an announcement. It can and will happen. 

Well this is it. Ive seen everything other than assignment now. Trading spreads for 4 months. Learned an incredible amount. Despite this disaster I am still profitable overall. But obvioulsy not happy. 

I have sections in next months review to iron out (pun intended) some details on how I can hedge better. 

Whatever. Lets move on.

I did a ton of research and review into this month. I nailed down a lot of processes and data and learned mannerisms one certain trades and which key variables I need to pay attention for to better judge winners and losers and how to hedge more when im in trouble.

Part 1 went over...

    -Overtrading 

            -Settling for less

            -Ignroring HTF MAs against thesis

    -Risk Reward adjusting

            -Stats were never consistent with MAE and est rsik matching when down -1R on underlying

            -Original Formula assumed 1:1 gain for MFE on hedge and MAE on sold

           -Ran some math and averages through Grok and came out with 1.3 multiplier to account for                     gamma and theta

    -Risk Management

            -Fixed most by doing the above

            -Risking last 10% for a winner to exp at 0 can be BIG problem

            -Losers can be offset by adding a wing and making the trade an Iron Condor under certain                         circumstances            

    -Trade Management

            -Defined certain circumstances

            -90% Profit Take

            -Changing stop from Strike, to PA/Breakeven under certain conditions

And in Summary...

    -Tighten that shit up. Dont fight the bigger waves, go with them, stick to what has been working best

        -Bear trades, fading ovr ext moves. 

        -Tight 1hr/4hr MAs with momo in favor

    -RR

        -Will be explored more here

    -Risk Management

        -The estimated risk never really changes that much, even in the last 30min on friday, As I have now             seen, you can still get crushed.

        -90% OUT rule on negative trades

    -Trade Management

        -When does unexpected and turns against losing all MAs, Breakeven is a Gift  to be taken. 

        -Take the opposite trade on breaks further against AFTER a pullback that does not recover in favor.

        -When PA is opposite of what you thought, get out. Cut losers small and fast. 

STAT REVIEW

From the top here we go

But before that, why am I doing this

I want to see what good add conditions look like.

I want to know where good adds are on my best.easiest/no MAE wins

I want to know when I can max out and not expect a loser

I want to find the 90%+ edges

 -Look at winners and see

                -Add spots

                -If ever lost MAs

                -If ever lost prev D

                -If ever lost a VA edge

                -If ever failed a bo/break

                -D MA interaction

                -Avg distance against to see if can sell close strike on average

                    -What does that do to risk

                

AS OF 7/25/25

                                                                                                            68 Wins 26 Losses

-9 1hr MA trend in favor at entry 76% 85% -9 1hr MA trend against at any point 68% 100% -Ever lost and closed against 9 1 hr 65% 100% -Showed clear MA Support/Resistance 9 1hr 25% 8% -Had a clear MA bounce add chance 9 1hr 24% 0%

-20 1hr MA trend in favor at entry 84% 77% -20 1hr MA trend against at any point 51% 96% -Ever lost and closed against 20 1 hr 65% 96% -Showed clear MA Support/Resistance 20 1hr 31% 4% -Had a clear MA bounce add chance 20 1hr 24% 0%

-50 1hr MA trend in favor at entry 56% 69% -50 1hr MA trend against at any point 78% 92% -Ever lost and closed against 50 1 hr 46% 92% -Showed clear MA Support/Resistance 50 1hr 24% 0% -Had a clear MA bounce add chance 50 1hr 19% 0%

-9 4hr MA trend in favor at entry 74% 69% -9 4hr MA trend against at any point 40% 88% -Ever lost and closed against 9 4 hr 56% 88% -Showed clear MA Support/Resistance 9 4hr 40% 12% -Had a clear MA bounce add chance 9 4hr 21% 0%

-20 4hr MA trend in favor at entry 47% 69% -20 4hr MA trend against at any point 50% 77% -Ever lost and closed against 20 4 hr 38% 77% -Showed clear MA Support/Resistance 20 4hr 32% 0% -Had a clear MA bounce add chance 20 4hr 18% 0%

-50 4hr MA trend in favor at entry 41% 65% -50 4hr MA trend against at any point 51% 54% -Ever lost and closed against 50 4 hr 15% 62% -Showed clear MA Support/Resistance 50 4hr 9% 8% -Had a clear MA bounce add chance 50 4hr 4% 0%

-Broke out of Range in favor (Hr) 81% 77% -Broke out of Range against trade (Hr) 6% 77% -Broke out of Range in favor, came back in, closed in against (Hr) 51% 77% -Broke out of Range against, came back in, closed in favor (Hr) 4% 8%

-Had a clear D MA bounce add chance 19% 12% -Had a clear D S/R bounce add chance 16% 12%

-Broke out of Range in favor (D) 62% 77% -Broke out of Range against trade (D) 9% 77% -Broke out of Range in favor, came back in, closed in against (D) 34% 77% -Broke out of Range against, came back in, closed in favor (D) 7% 8%

-Retraced to tap 9DMA 49% 73% -Closed against 9DMA 38% 88% -9DMA acted as S/R in favor 24% 8%

-If D 9/20 Cross in favor 7% 0% -If D 9/20 Cross in against 0% 12%

    

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

Very interesting stuff here. 

Winners

The most notable has to be the 4hr 50ma. 15% closed against me.

80% of trades had 1hr 9/20 trend in favor at entry

Fake breakouts are not uncommon. For every range break I get, i should expect at least half of them to come back into that range and close in it. 

Winners do not breakout a range against me. 

As for bounce adds, there is no one special MA. It all depends, but I did see that once it bounces once, chances are it can do it again. Downside to that is usually it is only once. 

So keeping in mind where these MAs are (1hr chart open, overlay with 4hr) will matter. 

I should expect the MAs to trend against and even close against at least once during trade. 

The 4hr 9ma and 50ma have the biggest discrepancies when it comes to trending in favor, losing trend and closing against. 

Losers

NOTE that when mas start in favor and same percentage end up closing against that means they ALL lost trend

Losers do NOT show S/R in favor from MA taps. At all. PA is only 1 point of S/R. Losers dont show enough

Losers do NOT show S/R PA in favor at points you would expect some. When you are long, there are no buyers at buy spots. When short, no sellers at sell spots. 

Losers close against 9dma much more often

Losers fail breakouts in favor and close in range almost always. 

4hr 9ma trend against happens in almost all losers. 

MAs trending against trade is not enough to mark it a loser.

Closing against MAs is not enough to mark it a loser. 

A breakout in favor closing back in range is not enough to mark it a loser

A close against 9dma is not enough to mark it a loser

All of these combined, are enough to mark it a loser. 

 The biggest standouts are these

-A winner does not breakout a range against me. 

-A winner finds S/R in favor at points it should see it. Not all points, but at least 1. 

-A loser finds no S/R at MAs

-When a MA proves itself to be a good S/R point once. Next tap is an add chance. 

-4hr 9ma Trend against is a red flag.

-4hr 50ma Close against is a red flag

-A close against the 9DMA is a red flag.

--------------------------------------------------------------Took trade into 9dma against thesis

Winners ///// ///

Losers ///

Took trade into 20dma against thesis

Winners

Losers

Took trade into 9wma against thesis

Winners /////

Losers /

Took trade into 20wma against thesis

Winners ///// //

Losers /////

Actually pretty impressed by the data. 

Taking trades into 9/20 DMA and WMA does not seems to matter much at all.

The 20wma which has 5 losers, 4 of those were 1 name I added to in different spreads.

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

-Lost Day of Entry LOD same day (Winners 40% Losers 54%)

-Lost Day of Entry LOD any day (Winners 32% Losers 46%)

Winners tend to not lose HOD/LOD against me, but not by much compared to losers. 

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

Winners (64)

-Had a 1% in favor day at any time after entry ///// ///// ///// ///// ///// ///// ///// ///// ///// ///// // 82%

-Had a 2% in favor day at any time after entry ///// ///// ///// ///// ///// ///// ///// / 56%

-Had a 3%+ in favor day at any time after entry ///// ///// ///// ///// / 33%

82% of my winners had at least one moment of being in favor 1%

If a stock moves up or down 1% in favor of my thesis, relative to prev day close, that is a characteristic of majority of my winners. 

 

Losers (22)

-Had a 1% in favor day at any time after entry ///// // 31%

-Had a 2% in favor day at any time after entry //// 18%

-Had a 3%+ in favor day at any time after entry //// 18%

Losers clearly do not go in favor more than 1% 

Now how about same thing but reverse

Winners (64)

-Had a 1% against day at any time after entry ///// ///// ///// ///// ///// ///// ///// /// 59%

-Had a 2% against day at any time after entry ///// ///// ///// /// 28%

-Had a 3%+ against day at any time after entry ///// ///// / 17%

Not unlikely a winner goes against 1%,

But it is unlikely it goes 2% against me. 

In other words, anytime I see a trade down 2%, warning sign. 

This tends to match old data. Only 20% of winners goes more than 2% against me from my original price of entry. 

Losers (22)

-Had a 1% against day at any time after entry ///// ///// ///// ///// // 100%

-Had a 2% against day at any time after entry ///// ///// / 50%

-Had a 3%+ against day at any time after entry ///// /// 36% 

100% of losers went against prev day 1%

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

IV and ATR Ranges

Looking at W vs L on trades that remain inside of IV ranges, and inside of ATR days after entry. 

So IV on a trade gives you a range that you can expect the stock to remain in 62% of the time. 

If there is an IV of 25% then through a formula you can spit out a hi and lo.

If trade taken on a friday, there is no next day to compare so that data gets skipped. Likewise a trade on thursday will look at fridays hi/lo, but no day 3 to look at so it gets skipped. 

IV day of entry tells me expected hi and lo for 3/4/5 days out as well. which the more days there are away, the bigger the range gets. 

For IV day of, there is no way for me to see if it remained in IV range day of as I would need day before data which i dont track os we go striaght to look at day 2.

As for ATR, if ATR is 6, as long as the difference between hi/lo remained under 6, it gets an x

On day 2, same thing, if day 2 hi and lo is under 6, gets an x.

I tracked hi and low of proceeding days and here is what we get

                                                                                        W              L

Stayed within ATR Day of Entry                                 65%            81%

Stayed within ATR Day 2                                            74%            84%

Stayed within ATR Day 3                                            82%            58%

Stayed within ATR Day 4                                            85%            73%

Stayed within IV Day 2                                                66%            40%

Stayed within IV Day 3                                                78%            53%

Stayed within IV Day 4                                                92%            73%

ATR Day 3. Looking at stats, these are on COST MDB SCHW GILD all expect one were big breakouts against me.

In fact, this data ties in with the breakouts against me done above. Higher percentages on losers day 1 and 2. 

Lower volatility helps with winners.

And that makes sense with the IV data as well.

Lower vol  = less volatility = bigger chance we stay in ranges = more winners

All w and l has a good range of each high vol and low vol. Edge to low vol.

This data also ties in with previous studies where winners on average only go -.5 ATR against me. So of course it makes sense more losers dont stay within an ATR move. 

Increasing ATR % tells me winners continue being low vol as well. 

If it starts low vol, tends to stay that way. 

Winners decrease in vol as the trade goes on. 

Losers start higher and drift off slower. 

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

-If I sold 1 strike closer, would have tapped sold strike (22%)  /////   /////   ////

-If I sold 2 strikes closer, would have tapped sold strike (50%) /////   /////   /////   /////   /////   /////   //

-If I sold 3 strikes closer, would have tapped sold strike (65%) /////  /////   /////   /////   /////   /////   /////   ///// /

-78% of wins, I could have sold a closer strike and price would not have hit it.

        -Thats not even accouting for exiting trades if I would have, thats just price at a bare minimum would have hit the sold strike. 

        -AND thats not equalizing for LARGE priced trades (UNH, COST, LMT etc)

        -Trades I have in here like CVS, CHWY, TGT are definitely going to skew those numbers as the ATR is much smaller and strikes with any decent premium much closer.

-50% of wins, I could have sold a strike closer and price would not hit it. 

        -Considering the above with 1 strike close, this number can be larger too when eliminating low ATR names. 

All in all considering the above, selling at least 1 closer strike is very well worth it. 

Now there is an issue here. 

For stocks under $100 I cannot move a single strike or it would tap (8 trades)

For stocks under $150 I can only move it one, never 2 (9 Trades)

For stocks under $200 One trade let me move 3, one 2, one 1. (5 Trades)

So clearly the smaller the price, the less chance I have to do this. 

A good rule of thumb on this then, is if price is above 200 I can at least move it one close, and if under 200 I should not consider it. 

-------------------------------------------------------------43 Wins have this option data available. 

-Options saw increase in vol in favor (if long, call vol++) /////  ////   21%

-Options saw decrease in vol in favor(if long, put vol--) /////  ////  21%

-Options had move vol in favor (if long, call vol > put col) ///// ///// /////  //   40%

-P/C ratio in favor got better each day /////  /////  /   26%

56 wins had this option info available

-Options had larger than Avg Vol in favor at least once /////  //////  /////  ///// /////  /////  ///  (58%)

This is the 2nd time now ive dug deeper into option vol etc. 4th if including previous years. I really still cant see any definitive evidence that there is something notable to track here. 

Having larger than average vol is the biggest variable here but still not that great. 

--------------------------------------------------------------SUMMARY OF TRADE REVIEW

-If price above $200, move strike up one. 

-82% of winners have a 1% in favor day. 

-31% of losers have a 1% in favor day. 

-78% of winners I could have moved strike 1 closer

-The only variable in options that seems to matter, is more/increasing volume in favor of direction

-100% of losers saw -1% at some point in the trade

-Trade down 2% at anytime, warning sign. 

-Taking Trades into D/W 9/20 MA does not seem to matter. 

    -That doesnt mean do it, but avoid if possible. LTF can tell better momentum. 

-1hr 9/20/50 coil spring pops are working excellent for adds

-No 1 MA was clear S/R everytime. The best one, was the one that was clearly acting like it was.

-Winners 4hr 50ma. 15% closed against me.

-80% of W trades had 1hr 9/20 trend in favor at entry

-Fake breakouts are not uncommon. For every range break I get, i should expect at least half of them to come back into that range and close in it. 

-Winners do not breakout a range against me. 

-Losers 77% of the time do. 

-When a MA acts as S/R, 2nd chance taps are add chances

-Keeping in mind where these MAs are (1hr chart open, overlay with 4hr) will matter. 

-I should expect the MAs to trend against and even close against at least once during trade.  

-88% of losers close against the 9dma. 

-A winner does not breakout a range against me. 

-A winner finds S/R in favor at points it should see it. Not all points, but at least 1. 

-A loser finds no S/R at MAs

-When a MA proves itself to be a good S/R point once. Next tap is an add chance. 

-4hr 9ma Trend against is a red flag.

-4hr 50ma Close against is a red flag

-A close against the 9DMA is a red flag.

-Winners decrease in vol as the trade goes on. 

-Losers start higher and drift off slower. 

-Losers are more volatile and break ATR and IV ranges. 

SELLING A CLOSER STRIKE

If winners act a certain way, then I should trade that way to maximize winners. Meaning...

If I can reduce Est Risk.

If winners on average only go .5 ATR against me.

If winners on average only hit 25% of est risk

If winners on average only go 1% against me

If winners on average only go -.2MAE R against me

ADD MORE THINGS FOUND FROM ABOVE WINNERS REVIEW HERE

Then I should be selling closer strikes and cutting as I usually do.

This further increases RR.

Increases Max P

Reduces Max L

Reduces Avg L $$$

Reduces WR

Reduces Est Risk

Increases Max P therefore providing more credit to fund a directional Call Option

On average my winners are sold at 16 Delta. 

Those that are sold at 20 or higher have avg win of $285, compared to all trades at $205, compared to less than 20 delta at $166. And you already know those low deltas have much higher Risk, and lower RR. 

Confidence in your trades, selection, management correlates to closer sold strikes. Not Wider. Wider ignores risk. Sacrifices it for WR.

TRADES BY DAY OF THE WEEK

Day	Trades	Avg ATR Against	Avg MAE R	Avg % Est Risk	Avg % Against	Avg Ratio To Stop
Friday	7	0.10	-0.02	9.17%	0.21%	0.14
Monday	11	0.59	-0.22	22.53%	1.55%	0.50
Tuesday	14	0.50	-0.09	16.96%	1.47%	0.41
Wednesday	21	0.44	-0.20	20.50%	1.09%	0.45
Thursday	10	0.35	-0.22	22.36%	1.21%	0.50

Grok helped make it

Fridays clearly are best performers here. Which makes sense, less time for longer drawdowns. Theta Crush. Nothing really super standoutish here. 

LOSERS THAT WOULD HAVE BEEN WINNERS

Discovered through this review that 69% of my losers actually expired at 0 but took the L anyways. 

First thing I think about is how much would I really risk to hold out for that 0. 

On average Losers were down -$630

On Losers that would have exp at 0, -$700

I have to be really cautious of thinking of changing any thing here.

I just did all this review that told me I should be increasing my sold strike 1 more in favor.

Which of course means smaller win rate.

This secttion off the bat makes me think this is about increasing win rate.

Avg to stop ratio for L exp 0, .91

Avg for other losers 1.02

Avg est risk % for L exp 0 58%

Avg est risk for other L 51%

Avg $ L exp 0 -$405

Avg $ other L -$395

Avg ATR against L exp 0 .99

Avg other L .82

Avg MAE L exp 0 -.58

Avg MAE other L -.51

Avg RR L exp 0 .23

Avg RR other L .33

Avg % to stop L exp 0 3.33%

Avg other L 2.11%

% Ever breach HOD/LOD on entry Lx0 50%

% Ever breach HOD/LOD on entry other L 63%

% Ever breach prev HOD/LOD Lx0 39%

% Ever breach prev HOD/LOD other L 63%

Lx0 stay in ATR Range Day of E   89%

L stay in ATR Range Day of E  63%

Lx0 stay in ATR Range Day 2   94%

L stay in ATR Range Day 2   63%

Lx0 stay in ATR Range Day 3   43%

L stay in ATR Range Day 3  100%

Lx0 stay in IV Range Day 2  41%

L stay in IV Range Day 2    38%

Lx0 stay in IV Range Day 3   64%

L stay in IV Range Day 3    20%

Lx0 stay in IV Range Day 4  78%

L stay in IV Range Day 4    50%

Volatility is a big factor here. That day 2 comes into play again.

The losers that exp at 0 had a much higher rate of closing in ranges than the other L did. Key point here.

Ind Trends, Performance, charts, VWAP, PA, closing action all that favors lx0, but that day 2 is a major drop off again, more than likely what is leading to exiting all these trades. 

First things that come to mind is Lx0 is bad selection trades. Lower RR, more distance to stop%

Other L flat out had worse performance. Vol higher. Closing against. Breakouts against. 

Day 2 action is killer on all these trades. But volatility can be the key to hold out for more.

IRON CONDOR, DOES IT WORK?

So I have my red flags. I have a trading plan. Now I need to check if it would have worked.

If trade hits 2 or more red flags, it is a candidate to put on opposite wing. 

Ex. If long and

    -It closes against 9dma

    -It closes under 4hr 50ma

I now want to put that other wing on.

The spot I sell is the top of that range that rejected.

So now lets check. How often does that work in my favor?

First I need counts. Winners Losers. Again separate up the whole thing.

I made a column that counts red flags.

Lets start with this

Avg Performance Red flags on W   4.0

Avg Performance Red flags on L   6.7

Avg Volatility Red flags on W   1.3

Avg Volatility Red flags on L     1.8

Avg Tech Red flags on W    1.9

Avg Tech Red flags on L     4.0

Avg Red Flags on W   7.1

Avg Red Flags on L    12.5

So for starters. Winners of course have less red flags. Biggest discepancy and where trades get flagged the most is from performance metrics. (MAE, Day 2 points, ATR, % to stop, option value). Technical performance also greatly noticable. Theres only 5 points, so losers on average hit 4 of those. 

8 Seems to be a good cuttoff point here

69 wins 26 losses

Winners with 8+red flags (26)

Winners with 8- red flags (43)

Losers with 8+ red flags (24)

Losers with 8- red flags (2)

Yeah definitely 8

Now for new counts.

W with 8 or more red flags  26

L with 8 or more red flags   24

 If I put on an Iron Condor on Winners that had 8 or more red flags, Selling current weeks range hi/lo, would that trade have worked. 

///// ///// /    42%

 If I put on an Iron Condor on Winners that had 8 or more red flags, Selling prev day hi/lo, would that trade have worked. 

///// /////    38%

 If I put on an Iron Condor on Losers that had 8 or more red flags, Selling current weeks range hi/lo, would that trade have worked. 

///// ///// ///// ///// //   85%

 If I put on an Iron Condor on Losers that had 8 or more red flags, Selling prev day hi/lo, would that trade have worked. 

///// ///// ///// ///// /   81%

Next step is determining when these are applied

The above proves that I can sell that wing at the hi/lo of the week. 

Yes the trade has 8 red flags and I should put on the condor, but when? Where? How?

Becuase even though we get 8 flags. Its still a 5050 if its a winner. BUT it is absolutely a major variable in losers.

So the trade not only has to prove its a problem. It has to stay a problem. 

I dont want to put it on, only to rip back in favor and then take a loss on the new wing. 

That alone tells me I should leg into this wing. Half to start the trade as I see the flags pop and its obviously a problem.

And the other half onces it rejects moving back in favor

        -MA reject, VWAP reject, Prev S/R reject, Failed BO in favor. New LOD/HOD against

I think a better idea is to base that first half off of my technical red flags. 

Winning trades with less than 8 red flags on average have 1.2 tech red flags. Winning trades with 8 or more red flags have 3.

If a trade has 8 red flags and then

    -It closes against 1hr50

    -Or closes against 4hr 50

    -Or closes against 9dma

    -Or 4hr 9ma trends against

    -Or Breakouts range against me

-Put that first half on

-Add 2nd half

Of those 26 wins with 8 or more red flags. 2 of them have 0 tech red flags. 6 have 1. 

Of my 24 losses with 8 or more red flags. 0 of them have less than 2 tech red flags. 

This seems to be the way to go. When a trade hits 8 red flags, we are now on Iron Condor entry mode. When a technical red flag pops up, thats my first in. When it proves itself ugly again (MA reject, VWAP reject, Prev S/R reject, Failed BO in favor. New LOD/HOD against) , add the rest to match. 

The goal here is not to completely eliminate loss from 1st wing. But to offset it a good amount. If its going to be a bad loss, I would be lucky to get half of it back from 2nd wing. 

If its an average loss, It can be expected to cover most of it and turn into a small loss

If I get a chance for breakeven, I can still exit profitably. 

The 2nd wing still has risk. And It can be a big risk if the 1st wing is still correct. Hence why I dont want to get into this 2nd wing to early. 

BULLET POINTS LEARNED

- Increase my RR by reducing my expected risk. Which by my stats, tells me I can reduce it.

- The first obvious fix is pick better setups.

- I do not handle undetermined concrete risk well.

- When facing a loss, adding a new wing of opposite side risk is a way to reduce losses.

- I mainly get emotional/fearful/lost/stressed when I don't have a clear plan.

- Stress sucks. On questionable trades, take it at 90%.

- It is not worth risking that last hour to wait and watch and hope it doesn't get there on trades that clearly have problems.

- When a sector/industry has a big problem, that is reason to take off at 90%.

- When a sector/industry has a big problem, that is reason to adjust stop.

- Most of Bear trade losses came from over ext names that hadn't given a good setup yet.

  - Gap down only to recover, no clear level to breakdown from.

  - Shorted when PB already happened a few days prior, this just meant bulls were holding prices higher.

  - Getting in before prev day low broken.

  - Getting short before stock showed weakness (red doji/shooting star day, 4hr 9/1hr 20ma loss).

  - Chasing gap downs into S.

  - Stock already broke down, distance from 9dma, needed to retrace and breath (chased).

- 70% of long wins had 1hr/4hr momo green and rising.

- 80% of short wins had 1hr/4hr momo red and falling.

- Tight 9/20 DMA continues to work in my favor in all aspects.

- 76% of wins never went past -.25 my est risk (risk 1000, 75% of trades never went more than 250 against me).

- A good rule of thumb to start thinking losing trade and hedge more:

  - Down 25% to est risk.

  - 50% of the way to stop.

  - Sold option 75% against.

  - Stock Day 2 unfavorable action.

  - Stock against 1.5% (This again reflects 50% to stop on average).

  - Stock against me .75 ATR.

- Shorting is working best.

- ATR absolutely plays a role in W and L as well as Strike selection.

- ATR past .5 against me is a warning sign.

- Winners don't typically break prev HOD/LOD.

- VWAP, Close from open, Close from prev Day are most important day 2 metrics for winners.

- Day 2 option in favor happens in 98% of winners.

- If a trade is against me on Day 2, that is reason to put condor on, or consider exiting early.

- Options with largest OI performed better.

- Stats tell me I can sell 1 strike closer than I normally do on stocks 200$+.

- Review has taught me I need to think more in terms of RR than WR.

- If a trade closes against me on the 4hr 50MA, big red flag.

- 80% of winners had 1hr 9/20 trend in favor at entry.

- For every range breakout in favor I get, I should expect half of them to come back into range.

- Fake breakouts are not uncommon. For every range break I get, I should expect at least half of them to come back into that range and close in it.

- A winner does not breakout a range against me.

- Losers 77% of the time do.

- A winner finds S/R in favor at points it should see it. Not all points, but at least 1.

- A loser finds no S/R at MAs.

- When a MA proves itself to be a good S/R point once, next tap is an add chance.

- When a MA acts as S/R, 2nd chance taps are add chances.

- 4hr 9ma Trend against is a red flag.

- 4hr 50ma Close against is a red flag.

- A close against the 9DMA is a red flag.

- 88% of losers close against the 9dma.

- If price above $200, move strike up one.

- 82% of winners have a 1% in favor day.

- 31% of losers have a 1% in favor day.

- 78% of winners I could have moved strike 1 closer.

- The only variable in options that seems to matter is more/increasing volume in favor of direction.

- 100% of losers saw -1% at some point in the trade.

- Trade down 2% at anytime, warning sign.

- Taking Trades into D/W 9/20 MA does not seem to matter.

  - That doesn't mean do it, but avoid if possible. LTF can tell better momentum.

- 1hr 9/20/50 coil spring pops are working excellent for adds.

- No 1 MA was clear S/R everytime. The best one was the one that was clearly acting like it was.

- Winners 4hr 50ma: 15% closed against me.

- Keeping in mind where these MAs are (1hr chart open, overlay with 4hr) will matter.

- I should expect the MAs to trend against and even close against at least once during trade.

-Winners decrease in vol as the trade goes on. 

-Losers start higher and drift off slower.  

-A large number of losers (69%) would have expired at 0

    -Exits primarily due to near stop

    -Poor Day 2 action

    -Poor selection

    -Poor RR

-Fix selection and these will cancel themselves out along with better trade management plans. 

-8 Red flags is threshold for Iron Condor and 90% PT

-Iron Condors cant be placed randomly. They work on a high majority of losers, but not on winners. 

GOALS FROM LAST MONTH

What is Threshold for entering a trade

        -Prem? 

        -Delta?

        -Strike Spread?

        -1:3 or 1:4 Min RR?

    -Moving a strike forward has only just started. I have found I should be trading around 20-25delta

    -Prem cant see a reason there is a staple here. It depends on IV, the stock price, days left to exp, day         of week. Lots of variety here.

    -PA itself is most important factor. All else is just what it is. 

Stop Threshold

    -50% of MAX L hit means its probably gonna fail. Why is it worth holding on to see if comes back in favor?

    -60% of MAX L just bail? 

            -This still gives room to allow vol to cool off, a pb to occur, and range to form

    -'Just Bailing' is usually not a good idea. Exiting these trades based on p/l alone is not enough. Given everything ive gone through this month I can do a bit better

-No exiting in 1st 5 min of day. 

    -Yes

-Partial Exits?

    -Half out on strike break?

    -If add back in, can mean bigger better prem.

    -Major news break means decrease size?

        -Reduced risk which clearly the news increased it. 

    

    -Im not sure this is the right idea. Ive found that while 69% of my losers turned out to be winners. That could mean exiting half on all red flags, and keeping other half on would be benificial. But that would still result in a loss as RR is never greater than 1:1 and review 

    -Partial exits may be too much right now. This review has been huge and a lot of adjustments already being made, not sure adding in exiting early only half size is a good move here.

    -Exiting position means sometihng is wrong and thesis on trade is wrong.

    -I did come up with adding a wing opposite my thesis if things should go that route. Which of course reduces loss should it happen. 

    -Exiting just means cuting off win potential as well. Yes I can add back in, but dependent on other factors means theta crush will kill prem. Only half my trades I closed out with prem lower than what i sold it. So its a 5050. Not worth it.

-Once a trade is 'Gone,' add on pbs to 1hr?

    -Find plan here

        -This is inline with review earlier on hourly MAs acting as S/R. This is a good reason to add when         they do act as S/R

-There is a point on my losers that justifys not being in the trade before it gets to the strike. What is it?

    -MA curl against and loss of VA/Major level

    -Huge OI levels lost?

            -Will go over this is new trade management section below

-Trading plan of

    -.20ish delta to sell

    -Starter with tight spread

    -Add wider

    -Add even wider

    -Only adding bigger risk to winners

    -Adding tight spread on losers is OK as long as PA on HTF is still favorable

    -Do not add to trades that hjave lost all MAs. 

            -As I have found with review, I can move strikes closer. With adding wider means risk increases             a lot faster now. 

            -With close strike, prem spread is wider and more to decay off. Adding same strike now is fine.

-Market is pumping and a lot of my trades are worth adding calls. How can I do the hero trade.

    -I want to do this. I want to make sure what I have now is nailed down.

    -There are very clearly good opportunities for this though. Good breakouts happening. 

-Only 4 winners went past 40% est risk (Risk 1000, 400 is problem) Add this to risk plan, if down 40% and MAs are bad PA bad, HTF PA lost, just bail?     

    -again the 'just bailing' is not great

-Combines Swing Variables and Spread variables for one giant trade log

    -Did it

-Compare June/May MAE stats to July. Similar?

    -Ye they are, more of the same. 

-Avg IV. Anything notables? W v L?

    -Not really in that sense. But deeper level yes in terms of staying in range. Less volatility is better.

-How well are trading plans working?

    -Spread increase as it works?

        -Stats told me no for now. Closer strikes mean more prem, means can add more to the same idea. 

    -Exit plans?

        -Discussed below

    -25 delta?

        -Is the go to. 

LIST OF RED FLAGS AFTER ENTRY

- -1% against day, at any point

-Close against 4hr 50ma

-Close against 1hr 50ma

-Close against 9dma

-Range breakout against me

-4hr 9ma trend against

-No S/R at any MA (9,20,50)

-Breaking ATR/IV ranges

-Industry big trend against

-MAE$ down .25 of est risk

-Down .5 to stop

-Sold Option against me 75%

-.5 ATR against price of entry

-Poor Day 2 Action

-Day 2 sold option not profitable

SELECTION PLAN

-Strike selection if stock over 200 is one closer than i normally select

-Aiming for 20-30 delta.

-No trades where 1h4/4hr 9 and 20 arent trending in favor

ADD PLAN

-Add once it works right away

-Add on pbs that hold and turn up

-Add on MA taps that after 1 time bounce, 2nd time there add on bounce

-Add on pivot breakouts

-Add on Day 2 close if PA is favorable and Option is profitable

UPDATED LOSS MANAGEMENT PLAN

 -If 4hr 9ma trends against, we are now in possible loss territory

-If day 2 action is bad, we are now in probable loss territory

-If we close under 4hr 50ma and the above has happened we are looking at a loss.

        (If the above things happen, almost certainly there are other of the above red flags happening too)

-When a trade hits 8 red flags, we are now on Iron Condor entry mode. 

-When a technical red flag pops up, thats my first in. 

-When it proves itself ugly again (MA reject, VWAP reject, Prev S/R reject, Failed BO in favor. New LOD/HOD against) , add the rest to match. 

-AND look to exit original position early on a pb. Breakeven is a gift. 

-If no PB happens, usual stop methods are still in effect. 

-If trade ever exhibits these red flags, 8 or more, then if profitable by friday, and still showing signs it may reach stop, take at 90%.

    -Do not risk that last 10%

   

NEW GOALS 

-Record / find data on candle type prev day/days.

    -Red, Green, doji, hammer, ranges

    -How many days ago was most recent top/bot

-Split Stats into Long/Short, Range/ Overext

-Do stat review all over again at EOM

-If Winners rarely go X against me, doesnt that mean I should be selling closer strikes?

-What cross stats can I look at.    

    -ATR and Breakout in favor?

    -IV range and Delta?

    -Day 2 favorable action and something else

-Look at Frequent Day % again with bear and bull

-Keep track of red flags and see which align with 4hr MA red flags.

        -A 4hr trend against means we have spent time moving against idea.

        -An atr move or % to stop can happen in a flash and recover no problem.

        -Some red flags involve time, while others are just a price point. 

-Create new tab that shows only red flags and check boxes

-Check past trades if 2 red flags occured, and I sold opp end of range opposite to make Iron Condor work?

-Formulas for Technical Stat review were wrong. Redo near end of month. 

    -W L Bear Bull Flag OverX

-Explore Vega

-Explore idea. When stock is 50% to stop, chances are that also means that option is near 100% against, ATR is around 50% against. Against trade -1%. How are these relatable. 

-Winners with Favorable Day 2 action

    -Ever broke Day of entry hi/lo against?

    -Ever broke Day 2 hi/lo against?

            -If not, can add with strike at that hi/lo

-When a trade hits 8 red flags, we are now on Iron Condor entry mode. When a technical red flag pops up, thats my first in. When it proves itself ugly again (MA reject, VWAP reject, Prev S/R reject, Failed BO in favor. New LOD/HOD against) , add the rest to match. 

        -How is this trading plan working. 

Sad end. Keep planning. Next.