A years worth of trading and learning condensed into as few lines as I can write.
Had 5 days off to go skiing but was 70 on Wed and raining since, not good for skiing so am getting my taxes done early this year. I review every trade from the previous year so here are some lessons I learned, a few of them the hard way.
SVXY was my biggest winner until it became my biggest loser. Don’t hold unhedged short volatility. Probably better to use spreads or just buy VXX puts. Even if I had just left the #fuzzy would have limited my losses to 5 k.
#pietrades are very effective but occasionally get one that you have to roll for a long time and ties up a bunch of capital. You can eventually roll it for even or a profit but I think there may be a better way to avoid that but have not discovered it yet. I will be looking for the happy medium between tasty trade 45 DTE and 1 week with #pietrades to see if I can avoid having to roll as much. Recent segment on tasty trade says 30 DTE may be between them. Maybe I will start some positions there on Monday.
Managing winners really is more important than trying to save a large loss. Had I just closed SVXY at the end of the day when we were sitting at 70 I would have broken even. Instead now have 70-80% to make up loss.
Diversification is good, but once above about 10-12 tickers, tends to water down returns. I will be trading the same names a lot more this year.
CC can make more than naked puts because of the additional capital gains and skew built into some names. I will be doing more balance between CC and put sales.
#fuzzies are a good way to recover a position that really went the wrong way. Less capital at risk and if set up with a hedge limited risk. However, they take a while to repair a really bad trade. Months in some cases.
As much as I try and have the tools, I just can’t make directional trading work for me. Don’t have the time when I am at work and when I am at home don’t want to sit in front of a computer. However, timing the option sales improves returns and winning percentage. Will sell options more often at the pivot points going forward.
Selling options beats the crap out of any other trading strategies I have tried over the years. All my good trades (except SVXY) started with an option sale as the beginning of a position.
Look at positions instead of a trade. You may lose on sales the first 4 weeks but with recovery eventually can get out with a profit.
Weekly options make adjustments a lot easier.
My fellow bistro’ers gave me a lot of ideas that ended up being profitable. Thanks! 🙂
#spycraft also works and thanks to @jeffcp66 for showing me how to roll credit spreads, however, make sure it is in an account that can handle that. Tradestation cannot which is where I was trading those and with the run up the call sides were taken out but they would not let me roll. TOS fine so will be firing up some spy trades again soon with the TOS accounts.
Keep the ideas rolling, looking forward to trading with everyone again this year and maybe we keep a 2 sided market for a while 🙂