We had a wild, high volatility week since 2012. VIX reached 31 and closed at 22 by Friday. Most of my bull puts spreads in SPX and ES naked puts were underwater during the week. I took stops of SPX and ES for this week's expiration. It ended with $620 loss for the week which is acceptable. Even with Friday's big run up the SPX/ES are still below their 200 SMA and BB/M daily. The run up was sold at FIB 50% RT yesterday. Bears have a shot to run it down for next couple weeks or let it up to Fib 62%. On the bright side, ES/SPX closed above 50 MA on weekly chart. This provided support for the last few pull backs. Only time will tell if it will hold this time.
Grains continued to move up in small paces after last Friday's USDA report. This unexpected movement eroded most of my profit in puts. I was so stubbornly believed there was going to be new lows after the report. I didn't believe what I saw in the move up nor was I prepared to take actions to protect my profit. I didn't have a 2nd scenarios and action plan in place until Wednesday. By that time my only goal was to break even. My stupidity cost me at least $5000 and turning a very profitable holdings to losing. I thought about taking some chips off table before and right after the USDA report. My greed and the desire of revenge held me to admit I could be wrong. This losing event combine with the summer's big loss in grains really affected my confidence in trading success. I know the issue is the courage to take hard stops but I have not been able to overcome it time after time. Do I want to become successful in this business? If the answer is yes then I have to take hard stops no matter what. Not to come up with different solutions or ideas every time when I need to take stops. If I can't do it I will be better off to quite it now to save my capitals.
My plan for next week:
1. Have at least two different scenarios and action plans for each market I am trading. Be clearly identify the levels for confirmation of each hypotheses in play.
2. Practice to change my market views base on what is happening not what I believe will happen.
3. Ready to take hard stops at 1.5 to 3X loss. Stop first and recover orders later.
4. No add on to any losing positions. Only rollover or leg up/down are allowed.
No comments:
Post a Comment