My plan of deleverage and retreat from grains has finally paid off. Feb realized gain is $19.7K vs Jan break even. It's a good start of recovering and still has a long way to go. The key lessons are the same: 1. manage risk begins before entry; 2. Be patience and disciplined.
I have been reformulating my indices options selling program, gradually adding Karen's style trading to my portfolio. My plan is eventually switch majority of my trading portfolio to Karen's style which will spread out my holdings to a longer period with evenly distributed incomes. My mindset for entry has not completely switch to such style yet. It shows on entry selection not giving enough considerations in the DTE. For example, It's likely for indices to retread 10-15% in 45-56 days in 3-4 times a year. I may not have enough room to fend off such type of correction especially if my entries were done during a low volatile period. I need to do more thinking and study for such scenario. In theory 3-4 times losses per year could wipe out my entire year's gain. I need to have a plan for the worst case scenario. Would it be safer if I change my trading approach back to sell short term (20-30 days) first, then add Karen's style only during the volatile period which I can get more premiums and far OTM. Also maintain my leverage level at or below 1.5 which means to use 50% of my margin.
Grains stayed in consolidation most of time during this month. I am still exposed to losses in wheat. It may last until this summer. I will stay out of soybean trading due to the leverage/return ratio.
March may be a different market than Feb. I will spend some time to study March Madness effect. Grains may be more active as well.
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