Hey Guys,
This morning brought us some more volatility. The S&P 500 started up, only to tumble down 30 points. We aren't in a "quiet" period of the market's uptrend, although there is nothing on the chart that leads me to believe we aren't still in an uptrend overall. So it's possible, though not certain, that the uptrend could continue and that patience could pay off.
None of my positions are looking particularly strong right now. A few of my positions hit stoplosses yesterday and ZM and APO are looking pretty unhappy today. I closed my MES futures trade for a profit yesterday. I also closed out MRVL and my ETSY option today since they hit the time limit I imposed. In my extra options account, I have a number of trades expiring today that are being closed out for a loss.
Sometimes things just don't go my way with these trades. It can feel disheartening to see so many losses at once, but what I try to remember is that this sort of case was reflected many times over in the back test. Seeing a string of losses likely doesn't mean that a 20-year back-tested edge has disappeared. It's more probable that it means we're in one of the many drawdowns that are sure to occur along the way.
I bought TWTR today. The options for it were too expensive, probably since earnings are coming up next week for it, so I didn't buy them.
One more note: I mentioned earlier this week that I had SPOT options in both accounts, and that one got filled at the profit target and that the other did not. I was traveling at the time and couldn't immediately investigate. Well this morning when I went in to adjust the exit order for my remaining SPOT option position (in order to manually close it for expiration Friday), I realized there was no existing exit order. In other words, I made a mistake initially when I set up my exit order -- I didn't put the right quantity. Therefore when SPOT reached the profit target, my open positions didn't all get sold.
That's a zinger! On the remaining SPOT option position, I went from what should have been a full victory to nearly a full loss due to that mistake. That swung my account balance 2% in the wrong direction.
Historically when I make mistakes, I tend to obsess over them. And at first that's what my mind wanted to do when I realized I had made this mistake. But then after a few minutes, I decided that didn't sound like much fun. I decided that if I had a choice, I wouldn't spend my life obsessing about mistakes. And maybe I do have a choice. So I flipped the script! I decided instead to appreciate that part of me that wants so badly to be perfect. I reminded myself that my intentions are pure, I'm trading with a back-tested edge, and that in the long haul everything will be alright regardless. I've made countless mistakes in the past, so many in fact that I can't even remember most of them anymore. So why obsess over a mistake that one day might fade away from my memory anyway.
So if you've ever made a trading mistake like the one I just made, I hereby give you permission to forgive yourself!
If you have any questions or feedback, I'd love to hear from you.