I Don't Have A Trading Plan
A trading plan is a set of rules and guidelines that defines your trading personality, money and risk management techniques and criteria for entering and exiting trades. A trading plan holds you accountable, saves you from your emotions and protects your capital by any means necessary.
However, I don’t have a trading plan for trading options, which is probably probably expains why I exited my long term put options on Square early.
The US Markets have all recovered at least 60% of their losses from Volmageddon in early February. However, I sold my 2018 Leap Options yesterday before price hit my $50 target in Micron Technology and $50 target in Square for a 30% and 31% return.
But price wasn’t at my target yet...there was a reason why I bought long term leap options going out to 2019.
Ah, I know because I initially took some heat, but I wasn’t too concerned. Subconsciously I had a bigger plan for these leap options. I knew that Technology was holding down the fort. So why did I sell before my target was hit. I love converting option trades into calendar spread trades when the price is heading in my direction...this is my option bread and butter set up.
NOTE: The calendar spread options strategy is a market neutral strategy for seasoned options traders that expect different levels of volatility in the underlying stock at varying points in time, with limited risk in either direction. The goal is to profit from a neutral or directional stock price move to the strike price of the calendar spread with limited risk if the market goes in the other direction.
Ah, I know because I took some heat and now was on the positive end of the trade. Why am I even writing this post? Ah, I know because Square has almost doubled in price.
But those 2019 options I purchased would be up 7X. I bet if I had a option trading plan, regardless of the risks, I would have had a defined risk and defined reward. No sweat, the Markets always give you an opportunity as long as you. Case in point, Square gave traders another opportunity to hop on board at the weekly demand level of $45 April.
So why I'm I writing this post, ah I know...PLAN YOUR TRADE, TRADE YOUR PLAN.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Published on
by rollandthomas
Great post. I think Ben Franklin said, “Those who fail to plan, plan to fail”.
Thanks...that quote is so, so true and not just in trading.
I want to buy expecting the last quarter of the year to have a bull run but my plan was to build an emergency fund before risking anything else. Its tough to stick to your plan.
Build that emergency fund, nothing more important.
I will. Thankfully most people have told me stick to it even if I feel like I'll miss the gains.
Hi There, Send anywhere between 1 SBD and 10 SBD to @xoxoone9 to get more upvotes and return on investment via getting high visibility to your post with resteem to whales and minnows!