For the last few weeks, and really all of my trading experience (three years on-and-off), I have been a scratch trader. I do not have any stories of a monterous trade or an account-breaking trade. Rather, I've consistently made a little bit of money and lost a little bit of money. I used to be frustrated by that fact and impatient, but it's part of the process and I should be grateful for it.
Viewing Experiences with the Right Lense
Last week, in particular, I struggled with the idea of being “flat” with my trades. This week I flew to the opposite end of the spectrum. Instead of trading 1/2 lots, I stretched my muscles a bit more and placed Iron Condors with 3-4 lots per side. However, that strategy did not end well for someone who has not mastered the skill of management.
The Home Depot Trade
On Friday, Home Depot ($HD) opened up huge and blew through my alert established at 337.
As HD was moving through the previously established levels of resistance I “morphed” my 340 short calls and purchased the same number of contracts. I did a fantastic job of top-ticking the move up! Right after I morphed my calls, HD retraced back to the level it opened at.
HD tested my level to morphI was shaken out of the move just as the Market Makers wanted… As a newer trader there are emotions of frustration and “should’ve-could’ve-would’ve.” However, there are valuable experiences that can be taken away from each trade.
The Value of Partcipating
Ronchero recently discussed the way traders need to stay involved in trades to become confident and comfortable with certain names. Eventually, that time is going to come where a trader needs to take a swing and bypass their risk parameters from the confidewnce they've developed in trading small.
Consistently entering/exiting trades and learning while staying relatively flat is a good thing. Eventually, the tables are going to turn and there will be a hypothesis that gets tested and hopefully benefits the account.
Growth of Trading the Post
As an intern for Trading the Post, I take great pride in helping support the organization and grow it to a sustainable, effective level. Over the next 16 weeks we’ve developed a plan that is going to help spread the valuable content Trading the Post offers.
For those who are not too familiar with Trading the Post, our Twitter and YouTube will frequently be pumping out content and the Trading The Post website will see much more content.