6 What can I say, I think I am an addict. It is hard to sit at the computer and not be tempted to trade something. This is a bad habit of mine that I am finding hard to cure. It’s like taking a recovering alcoholic to the local watering hole and setting a Shirley Temple in front of them while you’re drinking and enjoying the finest craft beers this fine country offers.
I came into Wednesday with no positions as I closed them all on Tuesday as found in my recent post titled “The Markets and Whiskey are More Correlated Than You Think”. I closed them due to the uneasy feeling of the current environment. I feared the market in both ways as a rip would kill my short delta positions and carnage would kill my long delta positions, either way I expected volatility either way and didn’t want to screw up my mind with wild swings in my P/L. Well Wednesday didn’t disappoint as the familiar morning run followed by selling. But instead of sitting there watching, I felt like I had to do something…and I did.
I put the following positions on:
SPX – May 1310/1305 Bull Put Spread
/ZB – June 147/148 Bear Call Spread
RUT – June 740/780/820 Iron Butterfly
So where do I sit now, I’m down on the /ZB and SPX option trades and positive on the RUT Iron Butterfly, but losses are exceeding gains. Around 1:30 EST I sat at my desk wondering why the hell did I have to get into these. While they compromise a small position of my holdings and I’m waiting for the turn to bull up, I still didn’t need to get into these and I could go into tomorrow with peace of mind.
Even with the futures trading nicely right now (+7.75 in the /ES) I still go into tomorrow with some uneasiness with the SPX trade that expires Friday morning. The market is series of unknowns that the trader controls with risk management. I need to learn to just stay out sometimes no matter how good setups are and take a break, as one has to remember your health is ultimately affected as well.
6 Responses to “An Addiction I Am Trying To Control”
The Fly
unwind it
redman59
thanks Fly, that will be the game plan
zenhunter
“I sat at my desk wondering why the hell did I have to get into these.”
If you have to question yourself like this, you need to close your trade ASAP! Although the position may be a small part of your portfolio, the wasted energy from the distraction practically left you little room to focus on the next productive trade.
There are only 3 ways to trade- long, short, or flat. If price action no longer support the long (or the short; or the flat); then you should get out ASAP.
Good Hunting!
redman59
Couldn’t agree more zenhunter with your wasted energy/distraction comment, and that is exactly what it is. The P/L may not reflect so much but it does create that mental drain for the next opportunity. Thanks for the advice.
A Note on Risk and Following Some Simple Advice to Save Some Money « redman59
[…] from this are risk management and cutting your losses when others suggest so. In a prior post, An Addiction I Am Trying To Control, I stated on hoe uneasy I was about some recent positions I took on in the $SPX and $ZB_F (SPX […]
Sometimes You Got to Ask Yourself… « redman59
[…] Through my experience I have found that when I feel uneasy it has been best to reduce that risk or take off the position. Do I always follow this advice…no, and it has been damaging almost every time. A recent case of my stubbornness that cost me can be found in a recent post titled An Addiction I Am Trying To Control. […]