Last week I lost 3 points (-$150) on my $ES weekly options trades and made 36 points ($1800) on my $ES futures trades. Commissions cost me about $325.
Despite making a good amount of money (for me anyways) this week was a complete failure. Why was it a failure? Because I strayed from my process and was focusing on the outcome of my trades. Three weeks of good gains made me complacent. The process dictated that I close down my options trades Tuesday evening, and since I didn’t do that I had another good opportunity on Thursday evening, but I rolled the dice and sacrificed good gains. What inevitably happens when someone continues to roll the dice is that they lose money in the long term. I made decent money this week, but I could have easily given back all my gains from this week and from the past week or two.
By Tuesday evening I had a return of almost 30% on the credit received on the weekly options. This was a perfect opportunity to close down the trade. Given the recent average weekly ranges, it was almost certain that the limits of my strangle would be busted, and they were. I didn’t set a good example this week, but hopefully someone reads this and learns from my mistakes.
S&P500 Emini Weekly options (expiration Feb. 26th) trades are shown in the table below. I tried to color code the opening and closing of trades. Also, the white rows are options that expired worthless:
I did much better with the futures trades and stuck with my process and honored my stops. I was persistent and continuted to take trades near percieved levels of support, even after taking consecutive losses. This can be very hard to do for a new trader, and I can say I’ve learned many hard lessons by not taking trades after taking a loss or two, only to see those missed trades go my way. Losses are inevitable but you have to stick with your process and take the trades.
Long trades taken were initiated at percieved levels of intraday support and the short trade was taken based on anticipated resistance from a trendline (see image below).
A summary of my S&P500 Emini Futures trades are shown below: