BlueWaterSailor: trading journey and journal

BlueWaterSailor

BlueWaterSailor

Just a simple, average sorta guy. Came to the US as a kid, have been playing and having fun ever since. Got into electronics early on, pivoted to computers when I saw everything getting chipped/commoditized. Served a hitch in the US army - infantryman, turbine engine mechanic, military intelligence... a bit of this and that, sort of a preview of how the rest of my life has gone.

Worked at a everything and anything - low-level grunt in construction, senior technician at the millimeter-wave shop at Hughes Aircraft, taxi/limo driver, marine diesel and electronics repairman, efficiency expert, professional instructor - actually, that one stuck; it's a thread that runs through the rest of my working life. Programming at first, security and architecture added on after that, Big Data (everything from ETL to high-level system design and programming) in the recent times.

While all that was going on, I took some time out to bum around the Caribbean. When the job market crashed around 1993, I bought a cheap sailboat with the last of my money and took off for places unknown. In a sense, I never came back: my independent streak, never less than a mile wide to start with, has grown so broad that the only work I'm suited for is where I am the key decision-maker, and stand or fall on my own. Fortunately, between consulting and teaching, the world seems quite happy to provide me with quite a good living, and leaves me plenty of time and energy for doing everything I want to do - which, these days, is trading.

Over the past year or so, I've fallen in - let's call it "quite strong like" - with trading. Not because of illusions of millions of dollars raining down on me within the next five minutes, or pictures of private jets... I'm honestly not that excited by those things. The thing that does excite me, very much, is the match between my abilities/desires and trading: it is the closest thing I have yet found to my need to stand on my own, to rise and fall by my own decisions and abilities. I've spent a bit of time (OK, a couple of days) being bitter about not having run into it when I was younger - dammit! I needed all those life lessons then! - but have settled down to just enjoying the hell out of it now. Yes, losses included... because they teach plenty of lessons of their own (many more than wins do.)

Up until now, I've been keeping a private log of my trades, but based on an excellent suggestion by @sonoma (which I initially thought would be like boasting about my plain-jane trades, but changed my mind after reviewing other people's journals), I'm starting this one.

Items of note:
1) I'm just starting out, and my trades are generally not anything fancy or brilliant. For the most part, they're not about P&L as much as they are learning opportunities for me... although the overall P&L is a pretty good indicator of how I'm doing. Hopefully, it will remain positive as time goes on.
2) The thing that I'm hoping to get really, really good at is risk management. This doesn't just mean using stops on higher-risk trades; it means really, deeply understanding risk - and following the best practices connected with that. That's perhaps the part of trading that really speaks to me more than anything else - and it absolutely does not mean hiding under the bed when risk is in the picture (and it always, always is.)
3) I don't have a whole lot of ego invested here, but I do try my best to manage my time, space, and energy. Positive, useful - even when strongly contrary to my opinions - comments are joyfully and gratefully welcomed; negative idiots and trolls will be ejected without ceremony or any but minor warnings (if I'm feeling generous.) This may well discriminate against folks who are not especially good at expressing themselves, but that's a risk I'm willing to take.

Onward.
 
Got pulled away by trading in the middle of writing my intro and didn't post them as they happened. Will put some effort into doing better in the future.

upload_2019-8-21_14-10-25.png


Some of the above were opened previously and closed today; the SBUX IC hit one of my rules (10% within 1 day, 20/2, 30/3, 40/7, and 50 for anything after 14) and was closed for a nice profit (1.48cr/0.99db.) Ditto AMD (.80cr/.68db) and KSS (.85cr/.75db), which went off in less than a day. GE was a lottery ticket on a slowly-but-surely down-trending stock that got to 33% profit and got taken off. X is still in play, and about 3% down for the day.

The only one that I opened and closed today was the SPY IC, which is a bit of a lab rat: I wanted to try a low-delta, 0-day experiment. Opened it around lunchtime, with strikes that were ~12 delta - by then, the relevant greeks were high enough that it kept jumping around, but it was in that range - then set the stops about 15% higher than max profit and watched the 1SD range jump around and get narrower for a while. When the short strangle got to ~50%, I closed it, along with the long put; the long call had no bids, so I let it expire worthless (and have an alert on just in case it goes ITM after hours - I'll call TS to make sure they don't auto-exercise if that happens.)

A rather pleasant day, with a total profit of $197.
 
destriero said:
Subbed.

My dad sailed all around the Carib. He was docked/moored in Wilmette Harbor and sailed through the St Lawrence out to the Atlantic in his C&C.
More...

Good solid boats, C&Cs - I almost got into one, ended up with a Morgan 453 instead. I've got friends who did the St. Lawrence route - I was actually going to do it when I came back from the Caribbean, but Life Interfered. Furthest north I ever got was Boston Harbor, but spent most of my time between NY in the summer and anywhere from Charleston to St. Augustine in the winter.

BTW: If anything of my trading in the near future smacks of stuff you've posted, don't be surprised. I'm neck deep in learning about VRP, volatility surfaces, and flies - in addition to synthetics and trade decomposition. Probably going to screw it up, but hopefully my (still nascent) understanding of good risk practices will save me from dying.
 
BlueWaterSailor said:
Just a simple, average sorta guy. Came to the US as a kid, have been playing and having fun ever since. Got into electronics early on, pivoted to computers when I saw everything getting chipped/commoditized. Served a hitch in the US army - infantryman, turbine engine mechanic, military intelligence... a bit of this and that, sort of a preview of how the rest of my life has gone.

Worked at a everything and anything - low-level grunt in construction, senior technician at the millimeter-wave shop at Hughes Aircraft, taxi/limo driver, marine diesel and electronics repairman, efficiency expert, professional instructor - actually, that one stuck; it's a thread that runs through the rest of my working life. Programming at first, security and architecture added on after that, Big Data (everything from ETL to high-level system design and programming) in the recent times.

While all that was going on, I took some time out to bum around the Caribbean. When the job market crashed around 1993, I bought a cheap sailboat with the last of my money and took off for places unknown. In a sense, I never came back: my independent streak, never less than a mile wide to start with, has grown so broad that the only work I'm suited for is where I am the key decision-maker, and stand or fall on my own. Fortunately, between consulting and teaching, the world seems quite happy to provide me with quite a good living, and leaves me plenty of time and energy for doing everything I want to do - which, these days, is trading.

Over the past year or so, I've fallen in - let's call it "quite strong like" - with trading. Not because of illusions of millions of dollars raining down on me within the next five minutes, or pictures of private jets... I'm honestly not that excited by those things. The thing that does excite me, very much, is the match between my abilities/desires and trading: it is the closest thing I have yet found to my need to stand on my own, to rise and fall by my own decisions and abilities. I've spent a bit of time (OK, a couple of days) being bitter about not having run into it when I was younger - dammit! I needed all those life lessons then! - but have settled down to just enjoying the hell out of it now. Yes, losses included... because they teach plenty of lessons of their own (many more than wins do.)

Up until now, I've been keeping a private log of my trades, but based on an excellent suggestion by @sonoma (which I initially thought would be like boasting about my plain-jane trades, but changed my mind after reviewing other people's journals), I'm starting this one.

Items of note:
1) I'm just starting out, and my trades are generally not anything fancy or brilliant. For the most part, they're not about P&L as much as they are learning opportunities for me... although the overall P&L is a pretty good indicator of how I'm doing. Hopefully, it will remain positive as time goes on.
2) The thing that I'm hoping to get really, really good at is risk management. This doesn't just mean using stops on higher-risk trades; it means really, deeply understanding risk - and following the best practices connected with that. That's perhaps the part of trading that really speaks to me more than anything else - and it absolutely does not mean hiding under the bed when risk is in the picture (and it always, always is.)
3) I don't have a whole lot of ego invested here, but I do try my best to manage my time, space, and energy. Positive, useful - even when strongly contrary to my opinions - comments are joyfully and gratefully welcomed; negative idiots and trolls will be ejected without ceremony or any but minor warnings (if I'm feeling generous.) This may well discriminate against folks who are not especially good at expressing themselves, but that's a risk I'm willing to take.

Onward.
More...
You've probably got the most realistic and humble attitude I've seen for someone in your position, certainly more realistic and humble than I was starting out. I too have done a little of everything and have done a good bit of cruising (I've got a Fountaine Pajot cat at the moment) so I get a lot of what you're saying. Best of luck and more importantly have fun!
 
Sig said:
You've probably got the most realistic and humble attitude I've seen for someone in your position, certainly more realistic and humble than I was starting out. I too have done a little of everything and have done a good bit of cruising (I've got a Fountaine Pajot cat at the moment) so I get a lot of what you're saying. Best of luck and more importantly have fun!
More...

Thanks, @Sig! I'm not particularly humble - in fact, I'm pretty arrogant^W err, confident about stuff that I do know through study and practice - kind of a teacher-ish characteristic. But I like to think that I have it under control... at least that's what the burly guys that come and wrap me in these long-sleeved shirts tell me when it gets out of bounds.

Best of luck to you as well! (And - hell yeah, this is fun. Learning, and getting better at it, just sets me on fire.)
 
Take-home from today's trades:
  • Closing the wing(s) on that IC was a brain fart that cost me $20; they were going to expire worthless, and even if either one went ITM, I could call in and tell TradeStation not to auto-exercise. Won't be doing that again... I suppose I should be grateful for the cheap lesson.
  • I need to learn how to exit trades better overall; right now, price discovery aside, it's a bit too mechanical - but then, I haven't put a lot of thought into possibly smarter exit strategies.
  • On a related head, there doesn't seem to be an easy way to do trailing stops on options in TS, but maybe I haven't searched well enough. Should also look into whether a macro will do what I need.
  • Started on researching delta hedging a bit ago, got the basics, and... let it drift off. Need to put some effort into learning when, how, and where to use it, which is a different kettle of fish.
The bed is calling my name, and I must go.
 
The short put I had open in HRL just closed for 50% after 7 days:

HRL @ 42.15 BTC 40P 20SEP
0.85cr/0.40db

Strategy-wise, I'm running the wheel on a set of stocks that I've done some (amateurish but painstaking) FA on as well as a few ETFs that I like. So far, I've done pretty well except for some thumb-fingered mistakes, like trusting the P&L numbers in TS (bad idea after you've done a roll.) If the trade doesn't reach that point by a week out from expiration, I'll either 1) look for a decently-priced roll or 2) accept assignment, then sell calls on it. The latter hasn't happened yet, so I'm just collecting premium in little chunks here and there. A decent little process that puts a few bucks in my pocket while I'm figuring things out.
 
XBI @ 82.01 STO 80P 30AUG 0.64cr

Today, XBI made a largish down move, then bounced and stayed flat for several hours - so I sold at a strike well below recent history (over 80 for ~3 months now) and with a B/E (79.36) below the max negative expected move (79.73.) The IV will not feature in my wet dreams, but it was about average for that ETF.

The EOD selloff took XBI down by ~0.60. I guess the market's already priced in the most likely News From On High (6237', according to Google) and is now reacting with mild ennui.

Again, like most of my trades, this is an experiment. What does gamma actually look like when it's at home? Will the awful, terrible, no-good vega beat me down and do immoral things to my prostrate body? Will heroic theta save me at the last moment and bring me a bowl of chocolate ice cream? Inquiring minds want to know... and develop a feel for good option prices.
 
Another 12-delta, 0-day IC in SPY, with VIX at 20.88. The Chinese tariff drop already happened this morning and the price of SPY seems to be fairly steady, so I'm giving it another shot. Initially skewed by one stop toward the put side due to mild but consistent downward trend; I plan to hold this till expiration.

SPY 10 lots @ 0.17cr, +283.5/-284.5P / -290.5/+291.5C
Stops on underlying at 284.25|290.25 TTTN (max loss ~1:1 of max profit)

Yet another experiment: since I noticed that the long wings go to 0 as time passes, I've set the stops only on the short strangle (i.e., buy only the shorts back if either of the stops gets hit.) Seems like it should be OK, but would really appreciate comments if I've missed something here.
 
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