looking for solicited advice

[dagnyt]

Quote from erol:

That's a delicate balance I have to learn.

Keeping records is important for various statistical and psychological reasons. Ignore that for now:


Here's how I think and it works for me. It may not work for you.


I don't consider the results.

I do not second guess myself - except to see if I made a bad decision: Bad is defined as: was the a better decision, not 'did the decision make or lose money.'

My job as risk manager of my portfolio is to make the best decision I can at the time the decision must be made. I make that decision and move on.

If I made an adjustment, I may have to make another later. But that is a separate decision and has zero to do with the first decision.

I do not hang on to losing trades because I refuse to take a loss. Money is money and I want my money invested in positions I believe will work going forward.

If I lose $$ in position one but earn an equal amount in position two, then I am even. I do not have to make the gain from position one. I do not marry a trade.

Profits represent my money. I do not hold a winning position just because I am playing with house money. It is not house money - it's my money. I hold the position only if I like it's prospects going forward.

Mark
http://blog.mdwoptions.com

 

[spindr0]

>> That's a delicate balance I have to learn. Since it's hard to sit there and watch the price go down, but I believe (when I've been long the call) that it'll come back, and it has. But had I reacted I would have put myself in a more complicated position. <<

There are times when acting is correct and others when it's not. You act because current price action is giving you a PITA. There's no way to know what will happen after you act.


>> Any of the books I've read (granted they're geared towards value investing and long term horizon) preach 'you get killed when you trade often'. <<

I disagree. You get killed when you trade poorly. I trade heavily (for a retail kinda guy). That's what I do and it's what works for me. It's not right or wrong.


>> I was long a 45 ITM Call on CM, and it wasn't moving. So to reduce my exposure, I closed the position about a week ago. Had I waited until today, I could have closed with a small profit after commissions. <<

It's non productive to do the woulda coulda shoulda routine. If it's not an issue that you trade regularly, when you close the position, delete the symbol. Look forward not back.


>> My apologies for the hijack! <<

No need to apologize. No one owns the chain.


Now if everyone would get back from lunch and start moving things around, I could go back to ignoring all of ya!

 

[dagnyt]

Quote from spindr0:

You get killed when you trade poorly. I trade heavily (for a retail kinda guy). That's what I do and it's what works for me. It's not right or wrong.

For the average retail trader (and that's not you, SPIN), studies show that the more often they trade, the worse they do.

Mark

 

[spindr0]

Quote from dagnyt:

For the average retail trader (and that's not you, SPIN), studies show that the more often they trade, the worse they do.

I don't disagree with the statistic since I have no stats to support or refute it.

If one aspires to being the "average retail trader" then one should accept w/o question what the books and studies say. I'm just suggesting that one needs to figure out what works for you... not what someone else TELLS you is the best way

 

[dagnyt]

Quote from spindr0:

I don't disagree with the statistic since I have no stats to support or refute it.

If one aspires to being the "average retail trader" then one should accept w/o question what the books and studies say. I'm just suggesting that one needs to figure out what works for you... not what someone else TELLS you is the best way

Right on!

 

[erol]

thanks again Mark and spin, that really helpful advice.

It's non productive to do the woulda coulda shoulda routine. If it's not an issue that you trade regularly, when you close the position, delete the symbol. Look forward not back.

That's very true... something I have to work on.