Trading Journey Review - 13.1.26
This month marks about 1.5-2 months of my options trading journey. It's been a rollercoaster of managing emotions, being disciplined about trades, avoiding revenge trading and so many more pitfalls one has to learn to jump over.
In the first 2 weeks, I tiptoed around the idea of buying & selling my very first options contract- a put debit spread of $DIS. The idea came from a guy on Instagram insisting that Disney would experience a drop in their stock towards Q4 Earnings, and showing his audience his own options positions in Disney Puts.
After a lengthy thought process, supported by ChatGPT and hours on Youtube university, I entered into a $DIS Put Debit Spread. A week or 2 passed and I had closed my contract for a ~$100 profit. That's when my emotions shoved risk management out of the way and convinced me it was time for more profit.
I re-bought the same $DIS contract, 0DTE, without a spread. Yes, a naked 0DTE Put. Needless to say, I lost all my profit and more.
Since then, it's been a journey of spending on Discord Lifetime Subscriptions (Andy.Invests, FPU) and using Bullseye Bots to try to frontrun any run up in options contracts and "beat the market". Deep down, I'm probably trying to make up for the mediocrity that I didn't expect to be facing now.
Having an illustrious academic student life, I definitely imagined myself to be a higher flyer than I am. Heck, I can't even compare to my classmates. I guess trading offered a seemingly golden ticket to make up for the anti-climatic position I am in today. Alas, I am also not naturally good at trading.
They say trading reveals a lot about yourself. It's true- How do you manage a big loss? How do you act after profiting? How effective is your SL-TP brackets and do you stick to them? What if sticking to them makes you miss opportunities?
I've had my SL-TP brackets betray me. Last night, my NBIS contract stopped me out on a dip in the day from $18 Cost basis to Stop loss $14. After my $300-$400 loss was realised, the market ran the contract up back to $20. Had I re-entered at $14, I would've made back my loss and MORE. There are so many instances of this, but this particular position was on the bigger side. It really stung.
After a big losing day/week, I just feel like stepping away from the market completely. My mistake this week was having too much exposure/owning too many options contracts. I had just made my biggest options profits the week before. I got complacent and greedy, and the market taught me this lesson.
So here are my technical and psychological takeaways, consolidated after 1.5-2 months of options trading:
Don't have too many open options positions at a time; Just off the top of my head-3/4 maximum. Make these 3-4 count and you will stomach the risk better, ensuring you make the best decisions.
0DTEs are hard to stay away from; Do maximum 1 per fortnight to scratch the itch. Small position too.
Take profit when there's still profit (I have got no problem with this)
Cut losses early by reducing position size; Leave a runner if you're still optimistic in that position