The two main questions that are concerns traders now are:
- Will the U.S. reach a trade deal with China (and will it happen at the G-20 summit)?
- Is the Fed really going to cut interest rates like the market is predicting it will?
Now, we could get answers to these questions by the end of the month. That said, stocks could trade sideways for the next few weeks.
However, I did manage to make money in my puts in BA yesterday…
Along with members of my chat room:
sold other half of BA in at 4.95 out at 8.40 (plus 3.45) 70% ROI ty Kyle ~Fish R.
BA put out @8.00 from 4.8 thank you Kyle ~ Elena F.
I took 20% yesterday on BA~ Brad. A.
BA form 5.15 to 7.33 ~ Oscar P.
I sold BA yesterday for 20%. wish I hold it lol but my goal was 20% so kinda happy but sad lol ~ Anish A.
While I’m on pace to pass $7M in career trading profits soon… I didn’t start trading options until my 3rd year as a trader.
I know it might seem that every trading strategy I try…works for me instantly… but that’s not true.
For example, two strategies I feel that has a lot of potential are shorting low floats and sophisticated options strategies… however, I’ve not mastered them (yet).
I usually have different accounts for most of my strategies:
And each week, what I’ll do is check out the performance of these accounts. If I’m doing well trading a particular strategy, then I’ll ramp it up. If the strategy isn’t working in the current market environment, I’ll pull back.
I’m looking for ways to triple down on my strengths and cut out everything else that is costing me money.
Now, I understand that everyone doesn’t make a new trading account for each strategy they trade.
Focusing on Your Strengths
It’s a traders market, as many are saying right now.
With all this volatility in the air… the market getting rocked just a few weeks ago… and the FOMC commenting and noting they would step in… to the trade war and the upcoming G-20 summit… now’s the time to figure out what’s working and what’s not.
Now, one thing that I tell all my clients to do is keep a journal at the end of each day, and review the trades and strategies.
The point of journaling is to keep a log of every trade you’ve taken… but if you don’t go back to review your trades, you’re probably never going to maximize your returns.
That said, let’s take a look at how to journal, then figuring out which strategies work for you.
Journaling Your Trades Can Increase Your Chances of Success
When I first started out to trade… I didn’t think this was actually necessary, like most beginners. However, after having a string of losers… I realized I need to start figuring out what my money-making strategies were and what I was losing money on.
In my daily trading journal, I’ll include things like:
- Daily Profit and Loss (PnL)– How much did you make or lose that day when you traded.
- How was I feeling that day – Did I get enough sleep? How was my diet? Did I work out that day? I’ll write down the answers to see if I was just off my game or if my strategies were just not working.
- My actual trades with my entry, exit, stop-loss price, as well as my thesis behind the trade.
For example, I alert my clients about my trades, and it’s pretty easy for me to journal my trades now.
Basically, I have an entry email and an exit email with my thoughts in them… and some times, I do case studies on trades, allowing me to figure out what’s working.
Now, here’s how I would journal this trade.
I bought 20 TLRY June 14 2019 $44 calls for $1.83. This is a catalyst event strategy… and I’m looking for a strong move higher after the company announced a deal that would affect the float of the stock.
I was looking for the stock to move quick, so I had some offers out… an hour later, I sold a piece of those contracts for $3.95 (a 120% gain)… and left the rest on.
What I did right here was to figure out the news quickly and take half off the table when the options spiked 100%+. The second half of the trade I wanted to leave on since I can’t lose on the trade.
The second half wasn’t as stellar as the first half, but I don’t have any regrets about the strategy.
After I have a few trade journal entries like these, I’ll go back and read them… looking to see if my strategies are working… and minimize the ones that aren’t.
You see, if you don’t know which strategies are working and which ones aren’t you’re essentially losing money, and it’s a very quick fix.
For example, I used to short low float stocks and trade complicated options strategies. Those strategies were costing me money… so I ended up canning those strategies for now. I would like to master both of those before I size up in those… for now, I’m sticking with my I.G.N.I.T.E. options strategy, and FDA catalyst trades.
If you treat your trading like a business and figure out what’s costing you money… and what’s making you money… all you need to do is cut the ones that aren’t working and only focus on your A+ setups.
[Ed.note: Kyle Dennis runs BiotechBreakouts.com. He is an event-based trader, who prefers low-priced and small-cap biotech stocks.
Source: BiotechBreakouts.com | Original Link