August 24, 2017

Where is the patience?

Yes, I am still holding the SPY position in My Options Portfolio. It is called patience. A term that many options traders struggle with at times. I am currently short the SPY at three different strikes and I can tell you that I am in the red in all three positions. Conviction is key as a trader. Believe in your trade throughout the process until, of course, your mental/or hard stop has been met and then you exit the trade accordingly. In the case of my current position, I knew that the 5/14 overhead gap would be my point of max pain (stop-loss) and a sustained push through that level would drive me to exit my trade. However, that hasn’t happened. ¬†Instead, we have seen strong overhead resistance at the $115 level. Furthermore, we remain in a short-term overbought state.

Check out Serge’s chart as he has similar thoughts on what the SPY could look like in the near future.

I have to remember that only a few trading days ago my SPY position was in the black, so why would I panic. People, forget that this is a marathon and not a sprint. If you think every month you are going to make money then you probably should not be investing in the stock market and definitely not in an options strategy. It is the long-term that matters and with a track record (up 72%) as seen on the Options Portfolio (and verified through my TOS (brokerage) statements) page of the website, I intend to reap the benefits of this long-term approach through my options strategy. If quick profit and day trading is your intention then my strategy is certainly not for you. Of course, I will have some day trades mixed in, but I mostly swing trade.

As I state right on my website:

Patience is the key ingredient to the success of my strategies and forcing a trade is, in most cases, detrimental to any strategy. My strategies requires patience coupled with a disciplined approach. Waiting for the appropriate scenario to recommend trades with a high probability of success is what makes my options strategies successful.

Losing trades are a definite. It is how they are managed over the long-term that proves the success of a strategy and I think I have shown over the past few years that I have managed the strategy appropriately. The performance speaks for itself. Capital preservation is one of the key elements of my strategies and I insist on a disciplined, risk-management approach so that the my strategies will have the best chance at long-term success.

I am a realist. I realize there is no holy grail in trading. However, one thing I do know for certain is that I have found several unique, and concrete strategies that make the world of sense to me and I trade them to make serious money over the long-term. Furthermore, I realize that the less I trade, the better my strategies will perform over the long run: and the long run is what matters. This is what makes my strategies unique and so far, successful.

Anyway, I hope this clarifies a few things.

Enjoy the night!!!