This is a new branch for my blogging attempts (my other branches definitely need significant pruning). But this branch is going to focus primarily on my Options Trading experience.

At this point, I’m definitely classified as a neophyte trader. I’ve been interested and intrigued for many years over the market analysis and testing options’ technologies, but only pulled the first trade trigger in March of 2018. This blog is meant to be a diary of sorts – primarily for me of my trades. I need to document what I do so I can learn from my mistakes.

My long-term goal is to do enough successful trades to make an average of $2,500 per month. It is ambitious and could be quite expensive, but it’s all about the journey.

I plan to work towards this in 3 phases:

  1. Paper Trades Only 
    • Until I learn the mechanics of Options trading, the basics rules of personal behavior and the beginnings of the market’s characteristics.
    • This was marginally achieved from March ’18 through June ’18. Through this time I could have lost my 401K twice over. Luckily it was just make-believe money. 
  2. Low-risk trades
    • I’ve begun low-risk trades starting in July ’18. My start was to risk no more than $200 per trade and no more than $1,000 total open trades at any one time. I will spend the next several months pinging off the walls, but I hope to settle on a risk/reward ratio that is tolerable.
    • During the first two months of this stage, I made near $1,000 profit. Dam I was giddy. But Oct through Dec had a market correction of nearly -15%. By the end of Dec ’18, I collected a total of $86 in premiums and paid over $600 in fees to Ameritrade. My 2018 foray into the world of Options Trading cost me -$548. Not a good start, but I did learn lots. 
    • As of today (June 7 ’19), I am still in and will remain in the Low-Risk phase. I will stay here until I can prove an annual profit of at least $5,000.
    • What I’ve learned so far is that I still have lots more to learn. Future posts will have overviews of P&L, trades and new rules.
  3. Progressively higher risk trades
    • This is somewhat undefined at this point. But once I expand my list of do’s-n-don’ts then this phase will be a slow rise in risk for a better reward. I won’t start this phase until my confidence, knowledge, and profits are much higher – than could be years.

The format I plan to take on this blog is to make it a weekly activity Status Report. Although I’m sure the layout will change over time, now I’m thinking this…

Overall P&L status:

  1.  Current Month-To-Date Results 
  2.  Last Month’s totals
  3. Year-To-Date standings

Current trades status:

  1.  Analyze the trades that ended the previous week. If they failed – why. 
  2.  Review the trades currently in the hopper. If they are moving in the wrong direction, I’ll try to identify what is going on in the market.
  3. Stage new trades and identify which are the best to submit. 

Some rules to trade by:

  1.  Daily rules to review
  2.  Make notes of Market’s characteristics that I have learned

Ok, we’ll see how it goes… See you next week.