tag:blogger.com,1999:blog-973587304515257848.post1470213471298115122..comments2024-02-11T00:12:56.047-08:00Comments on IN THE MONEY TRADES: The Value of being WrongAnonymoushttp://www.blogger.com/profile/02083421527404780093noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-973587304515257848.post-42403009999021583092010-02-09T09:13:45.096-08:002010-02-09T09:13:45.096-08:00I can tell you from my experience that all the rul...I can tell you from my experience that all the rules you want to implement are only as good as your discipline to stick to them. This is my area of weakness. I have a history of just putting a trade on within seconds of seeing something I like, especially if I've been sitting in a lot of cash for a long period of time. I don't know if its built up demand or just lack of fear that allows me to just put something on without an in-depth analysis.<br /><br />I too had posted about being bearish and was calling for selling call spreads or buying put spreads, then I went and sold ATM puts which is essentially getting long. This is inconsistent with my current feeling on the market and perhaps could have been avoided if I had gone over my trade checklist before I put on an a new position. Since the spur of the moment decision making has been something I've always done, it's going to be hard to change that behavior. So here is a public notice to call me out on anything I put on that is contradictory to what I've previously stated, or just feel free to ask what my particular motivation was on an individual trade. I know that I often just list the numbers behind a new trade but don't comment on it.<br /><br />I agree with your comments of staying with a small size while you learn the ropes. I have some concern over your proposed trading rules for two reasons. The first is make sure you're implementing a rule that makes sense going forward and not something that would retroactively make your numbers look more comforting. Example: what if you had been up 20K but then lost the same amount on your recent trades. Would you still be thinking about the same rule changes for yourself? The second concern is as you've commented before, the markets are extremely dynamic, you might have valid reasons for changing direction on short notice. I'm worried that a self-imposed rule could disallow you from even correctly acting on your own information. <br /><br />As time goes on I think you stick with the basics when managing your money. Which for me are to stick with trades that you understand, go with position sizes and risk/reward relationships that reflect your capital standing, have predefined exit points that are only altered for a valid reason, and then just try to keep calm and not make snap decisions. This all sounds so easy but I have not been effective at it.Jason Haashttps://www.blogger.com/profile/08138027111150684908noreply@blogger.com