tag:blogger.com,1999:blog-973587304515257848.post5024294407917752734..comments2024-02-11T00:12:56.047-08:00Comments on IN THE MONEY TRADES: A few things I am consideringAnonymoushttp://www.blogger.com/profile/02083421527404780093noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-973587304515257848.post-22145409437315362842010-03-18T21:45:20.910-07:002010-03-18T21:45:20.910-07:00I agree it is really important to have a road map ...I agree it is really important to have a road map in place. But like you said it will always need to be revised because there will be things you do not consider when formally writing it becuase you either did not think about it or you just don't have enough experience to consider it yet. It will always be a working document. But my goal is that I will eventually get to something that only requires little tweaks here and there. Meaning I will not have to re-invent the wheel from scratch.Anonymoushttps://www.blogger.com/profile/02083421527404780093noreply@blogger.comtag:blogger.com,1999:blog-973587304515257848.post-21644672667729181542010-03-18T11:27:52.733-07:002010-03-18T11:27:52.733-07:00My thoughts are that the formal policies you are s...My thoughts are that the formal policies you are setting out are really for yourself to use as a guideline and not set in stone requirements. A year ago your policy might have said you were strictly an equity day trader, obviously things have changed. At the rate things have been changing, I think you should probably review your policies monthly for updates/changes. <br /><br />Obviously different asset classes or option strategies have different risk/reward characteristics. I think setting a basic risk/reward threshold for particular strategies like an Iron Condor or long calls/puts is a good idea, but I would also keep in mind that each position is actually different. Your long SPY puts at a 111 strike I think, those you might be willing to let go to 0 as they are a hedge. Long speculative/directional puts are probably a different story and I would agree with your post that if they move against your opinion then you cut losses rather than watch them go to zero as I've been guilty of in the past. So each is a long put, but each has a different objective behind them. <br /><br />On the issue of scope, I think what you're getting at is you want to kind of formally tell yourself what to focus on rather than constantly be pulled in many directions because there is so much to chose from. I struggle with this myself. I don't think its fair to say there is a right or wrong as far as how you limit your scope. If you said you were only going to follow 5 names I would say that's too limited. If you said you wanted to follow 200 I would say that's probably not efficiently possible. <br /><br />This is something I'm going to try and define for myself as well come June. I don't have the time or interest to try and trade or follow everything. I currently have no interest in currencies or bonds, I'm comfortable with equity options and find no limit on trade ideas. I'm kind of leaning towards following 20-30 names religiously and then seeking outside ideas for other exposures. Since we both agree that idea generation isn't hard to find, I think setting an overall portfolio strategy is the first key, then limiting or picking through ideas to match the strategy. I'm kind of making some mental notes to myself and will get around to trying to make something formal in June, then of course revising constantly I'm sure. But I do finally understand the importance of at least having a road map. I think it will help limit the anxiety.Jason Haashttps://www.blogger.com/profile/08138027111150684908noreply@blogger.com