Hey Guys,
The market had a nice little jump overnight. The S&P 500 is around 5,725 right now, which is now a nice chunk above the 5,700 price level. Let's see if it can hold its ground.
I had a number of different positions close since my last email. My Capital One options from yesterday gapped up past the profit target this morning for an oversized profit. But yesterday, my Amazon and DraftKings options both reached their time limits and ended up with losses. I also had mixed bag of results with stock positions that got closed (TRV, UDR, and TSLA).
The timing on when the Amazon and DraftKings options got closed wasn't ideal. If I had held on to them until the next morning, both would have been profitable due to the market's jump overnight. A lot of people might agonize over that, as if they should have somehow known to hold the trades longer for more profit.
But I don't agonize. The reason is that no one could have known with certainty what the market was going to do overnight. So choosing to discretionarily hold a position longer than prescribed is taking a risk. It could have just as easily gone the other way, and if you look back historically, there are tons of times where I got out at just the right time by following my plan, right before the option had a big drop in value.
That's why I love trading based on rules and sticking to the plan. I don't have to agonize over trading decisions. I already know up front there will be losses at times, and I know up front that sometimes my timing will prove to be excellent and sometimes it won't. I also know the back-tested track record historically of this trading approach is very solid . All that makes it easier to follow the trading rules without agonizing over outcomes or missed opportunities.
I took on two new positions today in the stocks account: ZG and WY. There were no new trades yet today in the options account.
If you have any questions or feedback, I'd love to hear from you.