Tight stop is the right stop

Overall I like how I traded today. I left some on the table for making the right call with too-tight stops, but I know that giving too much room and turning to "hope trading" is also how I lose a lot. It's better to take the small losses and move on than to experience big losses and toxic problems.

Psychologically, I am aware that I am very affected and prone to tilt whenever I have any loss. Combine with, when I close a trade, that money is locked for the day (cash account) and I used to try to hold so I wouldn't "waste" the chance of that money. That was leading to big losses and too-often tilting. Ex: if I'm trading 0dte, I'm probably on tilt. Tight stops have a dual benefit - keep losses small (less/smaller tilt?) and also, yes, lock out that money to stop myself from going bonkers. 

I often contemplate whether it's better to take a few really big positions (3?) with my allocated capital, or several small positions. Current thinking is to trade bigger, take my gains and/or losses and be done. The more times I trade the more opportunities to do something dumb and the more likely I'll end up trading after my setups are expired. Get in there, take my money, get out! Go have a nice day!

I love trading TSM. It's often a real big winner for me and today it also paid. Nice breakout above a LT level. TSM gave an initial long, which I gave no room bc AMD and NVDA tanked simultaneously and the market was very volatile off 8:30 CPI number. Took a second trade with a strong bounce which I also traded tightly. 

Third TSM trade, I tried for short on this breakdown pattern that I'm often early to. Today again, early. I gave it that room and got a skinny target, but I tightened too much for the real flush. No regrets on that. 

BABA daily is very extended. It didn't make new premkt highs along with the CPI number and maybe it ran out of steam. I like how I entered, but should I have given it room to bounce (see TSM above)? Probably not. Got stopped out and missed the move I wanted. No regrets here bc I was shorting a stock that has been outrageously strong over several days and was still inside yesterday's bar. Can't mess around there.

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After a ndh and ndl in the opening session, TSM (and the market) has been full bull. Not my money! I'm getting other things done now (SDS... SB... call after call...)

Trader interview featuring me

In November I was featured as a speaker by the DC Traders Meetup. The video has been posted.

  See it here

0:00 into / overview / risk warnings

12:00 options scalping rationale and mini lesson

24:50 Beginning of me describing my process, overview

34:10 Example of my workflow

39:30 sample trade progression

48:00 quick hit trade reviews

1:04:40 Q&A

All eyes on TSLA

TSLA was the only trade I loved today. I love that daily pattern for a continuation up. Lots of eyes on TSLA. Wanted the followthrough today.

Started by watching intraday levels. I don't mind the few losses I took on starters. I was pre-empting, so starters are the way to go. In retrospect, it seems silly to have tried the puts, but it briefly seemed like TSLA was going to reject vs break the level I wanted. 

Finally TSLA (and the market) started to firm up and I was able to get a good add. I also went farther otm (much smaller/lotto) in case I could get a real flier today. 

When it finally did the beauty run I was hesitant to take targets, especially after the initial losses. Wanted redemption of losses. Wanted 🤑, but I must capture the bread and butter even if I'm still in the red, so I took that pl target. Each trade must be managed on its own, and not in light of what other trades did to me. Also pained me to take that second (squeezed) stop, but that is clockwork and clockwork works. Follow the rules!
I still had the flier in case of launch, but even without the lottos I was back in green at that point with just simple clockwork.

More proof I must stick with clockwork, is how I exited on the downside. Everything I was watching inexplicably topped around 10:25. SPY never even made ndh which is a yellow light on breakouts. I skimmed out of the flier (130 calls) position on the other side. I hated every moment of selling because I dreamed of 128 and 135 targets, but after the fact, as it continued even more downward, I'm glad to be out.

LESSON - The ~66% gains on the otm options were the same approximate dollar gain as the ~20% gains on the atm options because of the difference in cost. Yes I had to deploy more capital for the gains on the atms, but also otms are more likely to dissolve in my hands vs get these gains.
Example:
123C : cost 3.18 : 20% gain=$64 each
130C : cost 1.02 : 66% gain=$67 each

I have studied this before and concluded it is generally better for me to stay at the money. Even though I can get more contracts otm, the position loses value faster in absence of a big move. Losers are bigger, but winners aren't necessarily bigger. Otm is only good for a lotto type play, small size that I could lose entirely, and needing a really big move to get the payoff. It is not psychologically good for me to be always trading on lotto for the same reason it's not good for me to imagine every trade is a homerun.

Please just stick with clockwork. This is a great example of listening to what IS happening and making a great day after of initial losses. If I had held against hope, that is wishing. Trading is not wishing. Consistent profitability is following the rules like clockwork and getting MY money.

Whatever happens next is not my trade. I made good money today., Closed all exposure by 10:35am. Now I go have a great day doing other things with my gains locked in. That's also clockwork trading: grab my money and go have a day, sleep well at night. Don't sweat the market all day and night.

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Over an hour later, if I was still in this, I would be sweating and obsessing. But instead, I've had a nice morning of journaling, logging, and chatting with trading buddies.

Afternoon trading

 Travelled home this morning, so looked for some trades in the early afternoon. Market looks decent, but I am not used to trading the afternoons. I used super tight stops. 

Ironically, the trade that paid the best was the one I was late to. Found V using the R-vol screen on TradingView for 5 min relative volume. I don't really want to trade afternoons, but I'll keep that in mind, maybe even for late morning.

Even so, I made pretty good gains in about 45 minutes on a day I wasn't sure I'd get to trade at all. Feels like free money.

market trend day, finally!

 FINALLY!!! This range has been tough to trade. Lots of gorgeous action today. Raked it in!!! Exactly what I need to do on a market trend day.

Market breakout day, push on longs today. Jumped too early into NVDA (chased) and didn't get my stop in fast enough. LESSON: if I'm going to chase, put the stop in first! Added as it rounded the bottom. Tight stop as it retested day high and took a loss but got back to better size. Then trade "normal": zigs no zags. Got such nice gainer on the add.

Tried a small UBER and got a smidge out as it pulled back and stopped. The daily setup is overextended, but in my platform the intraday price/volume/level setup seemed ok. Didn't power up the way other stuff is powering, getting somewhere around a 10-13% gain for me, which I didn't take. Tightened stop and dumped it, eating the spread.