this is kind of a random post, but it's been on my mind this week, just thought i'd share this....
the reason for me posting this is that in the past 3 weeks, I have missed out on what would have been huge plays. I'm talking a few hundred bucks into $10k or $15k.
okay, since i finally developed my "system" for trading options, I have to say it has just been awesome. now, i have to say also that my system wasn't completely figured out until the end of may probably. up until that point, i randomly picked options to trade, and I randomly picked when I would enter. when i started trading options at the beginning of february, I have to say it was blind luck that caused me to pick and trade options that made me just over $10k in 5 weeks. I don't know how that happened, but it did. my random choices for options plays made me a lot of money, and I was over-confident with how "easy" options trading is. after that, I quickly gave back most of those profits because of my lack of knowledge and lack of having a system to follow before entering a trade.
I knew I needed to make a change, and develop a trading system with checks and balances before entering a trade. so I literally spent probably WEEKS worth of time studying charts and finding what works and what doesn't. this month, while following my system, there have been ZERO trades where I couldn't have taken at least SOME profit. that tells me my system works.
however, sometimes it's hard to follow your system completely. this is mostly due to letting too much emotion into my trading. when I cover all the checks and balances within my system, it's very hard to lose money. but there are always those times when we let our emotions lead us into trades.
when I follow my trading system (that I've used and I know it works) I can make money. but those times when I skip a step or two and enter a trade, I end up looking at what I did and question why I even put myself in that position in the first place. those are almost always losing trades. "if i had only looked at it this way..." or "why didn't I notice this on the charts...". those have been my bad trades.
the main point is this: once you've discovered your system, and you find that it works, you need to trust it. when I get into a trade before making sure it is the correct setup, it has resulted in plays that either make very little profit, or it gets me into trades where I have to go back and forth, "do i sell?" "well, i'm not up very much profit-wise, maybe I should hold" or "wow, I was wrong on the direction on that trade....". but when I trust my trading system, so far there has always been an opportunity for profit.
the issue i've had the past couple weeks is that I've seen trades that cover all of my criteria for a "good trade", but it's the bad decisions I've made through emotion that get in my way. the bottom line is this: you have a system that you know works, and as long as you go through every piece of criteria within that system and everything checks out, just trust it. not doing so over the past couple of weeks has caused me to miss several absolutely huge trades; all because I was hesitant because of trades I've done where i didn't completely follow what I know works.
find a system, make sure it works, follow that system completely (dot every i and cross every t), and trust that it will work.
that's about it.....
