Week 28 - July 13 - Losing Money in Options Trading
- Lost Post using LeoFinance
- Closing Visa.
- Iron Condors - Recently LOSS
- What did I do wrong?
Lost Post
I have been using the HIVe blockchain to post my trades. I tested different editors:
- Leofinance
- PeakD
- Splintertalks
I prefer PeakD, but it loses my post when I've been trying LeoFinance recently! This is not the first time I have experience this! I did not have any issues in the past, but they moved to the newer Twitter GUI, and I have had problems since the latest changes.
So, I will use PeakD until things get fixed/stabilized.
Closing Visa.
Today, I will take another significant loss by closing my Visa position. What happened? The markets moved in one direction, and my Iron Condor was structured with more risk on the CALL side and less on the PUT side. Of course, this was because of my views of the markets, and I expected more RED days. That never happened, and I held on TOO long with a losing position.
Iron Condors - Recently LOSS
Visa was not my only loss. I recently had the same issue with SPY. I waited to long to CLOSE my position because I had a negative view on the markets. I was waiting for the RED day that never came. Therefore my CALLS legs were being "tested" fairly early on. I did not close or reduce risk but decided to add risk in the PUT legs. That "method" works fine if the markets were to revert to the mean and HEAD downward.
For most of the last two months, the markets were GREEN weeks. The markets moved in one direction, and that ended up hurting the position that I had open.
What did I do wrong?
There are several things that I did wrong. I did not adjust my view on what could happen and had a predetermined idea of what the markets needed to do.
I did not use a stop-loss. Therefore I was still in a losing position that only worsened over time. If I closed the position and opened a new one, I could have reduced the pain that I had now.
There will be more losses coming if the markets continue to be GREEN. It will take three months before my positions are more balance. Currently, only the PUTS are making money. I have a few PUT credit spreads making money, but there aren't enough to offset my other positions.
Iron Condors are playing both sides and can win/lose on either side. If the market is flat or stays in a narrow range, you can WIN on both sides. Right now is that MARKET. I will continue to use Iron Condor even after losing money last week and this week.
If you don't know how to manage risk, you will lose money over years or decades of trading. Anyone can win in the short term. My short-term losses are a good reminder that I need to follow a trading plan and manage the trade's RISK. I did not follow the procedure and went with my FEELINGS.
Experiences are good because they are lessons learned.
Have a profitable day,
Solving-Chaos