Why I came back to trading after quitting for 2 years

My first adventure with Options trading lasted a little over four years.

Which is actually a pretty long time for a newer trader because most newbies “blow up” their accounts waaayyy before then. While I took some heavy losses over the years, at least I didn’t do that.

In fact, by the time I quit trading, I was actually positive on my P/L ... just not positive enough to justify the time & effort I was spending on it.

In other words, I wasn’t able to make it a sustainable income.

There are a lot of reasons, but one of the big ones is the mental struggles I had with losing trades. See, the trading style I used to use was one where I was statistically advantaged by letting winners run and cutting losers off at the knees.

The theory goes that if you can make outsized gains on your winners and minimize losses then you can come out ahead, even if you lose more than you win.

Except, I HATE losing.

I couldn’t handle losing more than I won.

So, I quit.

But when I found a trading system that mimicked the tortoise beating the hare -- one where I could slowly rack up wins and fix my losers -- I checked it out. I admit, I was curious to see how someone could trade the markets and still make good money even in a pullback.

The strategy was the key.

In short, I give up my “moonshots” by putting a ceiling on each trade, but in exchange I get to participate in this slow-and-steady trading that racks up win ... after win ... after win.

I believe the industry average for this type of trading is 98% wins (the other 2% being times when stocks get de-listed or go to zero, a very rare occurrence).

It was that opportunity to almost never have losers which changed the trading game for me.

Reuters

This is one of those background stories that has a large impact that will probably not get a lot of press. The article states …

“U.S. President Donald Trump on Wednesday called on Federal Reserve Governor Lisa Cook to resign, citing a call by the head of the U.S. Federal Housing Finance Agency urging the Department of Justice to probe Cook over alleged mortgage fraud.”

If she is guilty, she should definitely resign. There seems to be a rash of this going on in government (and across the board probably). Integrity is a tough bird to keep caged as our culture has made it almost acceptable to fudge the application, cheat on taxes (just a little) or other “small” improprieties.  

Democracy crumbles under corruption. This is not a partisan political problem, it flourishes on both sides.  We must do what we can each day to maintain our integrity to keep ourselves, our families and our nation strong.

The macro effect is that the President will likely replace Governor Cook with a more “dovish” member who will help lower interest rates.

Comments: Well, we are red like the summer sun. (Okay, it’s not red, but it is hot today!) Nasdaq seems to be pulling back a bit this week, but everything else is just drifting lower. Must be August!

These are the times for rolling positions. It’s Tuesday, and I have already collected the most premium in a week for several months.  Yes, my “Net Liq” is down quite a bit, but patience will probably take care of that. Keep working the framework.

I’m continuing to dial in my new scans, I’m now alpha testing them and I’m liking the results so far. Today’s Premium subscriber sample trade idea can yield 1.12% premium for next Friday’s expiration...