Goal Setting

After reading a great post by Brett Steembarger, I've realized it is important to establish a few process goals for my trading. These goals are not dependent upon market conditions, but yet they depend on me for accomplishment.

One of the process goals I've set to myself was daily journaling. My goal is to have every single trading day documented, I've set a target of 21 days of blogging, and am glad to report I'm almost there. This week I'll complete 21 days and therefore pass the threshold of repetition necessary to create a habit. So one goal is down, there are a few more to pursue. Here is my list of trading goals:

1) Daily Journaling and Monitoring: I'm there, all my trades are properly documented and monitored, the blog is serving as a great journaling tool, it is easy, fast and allows me to share/inspire others as well.

2) zero execution errors: One too often I found myself complaining about a contingent order that mis-fired, or a trade entry that wasn't properly set. I'll start tracking this on a daily basis with the goal of having 1 full cycle without any execution errors, I can increase this goal once the full cycle is reached.

3) VIPES for every trade: Another goal, is simply to run Dan's suggested Volatility-Industry-Price-Earnings-Skew studies before entering any trade. I'll keep this documented in my journal as well.

4) zero plan deviation: This is the tough one. I have to plan the trades and trade the plan. Once too often I find myself deviating from the original plan and changing things around. So here it goes, sticking to the plan is another goal.

Here they are, properly docummented and I'm committed to them. Will track them on a daily basis.

03/29 GLD Calendar

Trading the Plan:
I've added a 94 Calendar when GLD went above 93. Still in the profit range and time decay will pick up these next weeks.

Probabilities:
With 14 days to go, there is 56% historical probability of expiring in the money, TOS gives me 49% implied probability of expiring profitable. Even though I'm not looking to hold this position till expiration, this gives me some perspective.

Volatility and Dashboard:

We are yielding profits on the trade, shoul GLD stand still next week the trade will get much closer to target.

Contingent orders:

I've protective orders to close the trade at stop loss.

03/29 OIH 36-day Condor

Trading the Plan:
I've cut 1x CALL spread when the position was down by 10%. Bellow is the trade plan. Last week the PUT spreads were closed when they reached 80% of profit potential.

Notice: Once I made the CALL adjustment, I went on Research & Development mode to figure out a better way to handle condors, cutting the spread is not the best way to do it, because it leaves the risk on the table but cuts away your profits.



Probabilities:
With 14 trading days to go, and without the PUT-side risk, historical probability of expiring in the money is 96%. TOS gives me 84% of implied probability to expire in the money

Volatility Cone & Dashboard:
Trade is recovering very well. OIH moving back inside the volatility cone, which is a nice way to bring in profits.
Contingent Orders: Instead of cutting one extra CALL spread, I've decided to simply shut down if we hit -18% ROI

03/29 XLE Double Diagonal

Trading the Plan:
13/03: I've moved 4x CALL spreads from 44 to 48, closed the PUT diagonal and re-opened a PUT diagonal at 41/35
23/03: Moved 2x CALL spreads from 44 to 48 (down 12%)
25/03: Added 2x PUT diagonals at 41/35 and 2x CALL diagonals at 44/52

Now: my next course of action is to shut down if it hits the stop loss. No more messing around with the trade.


Probabilities:
With 14 trading days to go, there is 68% of historical probability XLE will expire between the break-even, TOS gives me 55.50% probability.


Volatility Cone & Dashboard:
The reason for most adjustments to the up-side was the fact XLE moved over 1 st. deviation, violating the cone and forcing adjustments.

03/29 RUT 52-day Condor

Trading the Plan:
Placed the condor with about 52 days till expiration, used .8 delta for the short strikes and plan is to stay in the trade for the full credit. Protective stop loss is at 1.5x the cashflow.

I've studied this strategy for the past 5 years and found it to yield 75% success. The failure happen when price starts to linger outside of the volatility cone. his will serve as my "alert" signal for potential problem with the trade.

Probabilities:
Bellow is the historical deviation study. As you can see, with 33 trading days to go, this position has a 94% historical probability of expiring profitable. TOS gives me 83.4% implied probability of expiring profitable.
Volatility Cone & Dashboard:
I've decided to play a lot more attention to the volatility cone, thus I made it a bigger portion of my dashboard. The other indicators are still there.

Contingent orders:
I'm using the short deltas to determine the approx. stop-loss point. This makes my day-to-day management a lot easier and I don't have to guess where Volatility will be the next morning. Once you tie the stop with the delta of your short strike, the delta will oscilate with the volatility changes. Close trade if PUT delta is at or bellow -28 or CALL delta at or above 30

03/27 All trades update

Short post Today, after all, it is Friday!! Most positions got better Today, only exception is the GLD calendar, glad for the weekend, can enjoy the great weather and the time decay ;)

Bellow are all position profiles:

RUT 36-Day Condor



GLD Calendar

OIH 36-day condor

XLE Double Diagonal
RUT 52-day Condor

03/27 RUT LP

Back in the 19th I entered a LP on my paper trade with the goal of following Santucci's rules. However, I forgot about it until Today. In between then and now I decided to keep all my condors on the "simple does it" diet.. So, my plan for this LP is to simply let it ride untill it gives me the profits or gets down to 1.5x the cashflow..

Bellow are the risk profile and dashboard.