Losing is a part of trading. It is impossible to avoid - categorically. When I see claims out in social media about winning 80 to 100%, I call BS. It is simply not possible over the long term. If you flip a coin 10 times, it is possible to be lucky and get 9 or 10 heads in a row. The probability is slim to none of getting 80 tails in a row if you flip 100 times.
However, we can put probability on our side by having a set system with categorical rules and measuring its performance over a larger sample size. This measurement yields a win/loss ratio of X%. When combined with the measurement of “profit factor,” simply the average gain divided by the average loss over the sample size, we gain a psychological edge over the market.
If you know your numbers, it is easy to take your losses with a smile and say “next.”
The Optionsplayers.com Swing Trading / ER Strategies Group meets every Sunday evening to prepare for and identify candidates for volatility based trades for the coming week based on a strict set of rules. The following was given to our group last week;
Iron Condors Candidates for Upcoming Week
SPY Entry: EOD on Monday, 9 May
Exit: EOD on Wednesday, 11 May
Note – real time alert provided in premium section for Swing Trading Strategies Group
EA Entry: Tuesday, 10 May (Past performance 4 out of 4 wins)
Exit: EOD on Wednesday, 11 May
WYNN Entry: Tuesday, 10 May (Past performance 3 out of 4 wins)
Exit: EOD on Wednesday, 11 May
DIS Entry: Wednesday, 11 May (Past performance 3 out of 4 wins)
Exit: EOD on Thursday, 12 May
Directional Candidates
TGT May20 $235/240 Call spreads, Entry Monday, 9 May
Exit: EOD on Tuesday, 17 May
Results for Winter 2022 ER season (32 total trades) was a 75% win loss ratio and a 2.8 profit factor; Result to date for Spring 2022 ER season (24 trades so far) is 62.5% and a profit factor of 3.74. Tracking is done via TraderSync. Note that two trades are still open - AAPL has profit locked in and TGT is currently underwater; both expire on May 20th.
A list of candidates for the coming week of May 16 - 20th has been sent to a private group of premium subscribers. Opening up this group for additional members is being considered for the Fall 2022 Earnings Season.
Congrats to Green Goose ER team. As ARF mentioned above, I’ve been tracking at daily level and I consistently have one red day per week and it is tough for me to smile and accept it. I spend more time reviewing those red days to do my own lessons and learn then accept my defeat and remind myself not to make same mistake again. Was I being too greedy, what could I have done to save the red day, what could I have done to minimize the loss, etc., then move on to prepare for the next day. I guess I am not a machine or an alien after all, because I repeat the process again. Lol
Sorry Michael, I don't smile when I lose money. But I do accept losing money does happen.
As a day trader I don't care about my # of wins vs losses, I care about how much money I've made since I live off my trading income. It's what's there at the end of each day and each week that pays the bills.
IMO, your group of trades has done well this Spring season. Congrats to you all!