Last month (April 2023) was a rollercoaster from red to green to red again. A couple steps forward, a few steps back. This has, more or less, been the theme of my trading in the last several months and slowly chipped away at my capital, so I figure it’s time to strip things waaaay down and get refocused.
I currently have three accounts that I actively trade in:
- Etrade: longer term swings (I have THREE whole shares of TSLA….RICH) and where I practice selling covered calls on my 100 VRAR shares.
- Think or Swim (TD Ameritrade): my
gamblingI mean, options trading account - Tradovate: futures trading account. Specifically, only MES (Micro E-mini S&P 500).
For most of 2021 and 2022, I bought weekly options (maybe a few longer dated ones here and there, if I could afford it). It worked beautifully for 2021, and then 2022 hit like a truck. Options are incredibly lucrative if you can time it right, and there are lots of different strategies to limit risk. (If you would like to learn about options contracts, I find that Option Alpha has probably the best, most-ELI5 videos about them.)
I never got into the different options strategies (iron condors, butterflies, etc.) because I didn’t have a margin account, and also the thought of accidentally somehow selling a naked call or put and getting margin-called was terrifying to me. So I was focused on betting with (mostly) weekly options, and in 2022, the market shifted. And I was still trying to make “fetch” happen while Regina George (the market) was screaming at me that fetch was not going to happen.
Whilst in my options journey, however, I came across Adam Mancini’s twitter account; I was mostly using his ES notes to try to play SPX weeklies/0dte’s. After putting significant dents in my account playing SPX, towards the end of last year, I decided to look more into trading MES futures. MES seemed like a better fit for me all around: no options theta decay to contend with, still some leverage involved (1 point on MES = $5), and 23 hour trading (6pm to 5 pm…so no more getting trapped overnight by news and unable to get out until the bell). But probably most important, I could better manage risk with MES (my personal experience was that it was difficult to manage risk well with the particular options strategy I was following), and I didn’t need a ton of capital in order to participate (thanks, Tradovate!).
Late last year, I opened my Tradovate account and began following Mancini in earnest. I subscribed to his Substack (which has honestly been some of the best educational bang for my buck) and took (and continue to take) copious notes on his methodology as well as all the free nuggets he drops on his Twitter account. I’ll share a bit of what I’ve learned from Mancini at some point; if you follow his Twitter account, you can largely learn his methodology there. The substack provides daily reviews on the price action from the market as well as the trade plan for the following day, which I have no desire to get into (and also out of respect for his paid substack, obviously); but his Twitter is also a goldmine for learning how he thinks. But also, if you’re on the fence about subbing to him, I highly, HIGHLY recommend it. It’s ridiculously cheap: currently $23/mo! $23!!!! I probably spend that much on Chinese food in a month.
You could say that I’ve become a bit of a Mancini disciple. I think his style of trading is the best fit for my personality that I’ve found so far. I appreciate the simplicity of his approach: price action and level-to-level trading. No complicated indicators (with the exception of occasionally referencing the RSI) and mostly watching the larger timeframes (since following Mancini, I am mostly on the 30 min or 1 hr chart these days). A read of price action requires screen time, so I’m doing my best to put in the time…well, as much as I can while taking care of my little one.
But I’ve been scattered and undisciplined. As mentioned before, I’ll have a string of green days, then get overconfident and gamble-y, and wipe it out completely — either by haphazardly playing weekly options or doing something incredibly silly and noobish like trying to short the freight-train of a rally and getting stubborn about it. In regards to the options: I’ve experienced great success with them, which is the dopamine hit that keeps bringing me back to the casino. But for every profitable options play that I’ve won, I’ve lost more, which sabotages me in two ways:
- it eats away at my capital
- it puts me in a mentally vulnerable state of dealing with a loss of a play that I probably shouldn’t have been in in the first place
So, for now, my plan is to:
- write out my strategy on this blog to bring better clarity/focus to my rules
- finish reading “Best Loser Wins” book by Tom Hougaard
- trade only MES for the next month (if I trade at all; might take a break for the month of May or trade verrrry lightly)
