HowardCohodas
Experienced member
- Messages
- 1,868
- Likes
- 97
Introduction
I trade index options credit spreads and form Iron Condors when market conditions permit. The primary difference between my methods and the methods popularized by others in the use of new tools recently available and a more aggressive management strategy to turn trending markets into additional profit rather than a loss. More specifically, I use probability of touching rather than probability of expiring as my proxy for the chances that the spread will fail to produce maximum return. And I roll spreads as they near maximum profit if new spreads are available that meet my credit goals and are within my risk parameters.
The Journal
This journal is identical in content to the one I keep for my own trading. It is slightly different in format due to the limitations of the forum presentation. This journal is more than a record of trade entries, adjustments and exits. It is also a record of the good, the bad and the ugly for these transactions. Did I follow my rules. If not, why not? Did I mess up execution. If so, what am I going to do to prevent it from happening again. Did things work out as expected. If not, are rule changes in order or is it just one of the chance occurrences we are prepared to endure.
Given that it is identical, some background to my practices is needed to interpret the information.
There are two key parts to a trading system; the strategy and the trader. Each must be a good performer to achieve trading success. And each must be continuously assessed to assure top performance. The journal is used for both of these tasks. The journal is all about quality assurance. Evaluating the strategy and the trader for any degradation in performance so that action can be taken before serious damage is done.
Journal Analysis
The journal is meant to provide analysis in three time frames; tactical, intermediate and strategic. The same daily information is used but summarized and formatted differently for each time frame. I keep the entire spectrum of time frames in mind when I create the journal entry commentary.
Once a trade is established, actions can roughly be divided into two categories; taking advantages of opportunities and avoiding jeopardy. The commentary will keep this perspective in mind as well.
Tactical
At the tactical level, the commentary records every action and sometimes attempted actions that take place from the event that established the position to the event that terminated it. For this time frame I note reason for entry and any rule non-compliance, accidental or on purpose. I may note that a roll was attempted, but no spread that met my requirements was available.
Intermediate
The intermediate time frame consists in reviewing the life of a particular trade or group of trades part of the same iron condor. Here I am trying to identify the performance of myself, the trader. Did I follow my strategy? Did I deviate? Why? What happened?
Strategic
The strategic time frame consists of reviewing several different trades over several expiration times with the goal of identifying any degradation in performance of the strategy. Here I want to identify any changes in the trading environment that may render the strategy ineffective. The strategic review is intended to help me spot systemic changes that may require changes in the rules, changes in the parameters or abandonment of this strategy because the market conditions no longer exist for keep it profitable.
Dashboard
The key monitoring tool for my trading is my Dashboard. I will keep the current output available here as an image as long as there is interest in following my trading so you can see what informs my actions.
Activity Summary
Each time I complete a transaction, I will update the summary so that my current position can be monitored. The summary will be in a new post at the end of the day that the activity took place. As spreads are initiated, they will appear in the summary as long as any spread in the iron condor is still in play.
Others Posting to This Thread
I see no reason not to let anyone who wants to, to post a comment or question. I will however moderate offensive (to me) posts even if they contain useful information, comments or questions. I plan to continue this effort as long as there is interest from others. Comments and questions are one way to keep me interested in keeping this thread timely.
I trade index options credit spreads and form Iron Condors when market conditions permit. The primary difference between my methods and the methods popularized by others in the use of new tools recently available and a more aggressive management strategy to turn trending markets into additional profit rather than a loss. More specifically, I use probability of touching rather than probability of expiring as my proxy for the chances that the spread will fail to produce maximum return. And I roll spreads as they near maximum profit if new spreads are available that meet my credit goals and are within my risk parameters.
The Journal
This journal is identical in content to the one I keep for my own trading. It is slightly different in format due to the limitations of the forum presentation. This journal is more than a record of trade entries, adjustments and exits. It is also a record of the good, the bad and the ugly for these transactions. Did I follow my rules. If not, why not? Did I mess up execution. If so, what am I going to do to prevent it from happening again. Did things work out as expected. If not, are rule changes in order or is it just one of the chance occurrences we are prepared to endure.
Given that it is identical, some background to my practices is needed to interpret the information.
There are two key parts to a trading system; the strategy and the trader. Each must be a good performer to achieve trading success. And each must be continuously assessed to assure top performance. The journal is used for both of these tasks. The journal is all about quality assurance. Evaluating the strategy and the trader for any degradation in performance so that action can be taken before serious damage is done.
Journal Analysis
The journal is meant to provide analysis in three time frames; tactical, intermediate and strategic. The same daily information is used but summarized and formatted differently for each time frame. I keep the entire spectrum of time frames in mind when I create the journal entry commentary.
Once a trade is established, actions can roughly be divided into two categories; taking advantages of opportunities and avoiding jeopardy. The commentary will keep this perspective in mind as well.
Tactical
At the tactical level, the commentary records every action and sometimes attempted actions that take place from the event that established the position to the event that terminated it. For this time frame I note reason for entry and any rule non-compliance, accidental or on purpose. I may note that a roll was attempted, but no spread that met my requirements was available.
Intermediate
The intermediate time frame consists in reviewing the life of a particular trade or group of trades part of the same iron condor. Here I am trying to identify the performance of myself, the trader. Did I follow my strategy? Did I deviate? Why? What happened?
Strategic
The strategic time frame consists of reviewing several different trades over several expiration times with the goal of identifying any degradation in performance of the strategy. Here I want to identify any changes in the trading environment that may render the strategy ineffective. The strategic review is intended to help me spot systemic changes that may require changes in the rules, changes in the parameters or abandonment of this strategy because the market conditions no longer exist for keep it profitable.
Dashboard
The key monitoring tool for my trading is my Dashboard. I will keep the current output available here as an image as long as there is interest in following my trading so you can see what informs my actions.
Activity Summary
Each time I complete a transaction, I will update the summary so that my current position can be monitored. The summary will be in a new post at the end of the day that the activity took place. As spreads are initiated, they will appear in the summary as long as any spread in the iron condor is still in play.
Others Posting to This Thread
I see no reason not to let anyone who wants to, to post a comment or question. I will however moderate offensive (to me) posts even if they contain useful information, comments or questions. I plan to continue this effort as long as there is interest from others. Comments and questions are one way to keep me interested in keeping this thread timely.