June 2013 Trading Performance

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I’ve started questioning myself whether to keep this trading blog going because after I’ve managed to lose 87% of my account value in May, June had some great trades, but the last trade initiated in June has not gone well which I’ll talk about in a minute.

In June, I managed to lose 21% of the account, bringing a sub $1k account further down to $755 and change.

Going forward and lessons learned below.

Play to the %, not the $

Your trading goal should be a realistic % of your trading size according to your trading timeframe.

If you day trade, a 1% to 5% gain intraday is very doable in options. Done consistently, you would see a 30% to 150% accumulated gain each month.

If you are doing a $5,000 trade, you should be happy to close your trade with a $50 to $250 profit, and call it quits for the day. Most traders (myself included) let greed get to them, they want to make $500/day with a $5k trade size in a single trade. Yes, you may get lucky from time to time, but most likely a 20% ($1k) profit on a $5k trade would not be doable on a single day trade.

We all want fast profit, and we all know it’s so much easier (and probably can do this very consistently) to make $50 profit on a $5k trade, but most of us don’t close the trade when we have a $50 profit, why? Slow & steady wins the race again.

FB Strangle into July

If you look at the SPOT Trading Lot, the last trade initiated was a July ’13 OTM 26 call and OTM 22 put strangle play. What this means is that FB will need to trading outside of the current $22 to $26 range for this strangle to play out.

Both the calls & puts premiums have been killed due to the sideway trading action by FB. If FB continues to trade in this range then we are looking at both calls & puts going to zero value (and we’ll stop the short-lived trading performance report). We’ll see what happens.

You can learn more about risk management, get real-time trade alerts, and join other elite options traders in our SRT Mastermind Group.

See you again next month!

About Steven Chang

I bought my first stock in 1998 and lost all my lunch money on CSCO (traded my way up to $80/share and didn't know better to sell!) during the 2000 dot-com bubble. I've learnt a great deal about trading and hope to share that knowledge and lessons learned with you. Be sure to subscribe to SRT blog to get email notification whenever a new blog post is published. Join our SRT Mastermind Group to network with other elite traders to share trade setups and chart analysis.
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