Saturday, August 23, 2014

After 3 years, I'm still here

[NOTE: This was originally written about 3-4 months ago, but not posted until now...I've been admittedly a lazy blogger).  Material changes have taken place since then and noted with red text.]

Yes, I haven't been blogging much, but I'm still here.  

It has been 3 years since I've gotten back into trading from a long time off, and it sure has been an interesting journey.  Late last year, I hit a bump in the road of life where my health condition lead me down a path with potentially very negative implications.  

There were many times when I wondered about my worst case scenario: how my passing away would burden my wife and 2 young children immensely; how devastated my children would be; how I would never be able to see them graduate school, attend their wedding, see their children, and so on.  

Oh those were depressing times.  Although I was still involved with the markets, it obviously didn't mean as much, and my performance reflected it.  During those times, trading became somewhat of a distraction from reality.  In hindsight, I should have shut it down completely.

After many tests, my heath issues luckily turned out to be nothing major, and I have pretty much worked myself back to "normal."  But it sure was a big wake up call and reminder not to take health for granted.

Seize the day.  This moment, right now, you own it.

* * * * *

Back to the world of trading, my goals and plans from last year are still in progress.  And I have continued to approach trading within 3 key areas:

1)  Discretionary trading:  
- Continue to be consistently profitable, but sizing up slowly and organically
- Focusing primarily on weekly options, with some swing trading via stocks 
- Creates a source of ideas for analysis and system development

UPDATE 8/2014: 
- Recently had too much volatility with weekly options, so I'm putting it on hold with a loss after being up as much as a much as couple hundred percent net with a small account.  The losses were all due to commissions, and I was gross profitable overall, but that doesn't count
- Given the high level of difficult trading weekly options, I consider this experience and outcome successful with many lessons learned
- With swing trading, YTD performance has been stuck, with all time equity highs acting as strong resistance
- Moving back to focusing on short term stock trading, which is how I initially started.  Going full circle.  
- This month, I've joined a trading Boot Camp program just to shake things up, and after starting with low expectation, I've been very positively surprised -- the program has greatly exceeded my expectations.  More about this in the future

2)  Autotrade programs: 
- Expanded and diversified this year beyond credit spread options to include futures
- Added to size up capital 
- Overall, has been profitable year to date
- Tracking/analyzing the signals from various systems have created a source of ideas

UPDATE 8/2014: 
- As noted in the comments section of the Spread The Trend post, this service has recently experience significant losses.  Letting the dust settle, and looking to write an update soon
- My options credit spread account is currently down over -40% YTD.  Will monitor over next few months to determine next actions
-  The futures autotrading programs are up about breakeven YTD since starting this year (they were up +35% as recently as last month), although it was up as much as +60% earlier this year (it's very volatile)

3)  System development / quantitative analysis:
- Programmed a few algo type systems, some with surprisingly solid results
- But not quite ready for prime time
- Positive benefit, program backtesting of ideas and concepts useful for discretionary trading
- Great area of focus when I'm in a slump with discretionary trading

UPDATE 8/2014:
- Scaled back significantly recently.  Will need to reevaluate longer term goals
- Here's my mental road block -- after all these years, I've come to believe that solid discretionary trading can provide returns about 4x vs. a solid mechanical system
- But discretionary trading can have significantly more wear and tear on the psychological and emotional capital.  There are definitely tradeoffs

How quickly things can change over a few month period.  But that can be pretty much "business as usual" in the world of trading.