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Early Trading Mistakes & How I'd Fix Them

Early in my trading, like most options traders, I became infatuated. I started trading ALL the time, lamenting the PDT rule, trying a bunch of different strategies with different variations. Looking back at this time, I wasted it. I'll layout how I would've approach this differently to actually maximize the value of the experience.

  1. Write out the strategies. I was trading what I saw, heard, felt, etc. I was NOT trading anything that I had taken the time to sketch out and create a plan for. This led to a complete inability to pragmatically observe cause and effect of what I was doing and any ability to optimize.

  2. Create a log to track what I was doing. Seemed like a lot of work and I obviously could remember what I was doing and if I needed to, just look back at my broker statements - right? Wrong! This was ignorant and lazy. Not only wasn't I trading a defined approach, I wasn't even tracking anything to compare. Looking back I want to ask myself, what was it that I sincerely thought I was going to accomplish. Once I created a log, to track how I was assessing entry criteria, selecting strikes, deltas, risk management, profit management, etc. I was able to actually create usable data to optimize.

  3. I Started Making More Money, When I Traded Less. A huge outcome of implementing #1 and #2 is #3. I found that I was attempting to trade shorter DTE (not the 0DTE stuff we see today, but mostly 4-11DTE). What I learned was forcing my timeframe that I was comfortable with regardless of what the market, simply led to me handing away any semblance of edge in the strategy. I started more clearly defining the criteria I needed for my shorter-term strategies and something magical happened. The "ideal" trading opportunities plummeted and I wasn't trading the strategy each week no matter what. This actually increased the expectancy of the strategy but more importantly, got me to spread into other strategies - which ultimately worked far more effectively for me. I dove into ratio diagonals, ratio covered strangles, volatility strategies (long/short straddles) etc.

Hope some of these thoughts help others as they tighten up their trading game. I've been at it for 15 years now and continually trying to get better. Have an awesome week!

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