Saturday, February 9, 2013

December to Feburary Trade Review

In the last 3 month, I had no chance to go through my formal trade review. Instead, I did a few brief analysis on the monthly trades, including the following:

But as part of my trading process, it's still desirable for me to perform trading review monthly, based on my template for the review.

Trading Rules

  • Adherence consistency
Difficult to tell. Probably not much consistency in this period. I adjusted my trading rules since late December. I also played with a couple of butterfly adjustment strategies in the 1st month or two.
  • Skillful application/execution
Made an error using balanced butterfly adjustment for Jan paper portfolio.
Also need to refine inventory closing sequences as noted in Feb closing day.

  • Monthly rule review/study
Did spend time at weekends to review/update trading rules. Started to incorporate the 40 day to 60 day option life after some study and paper trades.

Due to the susceptibility of making trading errors as evidenced in the past, I'm thinking of adding a validation function in my trading process. This validation step may cover review of adjustment strategy, and potential cancellation of strikes in existing position when new order is about to be placed.


  • Action during uncertainty
Not bad. Always used the Greeks and P&L chart to determine trades and adjustments.
  • Risk Comfort ability/Adverse damage impact
Seemed to be more comfortable with risks undertaken by using current strategies and had better understanding that new risks would be acceptable when adjustments were made. It's a major charateristic of my trading system to use additional capital for adjustment which implies increased portfolio heat after adjustment. Must be comfortable to the overall risks during the trades to succeed in this system.
  • Trade anxiety
Not much.
  • Winning Altitude Development
Need to complete the 2nd part (integration of successful mind set) on the psychology of consistent winning altitude.

Trading Time
  • Trading days
Using the 2 month-out options definitely reduced the amount of time required for trading in the last couple of months.  It should be possible to meet the 15 to 20 minutes per day on average target. But on a busy inventory closing day, it may take 45 minutes to over 1 hour to get all trades closed.
  • Rest days
Did trading process related studies. Spent time on family and work as well.

Trades and Market Replay

  • Market Forecast
Was expecting a market pullback of some sort, but not really happend. An overbought market can become even more overbought in strong trending markets.

  • Trades and Adjustments
Did not appear to make major adjustment errors in the last couple of months. Used IC rolls first, then used calendars next. Whether enough Delta were adjusted in the strong market would be subject to further analysis.

To Do List

From this month onwards, I'd like to add a to-do-list as a reminder for my near term trading work.

  • Integration of successful mind set to trading rules
  • Identification of components of trading process
  • What is learned from super trader Karen
  • Quarterly Performance Analysis

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