Wednesday, June 3, 2009

Support, Now Resistance



I dumped most of my neutral positions this week and I am glad I did. But now I have to make back any losses I had and produce some income. I have been in this position many times before and I have in some cases out preformed my expectations.  When I get into situations like this I set more credit spreads specifically on the $RUT and $SPY "deep and wide". I will also set more buy writes on my normal buy write bunch. Doing this will bring in some credits to cover my mistakes.  Now its time to produce my monthly income. The first thing is I have to be patient, if I just jump right back in I might make a bad decision because I have to participate.  Thinking like this will stress you out and make you crazy. Patients is the first and most important part of trading, especially in this scenario.  My second thought is about theta, theta burn is the next most important thing. Theta usually starts to take off 10 to 15 days out.  Now I can set calendars and butterflies 10 to 15 days out to capture a faster theta decay with less time risk.  15 days out would be this Friday, but we also have non-farm payroll then. After the report and market open I will decide what trades fit my rules and what trades look the best.  All in all I learn and keep learning this business month in and month out. I love what I do and I do what I love and that's trading.  

Two charts:
DBA is almost at my long entry spot and volume is looking very nice.
SPY, support is now resistance. 

1 comment:

  1. very nice blog about your business, keep those thouhts with strong.

    your lazy ass beach bum dad

    ReplyDelete