How has August been for intraday traders ? Its been very frustrating for me with a very low return on my strategy this month (for index trading).
I want to know if only I have been facing issues with trading this month or is it happening with most of you ? I am simply tired of taking the breakouts and breakdowns, its time one starts doubting on their strategy. This August is very similar to August 2017. Random gap ups and gap downs with huge intraday volatility made life difficult for option writing too. Premiums have been weird as well, and there have been IV traps quite a lot of times.
You did not get the frustration part right. Months of plus and minus is a part of the game in the markets. I started this post to know if others too faced a difficult month like me. Maybe like your name, you really might be the dude in trading, so such months don’t bother you… There was someone who posted about August being negative just a week ago, I was simply checking out on that. Empathizing is an important quality as one doesn’t lose confidence to change the strategy or get into the pile of self doubt. That is an individual decision though.
Why does that matter? Are they trading on your account?
Why should one empathize in a business like trading. People here are looking to take your money. Empathy is last thing you should be looking for in this business.
August was challenging indeed for me as an intraday trader, good profit but less compared to previous months. Revised my small stop loss so was able to save my ass for the month. Hopefully, September would be great for system traders. Posting more on twitter these days.
To the op, don’t be disheartened or frustrated, trading is like that only with its swings. Some months are amazingly profitable, some in between are decent enough to keep the show running. If you are looking for a steady fixed income, full time trading is not the place for it, go take a Parle-G distributorship instead.
Jokes apart, tough month teaches you lot of things. If you are eager to take the grind.
You know how much your strategy can take a beating. You know how to remain calm and smile with your daughter.
You know the losses you had, and yet again you have to take the trade the next morning if your system says so.
Profits don’t teach you do that. In fact, streaks of profit make me uncomfortable. You know, losses is just waiting to strike. I love this distribution of wins and losses.
Cuz our mindset, is not in controlling the outcome, but executing our process. Few setbacks, are just part of life, as long as you are betting sensibly within the systematic plan.
. I trade only in Nifty Index Options but not intraday. The system I follow is positional with an average 4-5 day holding time. This is a trend following system so when market trends the system makes money. Otherwise mostly break even or loose very little % of my trading capital. But the moot point is that I have a plan which am comfortable with and I just keep executing it every market day like a machine. I don’t worry about the end outcome. I just follow a process. Over the years that kind of detached approach to trading has really given good outcomes. One will be in a better position to be in that mental zone if one has enough trading capital and one is fine even if all that capital is wiped off.
As for you, I wouldn’t really doubt a strategy based on just one month result unless am not really sure about the strategy. Have you back tested your strategy in different kinds of market - trending, flat, volatile ? Have you worked out the max drawdown in your strategy and do you have enough capital to cover such drawdowns ?
Rs.160000 capital per lot of Nifty option. I trade with four lots. So my net capital is Rs.640000. The capital amount is set at the level where my trading system would yield no more than 30% drawdown.
Don’t lose hope. May be, take a break and focus on what went wrong. Time to check the basics first.
I maintain a legder - why did I enter a trade, expected outcome, SL if any, Did it/why did it hit SL, max notional profit/loss observed, Learning from the trade.
You can customise the ledger to suit ur needs. In the long run, this ledger will become a ‘Rule Book’ for you!
Of course, this requires a lot of discipline and I’m sure you will do it.
I have been profitable this month too. I sell OTM CEs only.