Take Cookies When The Plate Is Passed

[csricksdds]

Always take cookies (PROFITS) when the plate is passed! Yesterday at 12:11 a friend of mine texted me to say he was having a good trading day. He texted "presently I'm up $11,577" and went on to outline his trades.

I texted back "take your profits and run!" I also said "I tip my hat to you. You're way ahead of me."

So, how far ahead of me was he. Well, first of all, I don't like trading on Friday's very much. Furthermore, I don't like 0DTE trades and his were all 0DTE. At that time I hadn't placed any trades but did so at 12:20 using a small risk on NDX. I placed a mere two contracts 24130/24120 PCS 0DTE (against my own rules) which cost me 4.56 (912 total risk). My charting gave a SHORT BUBBLE and the market seemed to be in a down mood. This trade ended fully ITM for a $1,088 profit (less cost of trade), my favorite cookies.

Now back to my friend: Another text message at 4:02 p.m. saying the market had gone against him and he said he closed his trades for an ($11,330) loss. He went on to text "I learned a few things and next week will be better!"

My text back: "$11,000 positive is better than $11,000 negative! Take profits when they are on the table. Here's the way I look at it. You had an easy 11K profit but lost 11K instead. That's a 22K difference so the first 22K you make next week will get you back to the 11K profit you could have booked. A hard lesson I have often learned (but not at that level)!

I posted this because I think there is a lesson in there somewhere? It takes twice the effort to redeem a profit once it has turned into a comparable loss

 

[picasso11205]

Always take cookies (PROFITS) when the plate is passed! Yesterday at 12:11 a friend of mine texted me to say he was having a good trading day. He texted "presently I'm up $11,577" and went on to outline his trades.

I texted back "take your profits and run!" I also said "I tip my hat to you. You're way ahead of me."

So, how far ahead of me was he. Well, first of all, I don't like trading on Friday's very much. Furthermore, I don't like 0DTE trades and his were all 0DTE. At that time I hadn't placed any trades but did so at 12:20 using a small risk on NDX. I placed a mere two contracts 24130/24120 PCS 0DTE (against my own rules) which cost me 4.56 (912 total risk). My charting gave a SHORT BUBBLE and the market seemed to be in a down mood. This trade ended fully ITM for a $1,088 profit (less cost of trade), my favorite cookies.

Now back to my friend: Another text message at 4:02 p.m. saying the market had gone against him and he said he closed his trades for an ($11,330) loss. He went on to text "I learned a few things and next week will be better!"

My text back: "$11,000 positive is better than $11,000 negative! Take profits when they are on the table. Here's the way I look at it. You had an easy 11K profit but lost 11K instead. That's a 22K difference so the first 22K you make next week will get you back to the 11K profit you could have booked. A hard lesson I have often learned (but not at that level)!

I posted this because I think there is a lesson in there somewhere? It takes twice the effort to redeem a profit once it has turned into a comparable loss

I think that we as traders sometimes lose perspective because of the numbers involved. @csricksdds' comment above is a great example. A swing from an $11k gain to an $11k loss is hard to imagine for a large majority of the population. There was an article in the NY Times this past Friday describing how many people are resorting to donating their plasma to make $50 or $60 to make ends meet in an economy where costs are soaring. To paraphrase @csricksdds, the only "cookies" they are getting are the ones they get to raise their cell count after sitting for an hour to literally make "blood money." So yes, celebrate (and take) your wins no matter how big or small with the understanding that many people don't have the same opportunity or skill-set. @csricksdds , which of your great AGAIG charts and time frame did you use for your nice NDX trade described above?

 

[csricksdds]

I think that we as traders sometimes lose perspective because of the numbers involved. @csricksdds' comment above is a great example. A swing from an $11k gain to an $11k loss is hard to imagine for a large majority of the population. There was an article in the NY Times this past Friday describing how many people are resorting to donating their plasma to make $50 or $60 to make ends meet in an economy where costs are soaring. To paraphrase @csricksdds, the only "cookies" they are getting are the ones they get to raise their cell count after sitting for an hour to literally make "blood money." So yes, celebrate (and take) your wins no matter how big or small with the understanding that many people don't have the same opportunity or skill-set. @csricksdds , which of your great AGAIG charts and time frame did you use for your nice NDX trade described above?

Nice feedback and commentary. I used this current example as the large numbers are very vivid. This dynamic happens regardless of the size of trade involved. This individual was trading 80 contracts (about ten time more than I ever trade) and yes, above what most of us retail traders experience. My cookie plate is not that large!

Now to the NDX: I was using my Rinse and Repeat 5 min. Chart although most of my charts would have worked.

Thought process: Early afternoon reversal at 12:20 p.m. It appeared that the day high had been established at open and this was a lower high turnaround. I only used two contracts and let it run although I would have exited at another turnaround but another turnaround was late in the day and doubtful going back above the entry level.

A little trading nugget I use if we have appointments or are going to be gone all afternoon? At a probable turn such as this one above I will first buy an ATM ten point PCS but only if I can buy at $4 or less. I will then buy an ATM ten point CCS also for around $4 (always less than $5). Then I leave and let them run through close. I would only lose money if the trade pinned at the level bought which would be unusual for the volatile NDX. Usually one leg would be fully ITM at close. The small profit would be considered lunch money. The ITM portion would be worth $6 while the OTM spread would cost $4 leaving a credit of $2 (actually $200/contract less costs and is usually a winner 100% of the time? This type of trade also works with SPX or any trade that cash settles at end of day. I probably should post this on the playground?

Thanks for your feedback!