Language Partner

 Recently I take part in Hello Talk, and find some very helpful people to be my language learning partners.

I am learning Japanese and there are many who want to learn English.  Such a platform seems to be a perfect place for those who like to improve their language skills.

But not without embarrassment of language gap. :)

A kind-hearted gentleman sent a message at night, I did not read till next morning.  So I replied him with " 私をたけてください”、that was following his cue in this message "please help me"

He replied immediately with alarm どうしたの？”

At that moment, I realized that I must had made mistake like crying for help :)

The misunderstanding made us laugh, in this case was okay, but could be worse , isn't it.

How to manage trades which go against you?

The business of retail traders, like professional trading firms, are nothing but probability in risk and rewards.  

You got to have winning edge strategy, ability to execute strategy consistently; and manage the trading in disciplined and professional manner. There is really no free money under the sun.

Every trader experienced at least once a while some trades that go against them, not matter how thoroughly he/she executed the strategy, analysis and preparation.  This is just of part of games.

The important part is how do you manage the losing trade?

Let's assume that your portfolio already are well balanced,  the beta weighted delta are within your risk tolerance threshold.  The following are some reflections through my own trading experience.

1. Keep trade size small and Give enough time DTE

I cannot emphasize enough the importance of keep trades size small.  

Let's you have $10,000 account.  You should keep at lease $3,000 as cash ; the total buying power to used for trade should be around $3,000; the rest of can be used for long position or neutral position. etc.

The available buying power is necessary for you to manage any losing trade or roll the position.  

To give your trade enough time is also very critical, usually at least 30 to 45 days.  In option trading, time plays important role,   Time is money" even more so true in this business.

2. Roll the losing trade for more time

This is my preferred method. As I entered all my trades based on TA , if there was surprise market movement, I always prefer to have more time to confirm direction biases

For typical strategies like vertical spread, CSP etc, I prefer to enter the positions based on the roll strategy will give your more time to evaluate market conditions and your own direction bias.  When you roll, especially when market goes against your assumption of direction, the margin required can be suddenly increased lot.  If you don't have available buying power, or your trading sizes are too big, the rolling can be difficult.

3. Open the opposite the trade

I don't use this method often, but if I am confirmed that my initial direction bias was wrong, to cut the lost, I may open the opposite the trade to cut lost.  Be very careful and patiently to do this type of trade, though.  This way can greatly reduce the loss, if executed correctly and at the right timing.

4. Accept the lost and move on to the next new trade

You always should take losing trades into consideration when calculate risk and reward.

For example vertical spread at .30, roughly, you should have about 70% chance to win the trade, if your  vertical spread is about $1 wide, the l premium received from the trade $0.10, which is only 10% of return;  the probability of win is 70%.  In following illustration, you can see, for very trade, you risk $9, to win $1 and over 10 trade, if exactly as 70% probability, you chance is profitable is lower.

In order to have better Risk/Reward, either you have to increase the premium received, at least above 20%; the PoP arould 70%, you need to take more trades to let statistics work out in your favor.

There is really no free money under the sun, it requires hard work, diligence and discipline to follow the rules.

希望するもの

日本語の練習ために、これから、日本語BLOGかいてみて。

希望していること：

１．JLPT N2 試験に合格するように。

2．新しいやお買い得ように

３．Noahの願いを大学に受け入れられるように.

4. 株式取引で12％の利益ように

Monthly Update for Trading Track

 Below are monthly tracking for two accounts I am currently managing:

The main strategy used are Covered call and Cash secured put, vertical spread, with some calendar spread.

The past FB, AAPL and MSFL earning play were also very successful.

Yesterday, we saw some bearish sentiment, both NQ and ES dropped  7%.   Will reduce the positions size and place some bearish strategy and hedge and wait for right opportunity to invest some selected companies with good fundmentials.

Goal Setting

 One of my friends texted me this morning, he had been awarded as Best Performance Salesman last year.    He thanked me " It would not happen, had you have not asked me to set goal."

I am so happy for him.

It is so important to set goals.  I believe that any achievements in life start with a thought of "I want""

A thoughts leads to an action

An action leads to a habit

A habit leads to a character

A character leads to a destiny.

There are mainly three steps of setting goal:

1.  To know what you want

It may seem easy, but many of people do not really know what they want .  They just follow their parents, teachers, and peers, to live a life to please everyone but themselves.  The true motivation is always from inside, to find what you really want is the beginning of true motivation.

2. To set SMART goal

S : Specific,  

Write down your goal as specific as possible.  It is no good to just say "I want to be a good student", First, you need to define what is good. , good grades, good social skills, good character etc, Define and focus on one area, go down to each tiny detail to define and refine what do you want.  You will not achieve your goal, if you have no clear picture what do you want to achieve.  

Specifically  "I want to improve my grades by 10 points" is much better.

M: Measurable.  

Let's be honest, don't fool around yourself.  You won't be able to achieve what you can measure.  If you want to be good in grade, academic score will be a good measure.   Your goal, no matter how big, how small should be have measurable matrix for you track.

Measurably: "I want to improve my grades by 10 points" 10 points is your measure.

A: Achievable  

What is difference between daily dream and goal?  Obviously, one is achievable, one is just as mist.  No matter how little progress/ achievement you have, it will boost your self worth and self believe, reinforce the positive behaviors which leads to form a habit.  

To break down a big goal into few steps, to mark each step as milestone for achievement, by doing so, you will have achievable goal.

Achievably: "I want to improve my grades by 10 points" is 10 points is achievable?  be honest with yourself, if not, start with 1 point.

R: Relevant

We are human beings with limited time and resources, therefore, start with something relevant to your current situation is important.  That is why the first step "To understand what you really want "is so important, as  you can focus your time and energy to your top priority.

Relevantly: "I want to improve my grades by 10 points" is relevant as I am a student etc.

T: Timebound

Without clear timeframe, it is meaningless for setting goal.  The old Chinese poem 明日歌, was just perfect to describe this point.

明日复明日，明日何其多，
我生待明日，万事成蹉跎。
世人若被明日累，
春去秋来老将至，老将至。

朝看水东流，暮看日西落，
百年明日能几何，听我明日歌。
朝看水东流，暮看日西落，
百年明日能几何，请君听我明日歌。

Timely: "I want to improve my grade by 10 points this year".

3. Plan, action plan, weekly plan, daily plan to do list

Okay,  you really know what you want and you have a SMART goal.  Now it is time for plan and action.

Make list of action plan that you need to do.  breakdown into monthly, weekly and daily.  Then stick to it.  Remember, Action leads to habit,  after stick to action plan, you will develop a habit, with good habit, you will see progress;  with progress, you will increase self confidence; such self confidence will reinforce your action, so on and so on.

It is not too late to set goal for 2021.

 We are just in the January of 2021. it is never too late.

My Goal for 20201:

1. Pass JLPT N2 in 2021

2. Double my trade account 

3. To connect three people and help them in small ways 

💪

CSP Update Week Jan 9 to Jan 15, 2021

 Week 9 to 15 Jan, 2021.  Cash Secured Put Update:-

The net profit for this week from CSP strategy: $ 1,449.50; ROI: 2.61% per week.

I am taking conservative approach of CSP.  I set aside about 1/3 of total buying power for CSP, besides long term shares, I also set 1/3 to manage covered calls positions.

Starting with strategy, there are two types of puts selling:-

Type 1) selling puts for income; for this type, my goal is income, I don't want to get assigned, therefore, high IV rank, reasonable high ROR, and relative lower RSI are the keys criteria in selection of tickers and entry timing; the put I selling typically is around .30 delta; and very often, I don't hold till expiry.

Type 2) Selling puts for Long stock with discount, identify growing or potential stock for long term investment. Cathy Woods listed out 5 disruptive innovation sectors in which ARK has been solely focused, those are potential long term investment, I set my own price targets on some of those stocks, selling puts till being assigned. For this type, the company's fundamentals is more important than TA;

CSP is very capital intensive, so proper allocation and right position size are important. To keep enough Buying Power is crucial when adjustment and rolling are needed. Typically, you should have at least 1/3 of your total capital size as BB to standby.

One last words on Return on Risk. ROR=Premium /strike price, personally, ROR >1.0% for 10 days is good enough, I don't think it necessary to chase after ROR, different trader has different risk appetite and risk management skills,

Wish you all have a good weekend.

Review Last Year's Resolution and Achievement

 At 1 , Jan 2020. I wrote the following resolution.  Here serves as review .

1. Family

• To be supportive and kind mother to my children, to be understanding parent to them
• Not to easily lose temper
• Always to find positive response towards them

Action: to make time for family and book the special date for it.

2021 Review : the above achieved 90%,  more effort should be made towards Stephen and Petra.

2. New Investment plan

• Put effort to study
• Make investment plan
• To acquire one investment property

2021 Review : the above achieved 50%,  Make attempt to purchase UK property, but cancelled due to Covid outbreak.  Will be looking into it in USA in this year. Investment study and option trade was fruitful, need to continuous effort in this year to make consistent and sustainable.

3.  Japanese study

• Continue the study and make improvement on oral 
• Take JLPT N2 at end of Dec

2021 Review : the above achieved 50%,  JLPT N2 was cancelled in July, and had few slots in Dec, will be taking JLPT N2 this year July.

4. Health

• Reduce the drink, eat less meat
• Exercise at least 3 times a week.

2021 Review : the above achieved 90%,  I am happy to see my weight was reduced from 62 kg to 58 kg; this year will increase effort to have regular exercise, to aim to reduce the weight to 54kg.

All Thanks give to GOD

 For 2021, I have made the following resolution:

1.  Further fine turn the trading plan and strategy;  to focus on the strategy selected
2.  Aim for 10% annual return.$3000/per month income from trading.
3. Aim for scaling up by teaching others to learn the same process and strategy
4. Make time for exercise and writing. 
5. Make time for children.