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Last week was by far my best and most consistent week since I started trading. I finished the week with a 33% win rate (my best yet) and I came within $0.96 of being green on the week.

Weekly Trading Stats:

Total Trades: 12

Winning Trades: 4 

Losing Trades: 8

Win Rate: 33%

Weekly P&L: -$0.96

Weekly ROI: -0.02%

Beginning Balance: $4,736.20

Ending Balance: $4,735.24

Weekly Trading Recap:

I had a brutal start to the week, going 0 for 4 on my Monday trades and losing $159.68 on the day. To make matters worse, I don't think I was ever in profit on any of the 4 trades. Price pretty much went in the complete opposite direction as soon as I entered each trade. Not exactly a huge confidence booster.

After the 4th trade, I shut my computer and went on a walk to cool down. When I got back, I sat down and started my daily trading review. Almost immediately, I identified and fixed a huge mistake that I was unintentionally making. As a result, I traded the next 4 days at a 50% win rate and a net profit of $158.72.

** This is exactly why you should be reviewing/journaling your trades every single day. 

My Best Trade:

Profit: $216

Entry Date & Time: Tuesday, 7/11/23 at 11:31 AM EST

Setup: We were in a bigger picture uptrend and price was consolidating above a resistance level that we had recently broken through and price was also holding above VWAP. 

Option: $441 CALL

Contracts: 6

Entry: $0.40

Stop Loss: $0.34

Profit Target #1: $0.58 (3X my risk)

Profit Target #2: $0.69 (5X my risk)

Profit Target #3: $0.98 (10X my risk)

Result: At the 21-minute mark, I hit my first profit target for a profit of $36. At the 25-minute mark, I hit my second profit target for a profit of $58. At the 31-minute mark, SPY hit my third profit target on the dot before pulling back to my entry price. Profit on the third profit target was $116.

My Worst Trade: 

Profit: -$54.00

Entry Date & Time: Wednesday, 7/12/23 at 11:33 AM EST 

Option: $447 CALL

Contracts: 6

Entry: $0.51

Stop Loss: $0.42 (I thought I set it to $0.46 but I fat-fingered my order, resulting in a bigger loss).

Profit Target #1: $0.64 (3X my risk)

Profit Target #2: $0.74 (5X my risk)

Profit Target #3: $0.98 (10X my risk)

Result: Price ripped to the downside as soon as I entered and I was almost immediately stopped out. 

My Trade Mistakes:

1) Forced Trade: I felt completely locked in during the first two hours of the trading day. I was identifying great setups but I kept hesitating at my entry points. As a result, I missed out on multiple winning trades. Then, when I saw my trading day coming to an end (I have a rule that I can't trade after 11:45 EST), I decided to force this last-minute trade out of frustration for having nothing to show for how well I was identifying trade opportunities all day. 

2) Poor Price Action Analysis: I tried to go long after we had just broken below a support level on two large red wicks and increasing seller volume. 

Educational Resource of the Week:

A few months ago I purchased an online trading course from a respected crypto trader. Last week, I finally got around to watching some of the video lessons and they are excellent. The course covers everything from risk management and support & resistance levels to Fibonacci Retracements and Elliot Waves. 

If you're just starting your trading journey, I'd recommend doing the entire course in order. But if you have a little bit of experience, you can hop around and use it to help you improve or develop specific skills.

I spent time watching the lessons on identifying trends, using different time frames to identify trade opportunities, and using the Fibonacci retracement & extension tools to identify potential entry and exit points.

Here is a link to the course if you want to check it out. The instructor is more of a crypto trader but he talks about non-crypto assets too, and his technical analysis concepts can be applied to any market. 

Learning Lesson of the Week:

I've gotten pretty good at identifying spots on the $SPY chart where price might reverse, but I've had a difficult time predicting the price of a specific option when that spot on the $SPY chart is hit. As a result, I've been entering trades 3-5 cents too early or too late. It doesn't sound like much but many times that can be the difference between getting stopped out and hitting a profit target.

However, I recently discovered that you can use the chart of an individual options contract to snipe better entries. It doesn't work all of the time, but I've found it to be pretty darn reliable.

So let's say I'm expecting a reversal on $SPY and I want to buy the $440 PUTS for between $0.49 and $0.42, but I'm not exactly sure what to set my limit order at. In this scenario, I would pull up the chart for the $440 PUTS and see if price has repeatedly bounced off any price levels between $0.49 and $0.42. If price has already bounced off $0.44 three times that day, it is more likely than not that it will bounce off that level again. So if I wanted to snipe the absolute bottom, I would set a $0.44 limit order. But a $0.44 limit order is not guaranteed to get filled if price bounces off $0.44, so I've found that a better strategy is to set my limit order 1-2 cents above wherever it has previously bounced. You might give up a little money but you greatly improve the odds of getting filled. 

Word of caution: You should not flat-out trade the options contracts. Just because price has bounced off $0.44 three times, does not mean you should blindly enter the next time it hits $0.44. You need to look for trade setups on the $SPY chart THEN use the option chart to help you identify a good entry target. I learned this lesson the hard way on Monday and it resulted in 4 straight losing trades.

Alright, that's enough for this week. I hope you've learned a thing or two and I hope my improving numbers this week will inspire you to start your own trading journey. Have a great week ahead! 

- Eric