started testing tighter stop losses today.
goal: reduce avg loss from $660 to $600.
early results: mixed.
the change #
old stops: -150% of credit received
example: sell $2.00 credit spread, stop at -$3.00 loss (-150%)
new stops: -140% of credit received
same $2.00 spread, stop at -$2.80 loss (-140%)
difference: $0.20 tighter stop per spread
monday 7/10 trades #
trade 1: SPX put spread
- entry: sold for $2.15 credit
- old stop would’ve been: -$3.23
- new stop: -$3.01
- result: stopped out at -$3.01
old system: would’ve stayed in position (hadn’t hit -$3.23 yet)
new system: stopped out earlier
what happened after stop:
- position continued against me
- would’ve hit old stop at -$3.23 anyway
- saved: $0.22 per contract = $22 total (10 contracts)
good test. tighter stop worked.
trade 2: TLT call spread
- entry: sold for $1.85 credit
- new stop: -$2.59
- result: +$0.93 profit (closed at 50%)
no stop hit. clean winner.
trade 3: IWM put spread
- entry: sold for $2.40 credit
- new stop: -$3.36
- result: stopped out at -$3.36
the problem with this one:
position bounced back after i got stopped.
if i’d used old stop (-$3.60), would’ve stayed in and eventually profited.
estimated cost of tighter stop: -$240 (would’ve been +$120 winner)
today’s net #
trade 1: -$301 trade 2: +$93 trade 3: -$336
total: -$544
first red day in july. sucks.
the analysis #
tighter stops:
- saved $22 on trade 1 (worked)
- cost $360 on trade 3 (got whipsawed)
net impact: -$338 worse than old stops would’ve been
sample size issue #
can’t conclude anything from 1 day.
need 20-30 trades minimum to know if -140% stops are better than -150%.
what i’m doing #
continuing with -140% stops for 2 more weeks.
tracking:
- how often new stops save money
- how often new stops whipsaw me out
after 30 trades, will compare to historical -150% stop data.
july update #
goal: +$3,500
current: +$1,286 (-$544 today brought me down from $1,830)
remaining: +$2,214 in 3 weeks
still doable but today hurt.
A. update #
saw her sunday night.
cooked together (pasta, she’s teaching me).
still haven’t brought up the fantasy.
came close after sex but chickened out again.
she asked: “is everything ok? you seem like you want to say something”
me: “nah, just thinking about trading stuff”
her: “ok, you know you can tell me anything right?”
me: “yeah i know”
i’m a pussy. she literally gave me opening and i didn’t take it.
mental state #
frustrated by today’s losses.
frustrated by lack of confidence with A.
know both are fixable:
- trading: more data needed on stops
- A.: just fucking tell her the fantasy
easier said than done on both.
tomorrow’s plan #
continue testing -140% stops.
aim for 2-3 trades.
focus on quality entries (vol detection, correlation checks).
maybe tell A. the fantasy tomorrow night when she comes over.
probably won’t. but maybe.
3:25am tuesday. first red day in july. testing tighter stops, early results mixed. need more data. still a pussy about fantasy.
-AK