Year to Date Results/Thoughts

Right now I'm sitting on a 15.7% year to date gain in my main investment account. This puts me about on par for my goal of 2% a month. While I've been very patient in entering trades I've also been lucky that there have not been major declines in the market.

Major declines in the market are a double edged sword. First and most obviously a dropping tide sinks all boats. On the flip side, however, market drops increase volatility and therefore, increase option premiums. This enhances the opportunity to roll down and out for a net credit. If you've followed my recent GDX rolls you've seen that one can profitably navigate a drop in price. Ironically, I've made my largest gains on stocks that dropped below support levels.

I trade a lot on margin so the risk of a market drop is always on my mind. I typically don't use more than 50% of my margin because I've found that the remaining 50% is usually enough cushion to avoid margin calls. For those of us who have experienced the margin call I think we can agree that margin calls make for upset stomachs and fear induced selling. Fear in trading, as in most life events, is one's own worst enemy.

I've been a student of the market since ~1987. I've learned that patience and a plan are key. It seems the longer I've been in the game the less I trade. While waiting for the fat pitch to swing at is not the most exciting route alas I believe it is the most profitable.

More trades may get me more readers but I'm not looking to monetize this site. I blog because I've found it helps to keep me grounded and patient. I also hope that readers will interact via comments as these trading thoughts that go through my head are not shared by friends and family. As such, your comments are greatly appreciated.

Have a great day.