In today’s Options Jam Session, we reviewed how the profits from one delta-neutral credit spread more than paid for the losses on another, and I demonstrated what to do with a big winner that has the potential to pay for a lot more losses while still leaving us in the green!
This is how trader math works. Lose frequently and small, win occasionally and big. That simple heuristic is the key to long-term success.
But of course, it’s not easy.
We have to battle against our strong urges to close out winning trades too soon.
In fact, in the $APH trade that I demonstrated in today’s session, you’ll see there were several opportunities for me to get scared and pull the trigger to exit BEFORE our big profits accrued. This is why having an unemotional plan in place ahead of time is so valuable.
Next to individual trading plans, these weekly review sessions are one of the most valuable things I do each week to keep myself on track with my trades.
Be sure to check out the full video!
