Day 2: $5216 (+30.4%)
Click to view my trades & daily performance
For past performance go to the archives
About the blog:
I always wanted to start blogging but never knew what to blog about. An average life doesn't make for a good read. But the pandemic gave me an opportunity to trade options. I've developed keen interest in day trading and while I've had some success, I wanted to challenge myself to grow a small pot of $2K to $10K day trading ETF options and reset once I've achieved the target.
Financially, I'm fairly stable with emergency cash, retirement savings, investments in growth stocks, and Index ETF and regular zero cost mutual fund purchases. I believe in dollar cost averaging and the great benefits of compounding. Day trading is my way of trying to add an additional income stream to, again, buy more Index ETFs. Buying assets is the only way to grow wealth, in my opinion. I'll use my existing brokerage account with funds set aside for this challenge so I don't have to worry about PDT status and restrictions and fund requirements that come with it.
In this blog, I'll track and share my trades, charts or data that I watch to decide my trades and of course my daily performance. I use Fidelity Active Trade Pro for trading and Yahoo finance for charts
After completing my first round, I realized that I still get nervous trading amounts larger than 15K. So I revised my next challenge. I'll invest 4K on each trade for 5%. I'll not add previous day's profit to risk. I'll also not trade more than 3 times in a day. I'll see if I'm able to make 100-200% returns in a month with this strategy, without increasing risk. All profits will be invested in $IVV on red days.
To keep myself disciplined, I've set rules for myself
Only invest in ETF options, primarily $SPY, $QQQ, $IWM, $VXX. $SPY provides the most liquidity and, hence, best spread of all from my experience
Target 10% 5% return on each trade. Once P/L is booked, avoid trading again that day until after 3:30PM EST. End of day trades based on option pivots should not exceed 30% of day's remaining balance
When selling credit spreads, maximum risk should be 50% of daily allowed investment. Look of reward of over 8% on the risk.
Swing only up to 30% of the next day's allowed investment
All daily profits up to 10% can be reinvested the next day
All daily profits over 10% any day should be kept aside to buy $IVV (my preferred S&P 500 Index ETF) on red days
Past profits cannot be used to offset losses on any day
Do not over trade. If an opportunity doesn't present, do not trade that day. Also, do not chase
Disclaimer: Options are risky and subject to decay over time, along with price movements of the underlying. It is entirely possible to lose your complete investment, and sometimes more, in a single trade. My trades and opinions are personal judgment calls at that instant of time and should not be taken as financial education or investment advice. I'm neither qualified, nor experienced to provide investment advice.
I frequently share my thoughts and discuss index price movements on StockTwits.
https://stocktwits.com/StudentofLife6