It was a rough week for us at SPX Option Trader. We had 2 winners and 3 down trades for the week. We ended this past week with -106% ROI in our SPX weekly option trading, and -96% ROI in our SPY weekly option trading, and +78% ROM in our SPX Spread Trader. This makes 2 down weeks in a row for the SPX option trading, which is highly unusual for us. The last time it happened was in February of this year. While it is unusual, it does happen from time to time. We don’t like it when it happens, but we don’t let rough patches discourage us or cause us to change our approach. We stay consistent in approach and weather the drawdowns. Some weeks are losers, but the majority are winners and the key is to stay consistent in our approach.

This is also why it is so key to trade a lot size that allows you to handle drawdowns. A trader should be able to handle 2 or more down weeks in a row without effecting your lot size. Money management is key to handling rough patches in trading. If you are trading too large of lot size for your account size, these types of rough trading days can wipe you out. Be sure you aren’t trading more than you can handle to lose comfortably. Many traders seek to trade as large amount as possible, but that really isn’t the best approach. Consider how much you can afford to lose without causing you great concern and trade that amount. Because losses do occur, drawdowns happen and the unexpected downturns come. The key to trading is to have a solid approach and still be trading when things start going our way again.

We had a rough patches before and will have them again. This is simply part of trading. There is nothing unusual about going through periods of drawdowns. So, don’t despair and don’t throw in the towel. Just realize this is part of trading, stay consistent and you’ll be there when things turn. We look forward to a great week of trading ahead of us. Below are our comments for each day of the week:

As a reminder next week is a holiday week, so there will be no trading activity on Thursday or Friday due to the holiday schedule.

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