Common Trading Mistake In Options - Weekly Inside Maggie's Brain

This Week on Inside My Brain I talk about a common mistake in options trading so you can learn from my mistake.

The Week
On Friday, I had something happened to me that has never happened before. As most of you
know I gather data early in the morning and predict how I think the Market’s price/action will be
for the day for specific times.

· The opening price as compared to the previous Market day’s closing price
· The price after the Market has been opened an hour as compared to the opening price
· The closing price for the day as compared to the opening price

I am able to make these guesses with about an 85% accuracy rate. Yesterday I missed on all
three guesses – NEVER has happened before.

Then I ask myself why did I miss so badly? This is where and how I learn. Well, there was a
CPI report at 8:30am Eastern. The report was worst than the estimates and the trading herd
sold off in reaction to the report.

On Friday I had to make a lot of trading decisions because most of my trades were in trouble.
Again, this kind of trading is where I learn the most. Being in bad trades in the past helped me
to become a better trader. My goal is to never have a losing trade. At worst I want to break
even. So, it was trade massage time.

Rules for Myself:

That is exactly what I did!

DATA Class Update:
Friday decimated my gains. My account balance is $38,125.36, down $6K for the week. That’s
my definition of BLACK FRIDAY. I am now off target $2.5K to double my account in 10 weeks.
I have three weeks left to make my goals. Time to knuckle down and make it happen.

Looking Ahead:
I did not see a lot of panic selling after the initial reaction to the CPI report. So, I roll a lot of my
trades over to next week to give the trades time to recover. I believe trading next week will be
rocky as traders try to get their footing back. I expect a mix of down and up days, big and little
candles without many directional clues.