Trading Journal: Oct 9–13, 2023

John F Carter
42 min readOct 11, 2023

I normally keep a trading journal in Evernote. I take snapshots of charts and entries and exits, record my thoughts, my mistakes, my wins. Currently, I’m focused more on daily income via SPX credit spreads — but when the markets shift, I will also focus more on things like TSLA and NVDA multi-day to multi-week swing trades. This is my attempt to make this journal shareable. Doing day trades with SPX options is a much more involved and intensive way to trade than swing trading. If I’m swing trading and holding onto positions for a few weeks, I’m not paying this much attention. But because these are day trades, and because I am shooting for a daily cash goal, my involvement is higher along with day to day money and psychological management. Hence the journal to track my progress, note my mistakes, and continue to refine and improve.

In my journal, in addition to my trades, I track a few extra things like what I’m grateful for, where I can improve, and my fitness. I have an Apple Watch Ultra and my goal is to close the rings each day. My fitness goal is to get my body to sub 15% body fat while adding muscle weight. 3 years ago I was at 22% body fat. My last reading was 16.7%. My body weight has gone up from 178 to 194 during this time with a focus on strength training and adding muscle mass. So I’m losing fat but gaining weight since I’m adding muscle. I’ve discovered this is much harder to do at age 54 vs. age 24 haha. The “closing the rings” each day has helped a lot with feeling great and adding discipline to my days that I can also bring into my trading.

Today is Monday, October 9th. The kids don’t have school today, so I don’t want to spend all day trading. Over the weekend, more war news as the Middle East flares up with missiles and attacks.

I’m grateful for: My kids, my wife, the weather in Texas falling well below 100 degrees, our swimming pool in Wimberley. This pool was a big project but since it has been installed we’ve gotten a lot of enjoyment from it. And so far, no bison have fallen in.

I’m excited about: Getting back into the swing of trading. (I’ve been off the last week). Workout out with my family later this morning. Simplifying my life.

The markets had a colossal gamma squeeze on Friday, which caught me off guard. I was off last week traveling and I saw that and was like — was that the mother of all gamma squeezes? (A gamma squeeze is when market makers are short calls and then have to scramble to buy stocks and futures to hedge the short call exposure). I’m a little hesitant to dive in today. Will the markets puke it all back or go into chop mode? Too early to tell. I want to grab my 1% to 3% on the day and stick a fork in it.

I’ll write more on this trading journal process as I go in terms of my daily goals, process, and setups— here are the two main accounts I’ll be trading.

Balances as of 10/9/2023
TOS (thinkorswim): $90,374.94
TW (TastyWorks) $1,298,598.70

My goal with these accounts is to generate 1% to 3% a day on average and wire out funds each week. In a perfect world, I would be able to both wire out money each week AND grow the accounts each week. So, if I made $5,000 for the week in TOS, I’d wire out $2,500, and my account balance grows week over week as well.

There are different schools of thought on trading. One is “not” to have a daily goal and I agree there are times when you don’t want to limit yourself. 2020 is a good example of that. Buy calls and hold on for the ride. In this environment, and specifically focusing on SPX credit spreads (mostly), I think a daily goal works best and it helps turn this more into a business whose job it is to extract cash from the markets.

The markets traded down over -30 ES points overnight and open up down about -10 ES points. With an initial rally back to SPX 4300 against the two hour quant pivot (QP) on SPX, (as well as Daily H1 and 4H H2 on ES) I look for sell signals on QH (Quick Hits). I get them and sell the following:

TOS: SOLD -10 VERTICAL SPX 100 9 OCT 23 4300/4315 CALL at 6.25
TW: SOLD -100 VERTICAL SPX 100 9 OCT 23 4300/4325 CALL at 8.96.

These were at the money credit spreads. I did 15 wide on the smaller account and 25 wide on the larger account. I traded 1 contract per $9,000 on the smaller account and 1 contract per $13,000 on the larger account. My general rule of thumb is around 1 SPX contract per 10K (or 1 SPY per 1K). For ES options, it can be 1 contract per 5K, since they are half the size of the SPX. This can vary, but it is a guideline I work with. 1 contract per 50K and you really have to sit in trades longer and do more trades to hit the daily goal if it is in the 1% to 3% range. 1 SPX contract per 5K and if shit goes sideways it can turn into a long day.

Note, when I saw 1% to 3% a day, I mean a return on my account balance. So if I’m trading a $100,000 account, my goal is $1,000 to $3,000 a day.

The markets start to sell off and drop about 8 SPX points and then start to trade sideways again. I’m looking for further weakness, but we go into chop mode. I’m frankly a little nervous after Friday’s explosive rally. I don’t want to be short calls and get run over. That is extremely unlikely to happen today, but it is something that is taking up space in my head. This means I’m not really being neutral and objective here, and that is when mistakes can happen.

At one point, I’m up about 1.5K in TOS and 30K in TW. The market starts a slow turn higher, and I bail. While the charts aren’t giving me an exit signal, I don’t like how the $TICK is slowly getting stronger. I’ve got a profit here. Let’s take it and then go do a family workout with the kids.

Entry: Great entry, followed my rules. Good job.
Exit: More emotion-based with conflicting agendas, but the $TICK strength was a real tell. Ok job on the exit.

TOS: BOT +10 VERTICAL SPX 100 9 OCT 23 4300/4315 CALL at 5.60
TW: BOT +100 VERTICAL SPX 100 9 OCT 23 4300/4315 CALL at 7.34

TOS gain or loss: +$645 (.07%)
TW gain or loss: +$16,165 (1.25%)

I’m just shy of my 1% to 3% goal on TOS and I’m within my 1% to 3% goal on TW. I entered the trade at 9:02 am central and exited at 9:17 am central. This is a shorter hold time than normal for me, and I’m usually fine giving a trade more room to generate a larger gain (40% of the credit received), but again today, I’m aware that I want to go spend time with my kids and I’m a little on edge after the move on Friday. I’m in no mood to deal with managing a trade going against me today and having to manage and watch it. Plus, it’s Monday!

While the chart above wasn’t too bad, it was the $TICK that got me out. A quick 6 to 8 point move up in the SPX and I’d be underwater and I just didn’t want to deal with that. NOT AN IDEAL TRADING MINDSET TODAY!

Ok, it’s now nearing 10 am and it is time to go workout. “Had I held on” I would have hit my 40% target as the ES rolled over and traded down to 4285. Any regrets? Truly, no. I realized I was in no state to manage this trade if it moved against me and today my kids and the family workout is more important than trying to wring out every last dollar.

At the end of the day, it is a balance of managing your business in making your daily goal vs. following the flow of the market. I find that I like trading larger size with smaller, quicker targets under this cash flow model, vs. sitting on smaller trades “all day” or for multiple days. Of course, with larger size, you also can’t afford to let it go against you too much, which is why I love doing this with credit spreads.

I will come back in the afternoon and see if there is another trading opportunity. It would be a huge error today to have my accounts go negative after making solid cash after 15 minutes of work, so keep that in mind later today. You can call it a day right now and be ok.

Jackie, my workout trainer, kicks my ass for about 90 minutes with exercises like this. I’m at our place in Wimberley, TX today.

Ok, now it’s 12:45pm. I had a great workout with the family and we stayed outside for a while after. Coming back to check the markets. The ES has rallied 40 points so — good thing I didn’t hang onto my call credit spread. Of course, I also missed a solid move, but at the end of the day spending time with my kids is a million times more important than “catching the up move.” (That is a trading mantra to remember).

These $TICK readings are on fire. Friday, I spent a little time fighting the move up. I find that I like to spend as little time as possible fighting the market. I haven’t seen $TICKs as strong as Friday in a long time.

The US Dollar Index $DXY fell sharply on Friday and is currently falling. I’ve found this to be a key chart to have on hand, as when the dollar moves big, so does everything else. Dollar down, stocks up.

It is tempting to throw on a put credit here but in reality, I would be doing that at extreme upside levels, and there is no trading plan on earth that says, “When at extreme upside levels, use that as an opportunity to get long.” JOMO — the joy of missing out because I’m not being a little bitch and falling prey to my dopamine rush imagining all of the money I could be making.

1:30pm. I still haven’t done anything. Working on a few projects and answering emails and watching the markets scream higher without me. We are planning to leave for a family outing around 3 pm and — besides keeping what I made this morning — my main goal is not to be too distracted by the markets today.

For context, ES is at 4373, so we’ve rallied another 20 points since I last posted a chart at 12:45 above. Totally missing the move.

Around 1:35pm central, I finally got sell signals. I decided to sell call credit spreads here. I’m thinking this will be a quick trade.

In the large account, I sold slightly out of the money, $15 wide. In the smaller account, I sold deeper in the money, $5 wide, and decided to risk the width of the spread. Price of the SPX at the time of the orders: 4332.

SOLD -10 VERTICAL SPX 100 9 OCT 23 4325/4330 CALL at 3.10
SOLD -100 VERTICAL SPX 100 9 OCT 23 4335/4350 CALL at 3.60

The markets moved down a bit, then turned around and retested the highs and then just chopped around, even with the $TICK going hugely negative. That is always a red flag when the price action is “ignoring” the $TICK.

I exited my 100 lot trade in the larger account for a profit of .80, or $8,000 on 100 contracts. This was relatively painless since I did this one out of the money and theta decay worked in my favor. Had price responded better to the negative $TICK readings I would have gone for $1.80 instead of $2.80.

On TOS, since I did this one deeper in the money, it was already at $4.50 at this point, so there wasn’t much harm in just letting it cash settle. Maybe we would sell off into the close?

Alas . . . we did not. While I had a profit on my TW trade, my TOS trade turned into max loss, or -$1,900. A bit frustrating but this is a trade I’ve done before many times that has worked well in the past. Though shalt not fight the gamma squeeze! This one is my fault, I should have gone with out of the money instead of “getting cute” going deeper in the money.

BOT +10 VERTICAL SPX 100 (Weeklys) 9 OCT 23 4325/4330 CALL at 5.00
BOT +100 VERTICAL SPX 100 (Weeklys) 9 OCT 23 4335/4350 CALL at 2.80

How Did The Day End?

TOS: -$1,255, or -1.4%. This is in line with how much I’m willing to risk on the day, but had I done an at-the-money instead of in-the-money trade at the end of the day, I would have been up solidly on the day. This is my fault. I liked the better risk to reward on the in the money, but I underestimated how strong the market would be into the close — even with sell signals and negative $TICK readings. I’m chalking this up to it being Monday and me being a little distracted today trying to make time with the kids. Truly — why did I even put on these last trades today?

TW: +$24,165 or +1.86% on the day. Overall no complaints. On a day like this, if I’m in alignment with the market I usually would have had a much bigger day, but this falls in line with my daily goal of 1% to 3% per day.

TOS end of day

These are my TW fills.

And P&L

Summary thoughts:

Overall I felt like I was out of synch with the markets, but my entries were based on levels and signals — just against the trend, which makes it harder.

Typically, there is more back and forth in the markets — this is a gamma squeeze and I basically missed it. I think there is more upside coming but I also think after the surge of the last 2 days, things will chill out a little bit and I can get back to normal back and forth trading.

I lost money in TOS today on what I would call a user error. I’m not quite sure why I went with deeper in the money on the small account and slightly out of the money on the large account. Of course, had we fallen a few more points to 4325, it would have been a great day in the account, so genius in hindsight and all that. The TW account had a solid day. I’m flat overnight and let’s see how things shake up in the morning.

Health and Wellness

My goal is to “close the rings” each day. I have the red ring set at 1,000 calories, yellow at 90 minutes of exercise, and the blue of course is the reminder to stand up every hour at least.

Today’s wins: Great workout, time with my kids, solid cash creation day in TW account.

How I’ll improve: That last hour can really be great or rip your head off if you aren’t careful. Let’s remember that.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —-

Tuesday, October 10, 2023

I’m grateful for: My wife, my kids, our animals, the cool weather, the opportunity to trade today.

I’m excited about: Figuring out if this public journal format will work, taking the kids to Disney for our Orlando live trading event at the end of this month.

Priorities today: close the rings, get this journal published so you can get feedback.

The markets overnight are up slightly before the open. I’m looking for choppy to up price action and generally a quiet day after the 2 big days up. Probably a good idea for iron flies and iron condors, though I really don’t want to get in the way of more upside freight train action.

About 15 minute pre market, I sold at the money put credit spreads on ES options. I didn’t do SPX as it isn’t traded overnight on TOS or Tasty — though it is on other platforms like Interactive Brokers. Not a big deal. ES futures options are 1/2 the size of SPX options ($50 a point instead of $100 a point). So where I would do 10 SPX options, I’m doing 20 ES options. (Note, trading ES options is more expensive than trading SPX options since they are considered futures).

I’m looking for chop and can we test 4350 SPX which is about 10 points higher? A part of me thinks I should just leave this trade on and call it a day and let it expire worthless. I LOVE those kind of trades but that isn’t the market today. We will likely get quiet chop and some back and forth and maybe a bigger probe up or down. Just follow the pretty colors.

I also decided to add an in the money put credit spread on the ES options on the large account, for tomorrow’s expiration. This gives it a little more room.

9:05 am Central

After about 40 minutes of chop, the ES and SPX popped into resistance with a 15 point move. This is always the tricky part. Since it is still early in the day, I’m getting some theta decay but not a lot. Assuming we stay here and chop around, or keep moving higher, all I have to do is be patient and sit on my positions and collect more premium. Or, of course, the markets could roll over and my profits go away.

The futures are nice in that it makes sense to just take the gains at resistance. I close out the futures trades here at resistance. Still sitting on the put credit spreads. I’m not getting any QH sell signals so I’m just sitting. I am currently at 50% of the credit received so I’m at a point where it does make sense to take it off. Closing out half here.

9:30 am Central

Closing out the rest here. The ES has rallied 30 points and is hitting 4400, a big round number that will likely act as resistance for a bit. If I was feeling adventurous I would sell call credit spreads here, but it has already been a killer day.

TOS: +$4,100 +4.6%
TW: +$85,125 +6.4%

SPX is trading at 4366 and we will likely test 4400 this week if not later today or tomorrow. A butterfly makes sense. Not unbalanced — I don’t want to risk a blow out through that level. The market is just grinding straight up here, no pullbacks. After the action of the last 2 days I’m tempted to just just buy an out of the money call debit spread but I’m also conscious of not wanting to ruin an already solid cash flow day. PATIENCE SON.

Here’s a recap of the trades so far. I’m currently flat.

TOS Small Account

Entries

  1. SOLD -20 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4365 PUT at. 4.25
  2. BOT +2 /ESZ23:XCME at 4376.25

Exits

  1. BOT +10 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4365 PUT at 2.25
  2. BOT +10 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4365 PUT at 1.50
  3. SOLD -2 /ESZ23:XCME @4388.50

TW Large Account

Entries

  1. SOLD -200 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4350 PUT at 8.25
  2. SOLD -100 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Wednesday) (Wk2) /E2BV23:XCME 4400/4375 PUT at 14.25
  3. BOT +20 /ESZ23:XCME at 4376.25

Exits

  1. BOT +100 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4350 PUT at 3.50
  2. BOT +100 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Tuesday) (Wk2) /E2BV23:XCME 4375/4350 PUT at 3.15
  3. BOT +100 VERTICAL /ESZ23:XCME 1/50 OCT 23 (Wednesday) (Wk2) /E2BV23:XCME 4400/4375 PUT at 9.50
  4. SOLD -2 /ESZ23:XCME at 4388.75

Here is the chart of the ES and it shows where I got in pre-market. We were trading sideways, grinding a bit higher, there was a 5m squeeze developing and of course the trend of the last few days has been higher.

About 15 minutes after the open, this is what my P&L looked like. At this point I’m in the lower range of my daily goal. This is always the character-building part. Do you take the money and run? Or do you hold on for more? The key of course is just to flow with the charts. On the chart above, there are buy signals (arrows) on the far left ES. Sell signals just never developed, and then we got “the move” into 4388 ish, where is the initial resistance was sitting. This is where I took off the ES futures trades.

Small Account around 8:45am central
Large account around 8:45am central
ES Futures around 9:30am central

The markets just kept on grinding higher. Once we hit ES 4400 I wasn’t comfortable holding on any longer. This equated to SPX 4365.

SPX around 9:30am central

Closed out the ES options for solid gains.

On the larger account as well.

It’s now 10am central. The markets are chopping around at ES 4400. I’m tempted to throw on an iron fly here — but hey let’s not be an idiot. You have exceeded your goal already on both accounts. I think it’s fine to put on a cheap butterfly later today for a small risk, high potential reward trade. But to throw on some big trades here and have them go against you hard and wipe out most of your gains — or take you into a loss? Amateur hour.

You have the gold room later today from 2–3pm. Be careful you don’t get caught up in the hype, as the members will be asking about different stocks and different trading ideas, some of which will be good which can be distracting to your mission and your business.

Your business plan is to generate cash, ideally 1% to 3% a day, and to wire out funds at the end of the week while you continue to grow your trading capital. Don’t fuck it up.

I do have yoga at 11:30, so another good incentive to step away from the computer and go for a walk and get warmed up. The market will be here when I get back.

Ok just kidding. I have my workout clothes on and I’m seeing the markets continuing to drift higher. We are at SPX 4372. Is SPX 4400 in the cards today? I’m going to put on some cheap butterflies before I go to yoga. If they go to zero, I will still be above my daily goal range. And if it we get a pin of course, amazing.

My main consideration here is to focus on what happens if this trade blows up. That is why I’m not loading up on in the money calls or at the money put credit spreads. Overall, these trades are small debits and if they blow up it won’t ruin my day, and if it works, it makes a solid day even better.

11:30 am. Just got back from a 2 mile walk and am about to start yoga (the instructor shows up at our house, so I have no choice, which is the only way yoga works for me as I would otherwise sit in front of the computer and watch the TICK readings). SPX continues to march higher, about 10 points since my walk, trading at 4384. So far so good — though at this rate we could blow through the butterfly! I’ll wait till post yoga before I consider anything else. Yoga is from 11:30 to 12:30.

Yoga at our Austin garage today. Maria had an appointment and had to miss today.

12:45pm Central

Back from Yoga. SPX got as high as 4385 and then sold off to 4360 quickly. Currently rebounding a bit to 4370. ES 4400 is also right here and that may be where the pin is today. ES is trading about 28 points higher than SPX, so an ES pin at 4400 would put the SPX around 4370.

Entries
BOT +10 BUTTERFLY SPX 100 10 OCT 23 4390/4400/4410 CALL at 0.95
BOT +10 BUTTERFLY SPX 100 10 OCT 23 4385/4400/4415 CALL at 2.00

Exits
SOLD -10 BUTTERFLY SPX 100 10 OCT 23 4390/4400/4410 CALL at 0.30
SOLD -100 BUTTERFLY SPX 100 10 OCT 23 4385/4400/4415 CALL at 1.00

If we end up pinning at SPX 4400 later today I will feel that pain lol. But after that puke it takes 4400 off the table in my opinion. Salvage what I can.

2pm Central. It’s time to hop on the mic. The market isn’t doing anything and it looks like we may pin ES 4400 which would be SPX 4365.

I do put on a put credit spread in TOS and TW for a pin to 4365. In a perfect world I would get out at 1.00 or better.

SOLD -10 VERTICAL SPX 100 (Weeklys) 10 OCT 23 4365/4360 PUT at 3.00
SOLD -100 VERTICAL SPX 100 (Weeklys) 10 OCT 23 4365/4355 PUT at 3.90

How did they end up?

The trade looked solid and then in the last 10 minutes or so the markets just went “meh” and drifted lower into the close. I could have gotten out of both for small gains and probably should have — it is tough in the room to manage the trades and answer all of the questions, so I find I like to just let the trade ride or at least put a closing order on it. I did place closing orders at 1.00 but they didn’t get hit.

Results?

TOS: Lost -$2,000 on the trade. Truly, way too much. This should have been position sized as a 3 lot. At one point I could have gotten out easily at about $2.00, which would have been a $1,000 gain.

TW: Lost $25,000 on the trade. Same as above. This should have been a 25 lot trade. I could have also gotten out for a gain, but instead of focusing on the trade, I’m answering questions in the room. I TAKE RESPONSIBILITY FOR THIS. How to best do this? Just stop talking? Manage the trade? Let’s play around with this. You did have some great pins over the last few weeks in the room so don’t throw the baby out with the bath water just yet.

As I’m getting back into the groove after having last week off, remember to do your larger trades in the morning when you can focus and there is more room to manage the trade (theta decay isn’t as fast) and then smaller trades for the close, and consider more butterflies and unbalanced flies. I was too nervous to do an unbalanced fly today and have it blow up in my face.

How did the day end?

TOS: +$1400 on the day. A respectable +1.5%, but you have too much of the early gains back on that last trade.

TW: +46,230 on the day. A respectable +3.48% on the day, over your range of 3% as a target. However, you gave too much back on that last trade, and at one point, you were up just over 100K on the day with that butterfly. Note the totals below are off a bit from where the SPX listed the closing prices of the put credit spread I held into the close, so they look a little better than what’s listed above.

Small Account End of Day
Large Account End of Day

Summary

You played the markets very solid this morning. The afternoon butterfly was fine, even though it didn’t work. Your risk was really dialed in and it was a small, acceptable loss. Your last trade of the day was position-sized too big and you got distracted answering questions instead of managing the trade, which was profitable for a period of time.

Yes, it would have been great if it had worked out, but you know better than to risk that much to the trading gods in the final minutes of the day. I do need to get dialed into this kind of trading WHILE IN THE ROOM ON THE MIC as it can be a distraction. (With swing trades it is fine — the trade is managed over days). The answer to this question is to stay focused, don’t get distracted by questions that aren’t relevant, look to asymmetrical risk trades, and position size smaller. Easy peasy. Start immediately.

Today’s wins: Closed my rings — a 2-mile walk in the morning, an hour of yoga, and a 2-hour walk this evening. Ate great, focused on protein and veggies, electrolyte water, and no snacking or peanut butter etc. My first trade of the day was a win, and the butterfly was also a win even though it lost money. You followed a game plan, and your risk was small. The walk this evening was with my wife and daughter, which was a fun moment.

How I’ll Improve. Dial in on the close. Be present with your kids and hug them more. In the room, stop trying to placate the crowd by answering every question. People would rather make money.

Exercise for today

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

Wednesday, October 10.

I’m grateful for: Today’s opportunities. My health. My family. My life lessons.

I’m excited about: Seeing how today’s trading goes. Finishing a project on trader psychology that Mimi at Simpler keeps yelling at me about (reminding me politely). Today’s workout. Planning holiday travel.

Priorities: Stay disciplined. Stay hydrated. Remember the electrolytes we are 75% salt water. Gotta replenish.

For today, key market points:

  1. 7:30am central PPI numbers. CPI tomorrow.
  2. 1:00pm central, FOMC minutes
  3. We have rallied back to the mean (21 EMA on the daily chart)
  4. SPX closed at 4358. Resistance is 4376, 4400. Support 4350, 4400.

For today, PPI numbers happened before the bell and the reaction was muted. The markets gapped up and rallied into resistance in the 4375–4380 level. I’m looking for a push into 2H H1 at 4380 but I’m also fine selling a call credit spread “a little early” if we get some sell signals. Also remember 8:45am central is often a key time of day where markets can reverse into 9:20 (I have no idea why, just an observation over the years).

Learning from the past two days, today I will sell slightly out of the money call credit spreads instead of trying to get cute with deeper in the money. The reasoning for this is if we just chop around, my position will still benefit from theta decay. A deeper in the money spread and it is now a directional trade and you need market movement.

TOS, small account, 1 contract per 9K in the account.
SOLD -10 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4380/4390 CALL at 3.80

TW, large account, 1 contract per 13K in the account.
SOLD -100 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4380/4405 CALL at 8.10

Note, I like doing a 10 lot or a 100 lot since the math is easy. Technically I should be doing a 9 lot in TOS and a 130 lot in TW. With TW, that gives me room to add a little more if I want to.

SPX Chart 9:30am central Oct 11, 2023

This trade was fairly straightforward and painless. I think this is the first normal trade of the week. $TICK wasn’t extreme or anything either.

$TICK chart 9:40am central Oct 11, 2023

In terms of the trades, I set targets at 40% of the credit received. These got filled at 9:15am central, with entries at 8:50am central. Short and sweet.

TOS EXIT
BOT +10 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4380/4390 CALL at 2.25
P&L $1425.00 or +1.5%

TW EXIT
BOT +10 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4380/4405 CALL at 3.75
P&L $43,500 or +3.1%

Notes. Even though I’m trading larger size on the smaller account, I went with a $10 wide spread. With the large account I did smaller relative size, but did a $25 spread, so I had a fatter credit to work with. Wider spreads work faster since that far away long option can die quickly.

9:45am. Ok, I feel like the easy trade is over. FOMC is at 1pm central. The trainer is here for Maria already. My workout isn’t until 10:30 but I’m thinking it would be smart to go get it over with and come back to the markets post FOMC. Making money is the easy part. Keeping it is the game.

1:25pm. Had a great workout and then had to knock out a zoom call on some new software we will be using in the room. Zoom calls during market hours are always tricky but I definitely wasn’t going to trade anything until after the FOMC minutes were released and the markets had time to settle in. Some workout highlights from today.

I really don’t like these buy my trainer says they are good for me.
Way more fun than those horrifying lateral lunges above.

The markets right now are up 20 ES points since the minutes and the TICK is strong. This is always tricky. Jump on the train or be patient? The answer is, you never know what the market is going to do next. There are only probabilities. I either have an actionable entry signal, or I DO NOT HAVE AN ACTIONABLE ENTRY SIGNAL. Don’t be a little bitch and jump in because of dopamine induced enthusiasm for market action. Don’t let the market take away the money I extracted from it this morning. Tell them Rihanna.

Snapshot just before I hop in to the room

As I hop into the room, I’m thinking in terms of unbalanced butterflies and SPX 4400 for today or tomorow. We’ll see. The last 2 days the close has taken money from me. Let’s address that today by focusing on better probabilities and, dare I say, possibly doing nothing.

2:30pm. The markets keep drifting higher. I start looking at trades like an unbalanced butterfly at 4365 for a credit — but then I’m looking at the $TICK “AND” the CPI is tomorrow morning so I’m definitely thinking this market could go ape shit into the close. My main goal here is not to give back gains from this morning.

2:40pm. At this point the markets are drifting higher. I try to sell a 4370/4365 put credit spread and I can’t get filled. The market drifts higher. $TICK is relentless. I roll up and try to sell a 4375/4370 put credit spread for $2.00. This isn’t quite what I had in mind in terms of “asymetical risk” but the market has a hard drift higher here. I do remember my journal entries from Monday and Tuesday and I do 5 lots instead of 10 in the small account, and 25 lots instead of 100 in the large account. There is hope that I’m learning haha.

TOS RECAP
SOLD -5 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4375/4370 PUT at 2.05
BOT +5 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4375/4370 PUT at .75

Nice clean trade. I also bought 10 4385 calls for .25 in case we explode. They ended up expiring worthless — totally fine since my loss was $250 against the gain of $650 on the put credit spread, so gain on the close was $400.

TOS End of Day: +$1,850 or +2.1%

TW RECAP
SOLD -25 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4375/4370 PUT at 2.05
BOT +25 VERTICAL SPX 100 (Weeklys) 11 OCT 23 4375/4370 PUT at 1.00

I just noticed I did $5.00 wide instead of $10 wide. Probably a good idea end of day. I didn’t do long calls. Total gain on this trade: $2625

TW End of Day: +45,125 or +3.3%

TOS account end of day
TW account end of day
End of Day Oct 11, 2023

Summary Thoughts

Truly an amazing close and I caught just a little piece of it. I’m totally fine with that. The last 2 days, I’ve given back gains into the close. Today I added a little bit of gains to the morning gains and hit my daily goal range in the small account and beat the range in my big account. No complaints as this kind of daily consistency can compound rapidly.

For today’s close, I also ignored more questions today. Not sure if people appreciated it but I’m trying to focus on the SPX close and there are questions about stocks I haven’t even heard of. Should I stop EVERYTHING and take a moment to review charts for stocks I haven’t heard of and get distracted from the closing trades. Can I get a HELL NO? Stay focused. Overall good job staying focused today and just having fun with the fun and insanity of trading real money in front of a large audience.

Today’s Wins: Great workout today, nice trade this morning, great job not giving anything back into the close and succumbing to the dopamine. And the trades I did place were smaller size. Maria and I and all 3 kids went to dinner tonight for some sushi and ramen — a rare event with sports practice and all the things happening. I ordered a Meta Quest 3 and it came in today — I set it up and did a few rounds of Beat Saber. I forgot how head clearing that is after a day of trading. Not quite like yoga or meditation, but still head clearing.

Another day of closing the rings

How I’ll Improve: Remember to compliment Maria. Some trading days I get in the zone and can get lost in thought. Working out of an office that isn’t bad as she isn’t around. Working from home and it’s like, bruh, hello? Do you see me?

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Thursday, Oct 12, 2023

This morning is CPI day, usually a day of volatility though it seems more and more to be baked into the pie. In the room yesterday we talked about doing an iron fly since the premium was so high. I passed as I didn’t want to have to manage a shit show this morning while doing a live class. It looks like the trade would have worked perfectly.

I am doing a live online class this morning with QH and QP. These are always a challenge in terms of meeting my daily trading goals as I’m trying to pay attention to questions and make sure everything is answered — and then I’ll miss signals to exit or just get distracted and “assume this trade will work out” so I don’t manage it as closely as usual. Not as big of a deal for multi week swing trades, but these are day trades and need paying attention to. For today’s class, I’ll try to treat it more like a mentorship. “Be quiet and watch.”

I’m grateful for: My family, the lessons learned this year, the opportunity to teach others trading.

I’m excited about: Seeing how today turns out. Can I power through today and get the class, zoom meetings and recordings done? (Sorry Mimi lol). I scheduled massages for Maria and I tonight at 7pm.

Random Thoughts: Last night when I mentioned the massage to Maria, she was excited. This morning as she was making breakfast she said something to the tune of, “So and so wanted to meet tonight and then this other person wanted me to do something for them. Do you think I should stick with the massage?” I believe my answer was, “Uh, yeah.” I’ve gotten a lot better at saying no to random asks. Maria is a much more open and nice person than me, so everyone is always asking her to do things with them . . . for them? It’s nice to be wanted, of course. But we have to take care of ourselves and preserve our energy and life force. Or at least I do. Otherwise I feel drained and when I feel drained I tend to shut down as an act of preservation.

Priorities: Class, stay on point with your trading today and don’t get distracted answering the mundane. Close the rings. It will be a challenge today as it is yoga day (doesn’t burn as many calories as strength day) and I didn’t walk this morning, so I’ll have to do a 4 or 5 mile walk later today. WHEN?? Definitely should have knocked out 2 miles this morning, but I needed to catch up on sleep. The class starts in about 20 minutes. My daughter also said she wanted to do a trade today so maybe a 10:30am iron fly would work there as something easy for her to manage.

8:00am markets are basically flat post CPI. A premium collapse.

10:30am. Teaching a class this morning. Markets a little weird with post CPI. Negative $TICK readings and a strong dollar . . . but NQ is up on the day. Ended up selling a put credit spread in QQQ and NDX since this index was strong and SPX was doing nothing.

This is what the NDX looked like.

TOS
SOLD -15 VERTICAL QQQ 100 (Weeklys) 12 OCT 23 372/367 PUT at 1.05
BOT +10 VERTICAL QQQ 100 (Weeklys) 12 OCT 23 372/367 PUT at .60
BOT +5 VERTICAL QQQ 100 (Weeklys) 12 OCT 23 372/367 PUT at .92

Total gain: $515 or .055% on the day.

My daughter wanted to do a trade so we threw on a 3 lot SPX iron fly and that is currently working. I may add to it.

TW
Sold 100 NDX 15275/15250 pcs at 9.20 with various exits 20 lots at a time.

Total gain: $21,100 or +1.5%

11am: Overall notes: Today tougher than usual as I’m trading during a live online class and am trying to field lots and lots of questions while trying to stay in the zone in terms of staying in tune with the markets. There’s also a zoom call coming up where I have to demo the platform during market hours. This isn’t a big deal when I’m swing trading, but with day trading SPX, it is better to have no interuptions. Exceptions are working out and yoga are a good break that sharpen the mind.

I also found myself defending placing a trade for my daughter. I walked her through a trade in front of the class and had a few snarky comments about how “that will make a rough transition to the real world.” My thought on that has always been we are trained since childhood to value ourselves based on an hourly wage or salary someone else is willing to pay us. F*ck that. Let’s break the construct of what is considered normal and tap into possibilities. Does someone who makes $250,000 a year work ten times as hard as someone who makes $25,000 a year? Nothing wrong with normalizing no limits. Interesting conversations followed.

One of my favorite quotes on this is from The Instant Millionaire by Mark Fisher. “Mediocrity is never daring to do what you love, for fear of what others will say or for fear of losing your security.”

Just before yoga, I put on an iron condor and an iron fly. I very likely would not have done this, but they asked about it in the class so I obliged and I did full size. It is always a tough balance — managing the class and wanting to help them while trying to stick to my guns in terms of my own account goals. This is what I signed up for so I’m all in. Plus — the markets won’t do much over lunch. Right?

Here’s what I came back to after yoga.

I did have a chart on my iphone out of the corner of my eye during yoga. The markets were very quiet and then toward the end I noticed some brisk selling. I didn’t think it would be intense. By the time I got to my computer, the $TICK was imploding and it was ugly. I got out of the iron condor and the iron fly for losses. With iron condors the goal is to hold onto them when the market is quiet, but because of the risk to reward being used, there is not excuse for holding them for a big loss. I cut them loose when we hit SPX 4350, which was the sold put on the iron condor and it was the width of the iron fly. SPX traded down to 4325 so a good call there. The markets ended up coming back to 4350 so the iron condor would have been fine but the iron fly would have been max loss. When the $TICK goes ballistic like that, I’ve learned never to question it. Just get out and wait for the next setup.

This took my TOS account down to -$3,000 ish on the day and my TW account down to -$12K ish on the day. A little too much on the TOS account as I pushed position size there. Well in risk range for the large account.

Ironically, my daughter’s trade hit her target during yoga, since she was just looking to collect $400 of premium, about $1.50 on a 3 lot SPX trade. I’ve learned a lot watching my kids trade. A smaller target, and I would have been out, too.

I took the next hour off and came back at 2pm to see what was happening. As you can see in the chart above, the SPX did bounce hard off of 4325 and the $TICK was supporting the move. I sold 4340/4335 put credit spreads in TOS and 4345/4325 put credit spreads in TW. This put credit spread worked fine without any issues . . . and basically almost offset the loss from the iron condor, leaving me positive on the day in TW, and down “not quite as bad” on TOS. These are the trades I like. Watch an extreme move, and then look for the snap back once everyone stuck in the move is destroyed.

TW SPX Trades
TOS End of Day
TW End of Day

I did throw on a lotto butterfly on TOS for a 4365 pin as kind of a cheap Hail Mary play but it didn’t pan out. That was for a .25 debit on a 10 lot, so a $250 loss. Totally acceptable.

Totals for the day

TOS: -$1,500 or -1.6%
TW: +$19,880 or +1.4%

Summary and thoughts: The smaller account has had a rougher go of it today with my position sizing and really for the entire week. The main killer today was position sizing on the iron fly. That should have been smaller size. In TW, the put credit spread got me back to positive on the day, but in TOS it just helped throw some dirt in the hole and make it less big.

For the TOS account, I’m trading it like its 100K and in my mind I’m thinking in terms of being able to wire out money “once it is over 100K.” Do I stick with the current balance and work up to it or just add 10K and trade a damn 100K account?

Also, I pay more attention to the TW account. It is, as the saying goes, “material.” Meaning the money I can create in that account and wire out has a material impact on my life, as most of the money generated there goes into real estate, mortgages, rare coins, investments and day to day. For TOS, maybe look at a purpose for those funds? Look to wire out $1250 a week for a specific thing, and you could only buy it with funds from TOS? Rolls of silver coins? Think on it. It has to mean something or its just a game.

I don’t have any overnight trades on. Tomorrow is Friday and the motto is always, “Don’t lose your ass on a Friday.”

Closing thoughts: I made today harder than it needed to be. Lighten up a bit. I can be too hard on myself.

By the time the market closed, my rings were nowhere near closed, so I went on a near 4 mile hilly walk and that helped. Then Maria and I got 90 minute massages at Austin Deep and that was the best idea of the week so far. It took me a while to come down from today. I need to go to the beach.

Today’s Wins: Helping my daughter trade, the long walk after the close I didn’t want to do, getting massages, cooking steaks.

How I’ll Improve: Let’s make all this more fun. Why so serious? I either need to enjoy trying to simplify things or embrace a new big hairy audacious goal.

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Friday, Oct 13th — Friday the 13th! Bet it all.

This whole week I’ve been sleeping for about 5 hours a night and getting up without an alarm. Last night I rocked my sleep score. I needed some catch up.

I’m grateful for: The opportunity to do it again and try to make it fun. Maria and the kids. Zebras. I also learned that one of my rare coins, the 1794 SP66 Silver Dollar, is going to go on a tour to the major coin shows next year. I remember being 14 years old and thinking how amazing it would be to own a 1794 Silver Dollar, even in crappy condition. The one below is the finest known and has only changed hands a few times in its history. It is the first one ever minted and in the best condition of the handful of mint condition coins to have survived. When it came up for sale I happened to have enough trading funds to take it off the market. I learned a little later it’s one of the rarest coins in the world.

I’m excited about: Hiking this weekend. Finalizing plans for Cayman over Christmas break. Do we dare go to ACL? I have wrist bands. But . . . crowds and noise.

Priorities: You have a list of little things piling up. Spend a few hours knocking them out today. And remember to have fun and be present.

For this morning the markets started off with light strength. I waited until the numbers hit at 9am central at which point we started to drift lower into initial support. I set up a put credit spread on the SPX.

The markets chopped around for about 20 minutes and then broke lower. The break was fast with the SPX dropping 20 points quickly on some news out of the Middle East. While this was happening, I was getting ready for a zoom call and fielding questions from Maria. She popped her head into my office and asked, “Are you in the thick of it? Do you have time for a few questions?” It’s always so hard to explain to your spouse that when the markets are open, I’m in the thick of it, even if it looks like I’m not in the thick of it. Just text me. :-0

Of course, I don’t want to be a hermit either. The point of trading is to create some freedom of cash flow and freedom of schedule. Maybe I need to program an AI to trade for me, or hire an assistant to stare at charts.

And, again, I’m talking about day trading here vs. swing trading. A much different ball of wax.

But the goal also is to trade in a way where you have some freedom throughout the day. To that end, the type of trading I’m focused on right now (day trading 0DTE SPX) is a lot more focused and intensive than multi week swing trades. Part of my process this week is to find a way to do this in a simpler way. That may mean limiting trading hours. Done at noon and at that. Or a focus on trades that require less management such as butterflies. If you can make your daily goal, having it be hard doesn’t win any extra points vs. if it was relatively easy.

We did get a 22 point bounce and for a moment it looked like we might even rip back to positive on the day. However, once the dollar stopped drifting down, the rally way over. We also stopped at the falling 21 EMA on the 30M chart.

TOS
SOLD -10 VERTICAL SPX 100 (Weeklys) 13 OCT 23 4350/4335 PUT at 4.15
BOT +10 VERTICAL SPX 100 (Weeklys) 13 OCT 23 4350/4335 PUT at 6.30
LOSS: -$2,150 or -2.4%

TW
SOLD -100 VERTICAL SPX 100 (Weeklys) 13 OCT 23 4350/4325 PUT at 5.45
BOT +100 VERTICAL SPX 100 (Weeklys) 13 OCT 23 4350/4335 PUT at 8.15
LOSS: -$27,000 -1.86%

During this time I was on a zoom call for an hour, and then once that ended I took my daughter to go get a smoothie and some lunch.

I jumped into the gold room for the last hour and there was nothing happening. Usually if I’m going to try for a pin on the day, I do it with a small portion of open profits. Since I was down on the day, I passed on trying for a pin, as I didn’t want to make the losses any worse.

For the big account, it was a solid week, up 4 out of 5 days. Today was a bit of a pain and not a great way to end the week.

If I could do today again? I did jump the gun a bit by anticipating that the level would hold. Basically — multiple support levels didn’t hold. I didn’t get any confirmation arrows on QH. Had I waited for up arrow to confirm, then I would have passed and taken an entry near 4325 when we got a turn and a quick pop higher.

Why not sell call credit spreads at the open? In hindsight, that was obviously the better play. I generally like to sell credit spreads on rallies into H1, but I didn’t want to do that before the consumer confidence numbers.

Lessons learned and observations for next week:

Small account had a tough time this week, down $3,249 or -3.6%
Large account fared better, up $99,816 or +6.9%

  1. Get dialed in on position sizing. Position sizing in the small account was a lot bigger than the large account (1 lot per 9K vs. 1 lot per 14K).
  2. It is tough trading two accounts day trading. Doing multiple accounts, swing trading is a lot more manageable. Entry points are over a couple of days, as are exits. Precision not required. A day trade can flip dramatically if you don’t get out on initial exit signals. I probably should just be trading the large account as that is the one that has a material impact on me, though I like the smaller account to use for posting in the gold room.
  3. Day trading with an audience is a lot harder than swing trading with an audience. On my own, I can make adjustments, throw on futures as a hedge, etc. Make it cleaner and easier. For everyone.
  4. It is also tougher trading 2 accounts that are not multiples of each other. It would be easier if it was a 100K account and a 1000K account. That way whatever I’m doing in the large account, I can just mimic it in the small account with 1/10th the size. I will probably do that and have that setup on Monday. That would mean taking some funds out of the large account and adding some funds to the small account to bring them to scale with each other.
  5. Consider also just going for that 1% a day as that can add up. That is 1 out of the money credit spread and you are done. Again, the goal is to make this easy. You aren’t trying to catch every move. You are trying to extract some cash.
  6. Consider only trading T, W, TH. Trading every day like this can grind you down. Or at the very least pass on Friday haha. Today I was supposed to knock out a lot of projects, and instead I had to babysit a trade for the first half of the day. My todo list did not get touched. Last thought, Monday and Friday are the best days for further out of the money credit spreads. More back and forth and uncertainty on these days.
  7. Last night I pushed my Friday workout to Saturday. Working out is probably a much better use of your time on a Friday, though I felt like I needed a recovery day.
  8. Do your room trades and large account trades have to be the same? In doing the trade today, you had to field a barrage of questions about the stop loss. Even if I mention $2.50 is the stop and hey, it went down fast so let’s wait and see if we get a bounce back to 4350 to get our $2.50 loss — some people don’t do anything unless I post the exit. I get it. But I’m also operating on my own, without an assistant, and I’m doing zoom calls and taking my daughter to lunch and working out. Everyone should take responsibility for their risk. If I can post it, I will — but there are times when I’m not in front of the computer and the order hits. Emphasize this on your alerts. Everyone has to learn to swing the club on their own.
  9. Although the day trading is more intensive, it doesn’t work if it is a ball and chain. Work on ways to make this EASIER for you to do and EASIER for people to follow should they wish to follow you. Grab the cash and then go do something else.

Comment from Sam in the room this morning when fielding a question from a client, who said he lost money trading futures during the first hour. “You don’t have to make up your losses from this morning. The idea that you do is the beginning of gambler’s fallacy. Just wait for your next setup and control your risk.” I thought about that as I was contemplating doing another trade to “help offset the loss” on the put credit spread.

For next week, really get dialed into the cash generation aspect of this. Truly, that is the only reason to be doing day trades. Swing trades are for growing your account. Day trades are for generating cash flow. This means:

  1. Fewer trades — you aren’t trying to catch every move and you don’t need to trade every day. Embrace the Joy Of Missing Out (JOMO). The danger of day trading is that more trading = more mistakes due to mental fatigue and impatience. This is magnified when having to manage OPA (other people’s anxiety).
  2. Consider more asymmetrical risk trades. Credit spreads are the highest probability in terms of a win rate. But a cheap debit spread or butterfly won’t hurt as much when it doesn't’ work and will pay off much bigger when it does work.
  3. In the first hour or so, further out of the money credit spreads will give you more room and also decay a lot faster. (This contradicts my above point, but they do work quickly).
  4. Setup trades in such a way that elicits the fewest amount of questions in the room. This means wait for arrows and look to be a little late as opposed to your habit of being a little early. This helps everyone.
  5. Consider further out of the money credit spreads that expire the next day (1 DTE) as they would be more forgiving if the markets moved against your position.

Today’s wins: Taking my daughter to lunch. Picking up my son from school.

How I’ll improve: This needs to be fun and not a ball and chain. Figure it out. I found my best trades tend to happen after about 9:30am central. The markets have had time to move and I’ve had some time to observe the action. You jumped the gun this morning. When in doubt, stay flat and wait a little bit longer.

5:30pm. Time to head to my oldest son’s soccer game and then we’ll head to Wimberley. I may need to do a night hike to close the rings :-0

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John F Carter

INC 500 Founder, Simpler Trading. Member: EO, YPO. Husband & father of 3. Options trader. Rare coins, home schooler, zebra breeder. Author, Mastering the Trade.