I always thought I was disciplined. Written plan, max risk per trade, criteria for entries, no earnings plays, size based on account percentage not gut.
At least that's what I thought.
Went back through 150 trades and graded each one pass/fail on 5 things: (1) did the setup meet my scan criteria, (2) was position size within 2% of account, (3) did I enter at my planned strike and DTE or did I adjust, (4) did I have an exit plan before entry, (5) did I follow the exit plan.
55%.
Biggest fail category was #3. I'd find a setup that met my criteria but then go one strike closer to the money "for more delta" or shorten my DTE because premium felt expensive. Small adjustments I rationalized as smart but that completely changed the risk profile.
Second biggest fail was #5. Plan to close at 50% profit and then hold for more. Plan to cut at 30% loss and then average down instead.
The compliant trades are profitable. The non-compliant trades are not. Both groups are mixed together in my P&L and I never separated them until now.
Built a tool to do this audit automatically because the spreadsheet was brutal. If any options traders want to try it free and give feedback I'd appreciate it. Need about 10 people who actually trade regularly.
Tracked 150 options trades. I only follow my own rules 55% of the time.
byu/Acesleychan inoptions
Posted by Acesleychan
2 Comments
that 55% number is actually the most valuable thing you found, most people think their edge is the strategy, but it’s really just execution discipline, the fact that compliant trades are profitable and non-compliant aren’t basically proves your system already works
fixing that gap probably matters way more than tweaking entries or indicators tbh
That 55% number is actually huge because it proves you have a system that works, you just aren’t letting it. I found that my biggest leaks were always the ‘small adjustments’ for more premium—basically turning a high-probability income trade into a directional gamble without admitting it.
I feel the hardest part of trading for income isn’t finding the setup, it’s the boredom of actually following the exit plan when the math says to. I try to stopped optimize mid-trade and just treated it like a business process.
Btw, interested in your tool