Musings

 All my losses has been made with the intention to cut losses out of fear of making losses. however would not have resulted in the losses had i left the position as it is as the positions were anyway sufficiently OTM and the position has recovered after i booked losses.  Most of the losses is after the day of fall - which means that having seen the fall has shattered the confidence and subsequent news flows has already shatter our confidence in the market. the next day even if there is slight indication of market falling further, i cover the loss positions in the fear.  Some of the adjustment that i have made - has resulted in avoiding losses and these adjustments were thought through with exact scenarios played back in mind in the morning and implemented during the day. However the trade that i have taken in panic without plan has always resulted in losses and not let me to think of adjustment trade.  Now that we know that my losses are majorly because of 2 reasons ...

1. Over come fear of losses - 4 out of 5 times your sold positions won't be ITM - hence do not book losses with the fear to cut losses early on - since all your trades are already taken far from the strike with conservative return expectation - there is no point to fear- next time in case if you are incurring wait for the vix to go down , if it sustains do adjustment If the delta increases through the expiry      - move the trade farther away with increase in capital deployment      - wait till it reaches ITM and roll over      - if 50% distance covered on call side- move the put side closer by 25% and move call side by 25%      - if 50% distance covered on put side - move the call side closer by 50% and move the put side by 50%      - roll over early on when roll down position of next expiry is equal to the current expiry- so that the loss on adjustment is minimised (e.g ITC October to november roll over) ...

1. Unpreparedness for extreme situation / scenarios - lack of adjustment trade plan 2. Taking trades that you are not fully convinced enough (Sep series short straddle based on suggestion from PR Sundar)  3. Lack of conviction / stickiness to the plan (sep 1) 4. Tendency to take the revenge trade as soon as possible - it is a very common behaviours to scout of revenge trades to cover up the losses. First of all,we need to understand while we took profits with smile, we should also take losses without too much regrets. Losses should give us learnings and not regrets, because at the end of day it is you who made losses not some one else - hence don't get too harsh or angry on yourself and take revenge trade . Secondly, whenever you are taking losses it means like market might have moved violently and  it would hit your stop loss. Which means that markets are volatile and most likely it will stay like that for some time- even if market shows some form of stability- we need to be ...