October 2024 P/L Challenge - Trading Discipline

Oct 2024 marked my 5th month in investing.

In June & July, I was setting up my portfolio, just experimeting and immersing myself in the new environment.

In Aug & Sept, the USD devaluation swept away a big chunk of my capital. By this time, I still knew very little, so my attitude was that of risk-aversion. I bought up a lot of high dividend stocks, which turned out to be dividend traps,  and US WHT made it a double wammy. So, undoing those mistakes was what I set out to do in Sept.

Now, after a lot of rummination and condesation of thoughts,  I have finally  identified option-trading as the key pillar to my US stock strategy, as opposed to the buy-and-hold as my MY/ SG strategy.

For option trading, I deploy both the DIY and the outsourced approach (option income ETFs), but eventually, I want to move to the DIY approach to have more control and less fees incurred.

The diciplines to option trading, from my very small pool of experimental samples, as I have discovered and am now putting into practice, are as follow:

1) Go for an industry or industries that you know well, eg. ones you've worked with or done business with, and know intimately. This makes analysing individual companies much easier later on.

2) Screen out those in your prefered price range (important since it correlates with option price), meets your desired IV% and are solid companies (since we have to buy at least 100 units to do option trading, I can't afford 2nd and 3rd grade companies, the stakes are high and I'm playing safe)

3) Study the individual companies to ensure no red flags in PnL and news. And set a target price based on TA to catch these stocks at their low. I started my list recently, and here is the WIP version to get myself ready to move from the sandboxing phase to the serious phase in Nov and Dec.

After many past mistakes, prework and pre-learning are now 90% of what I do, and execution and monitoring are 10%. Sad to say, in my sandboxing phase, it was the other way around.

The following are my low-stake experiments as part of the prework and pre-learning.

As a result, I finally saw green in my Oct PnL and in the process of closing the performance gap with major indexes, much to my relief.

To all the option trading sifus out there, did I miss anything?

I hope my bossy Moomoo Tom approves of my actions:)