Semi-rant, but more a cautionary tale

I started the year with the goal of seeing how much I could build up a small account of $2200. I decided that I would start out risking about 50% and scale back as I grew it. I eventually got that little account up to $9100 by buying SPX calendar spreads and selling NDX iron butterfly 0DTE’s.

I had down days, but I was pretty diligent about cutting my losses if they got to be more than 50% of what I stood to gain. Most of those iron butterflies had a max risk of like $600 and a max profit of like $2k (not that I’d ever hold into the end of the day…or so I thought).

I had to trade every other day to avoid the PDT rules, so I would alternate the IB’s with the calendar put spreads. Then, Monday I got buried on an IB that had a max risk of $1600. Basically, had to take my eyes off of things just long enough to get in a hole. So, I figured that I would let it expire and take my medicine. This would give me three trading days to try and build it back up.

Yesterday, I figured I would give myself a little more room to breathe and sold an iron condor. Larger max loss, but higher percentage of getting something green. Around 10:15a, the trade went against me. I had to find the big drop at 3:30p to salvage a $500 profit. My original plan was to cut and run at $300 profit, so I was happy.

Today, I sold another IC. Then the Nasdaq went apeshit at like 10:15a again. I was buried quick. I had to let it run out again. Down $4k this week ($5100 in my account).

Tomorrow, I’m back to conserving my downside with IB’s. I want to take a break, but I also need to learn how to carefully pull myself back up.

The only thing that has kept me alive is risk management. As soon as that went away (the condors), the rules change. I’m trying to learn as much as I can with this little account. It’s a hobby account, so I’m trying to keep it fun.

Hopefully my little cautionary tale about position size helps someone else avoid some pain. Thanks for reading (if you’ve made it this far).