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What Are Your 2016 Options Income Trading Goals? (Free Download)

“Most people overestimate what they can accomplish in a year and underestimate what they can achieve in a decade . . .” -Tony Robbins

options income trading goalsListen, I know writing a post about goals is about THE most cliche thing you can do at the beginning of a new year.  At the same time, it’s important to recognize what we want to accomplish and set up a plan for getting there.  I’ve generally been okay about my goal setting process, but one of the things I will do moving forward is hold myself accountable to my goals on a monthly basis.

Note that I didn’t say, “Want to do,” I said, “Will do.”  Intention matters.

In trading it’s easy to bounce around between different strategies or indicators and drift in the endless nonsense that is the financial media.  If you aren’t happy with the results you’re achieving, it’s time to evaluate why you’re in the markets and what you hope to accomplish.  Goal setting helps us become more deliberate and create intention in our daily actions.  Additionally, having formal goals translates those things you “want” into actionable steps you’re working towards.

So what do you want?

Money.  We all want money.

Trading tends to attract relatively competitive people who want to earn an outsized amount of money.  While there’s certainly no harm in wanting to make money, money is a byproduct of a good process.  Additionally, we generally want money less than the feelings we think we’ll get from money like security, freedom, and certainty.

When we’re setting goals it’s important to recognize both what we’re trying to accomplish and why we want that particular outcome.  For example, suppose your goal is to be a full-time, self-employed trader.  Why?  Do you associate that outcome with freedom and, if so, what type of freedom.  If you’re really hoping to have more free time by being a self-employed trader, you’ll want to focus on strategies that require less screen time and shy away from strategies like trading weeklies or day trading.

A good exercise to understand what you really want is to continue asking yourself “Why” until you get to the real answer.  Pretend you’re the annoying little kid again.  Why?  Because it will help you understand what you really want.

Process vs. Outcome

I prefer to focus on process, rather than outcome based goals.  Process refers to the habits we adopt on a daily basis while outcome obviously measures results.  The challenge with focusing entirely on Outcome based goals is that we can’t always control Outcomes, but we can generally control our Process.

A good example of a Process goal is that I will follow the rules for trading the CIB every month of 2016.  The trade is a designed to be a monthly income trade so I’ll put it on every month.  At the same time, that doesn’t mean that I can automatically expect to return 3% (the rough target) every month.  I can’t control the market environment and some months will be better for the trade than others.  This month, January 2016, is a good example . . .

The markets sold off heavily after coming into the new year and the trade was up a little money before hitting the downside roll point.  After hitting that level, I closed the trade and haven’t reopened it because we only had 42 DTE and the market is fairly volatile.  I certainly could reopen the position, but there’s no harm in giving the market time to settle down.  I didn’t quite hit the target I wanted during the cycle and that’s okay.  I didn’t take a loss either.

We can’t control the market environment and not every month is going to be great for income trading.  We can, however, control our actions and adopt positive expectancy habits like managing risk, tracking our trades on a daily basis, reviewing closed trades, and following our trading plan.

What are my goals for the site?

In case anyone is wondering, I have some bigger picture goals for the site in 2016.

First, I’d like to diversify the Butterfly strategies I’m trading a little bit.  I’ve seen some really interesting Broken Wing Butterfly strategies over at Capital Discussions and they’ve sent me down the path of exploring BWB’s in more detail.  I don’t have any strategies formally developed enough to share at this point, but I am test trading various BWB’s to get a better sense of how the positions feel when they’re traded.

If you really want specifics, I’ve been exploring out of the money Put BWB’s with a short Delta strike around 25-30 with 70-80 DTE.  The order and fill specifics are publicly available and visible in the Results spreadsheet.  I have no idea how they’ll go because I’m new to them, but part of my process is sharing what I’m learning and working on with you, the reader.

My second goal in 2016 is to increase the sample account size to somewhere in the 20-25k range.  The obvious fear when you increase capital is not performing.  It’s time to realize that fear is just that, fear.  The CIB performed well in 2015 and there’s no reason not to allocate a little more capital to the strategy.  I plan to make that change sometime this Spring.

A more immediate change for the sample account is that I’ll be increasing size starting, well, now.  For the next expiration cycle, I’m going to increase the base size on the CIB from one to two Butterflies.  This is going to push the allocation in the sample account into the more aggressive range, but I feel confident in the performance of the strategy.  I haven’t decided if I’ll be scaling in to the two Butterfly size or putting on an initial position with two Butterflies.  Stay tuned on that front.

The Big Goal

The last, but most important, goal I’d like to bring up is helping you.  I’ve been trying very hard to listen to feedback from readers and add content where you’re requesting it.  In fact, the post on Meditation was a reader request (you know who you are S).  My goal is to make Theta Trend as relevant and helpful as possible because I want to see you become a consistently profitable trader.  Don’t hesitate to get in touch if there’s ever something you’d like to see covered in more detail or you have questions about.  I’ve been getting a little backed up on email lately, but I do my best to respond within 48 hours and you will receive a response from me.

Bonus!

As a little bonus for being a loyal reader, I created a goal setting worksheet for you to use.  You can download the PDF by clicking the link below.  If nothing else, I hope reading through the sheet will cause you to think about what you’re trying to accomplish and where you want to go.  Here’s to a profitable year!

What about you?  

Let me know your 2016 goals in the comments below or via email info[at]thetatrend.com!  

Click below to download the Goal Setting Worksheet:

Goal Setting Worksheet

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  • The Lazy Trader

    Thanks for sharing that Capital Discussions web site. I had never heard of it and will be having fun for a few days with it.
    LT

    • Dan

      Sure thing LT. Tom Nunamaker and Jim Riggio run the site. They’re great guys and the video content there is excellent. You’ll enjoy yourself!

      Dan

  • sherin pat

    Thanks Dan for sharing the Goal setting spreadsheet. Sticking to process will mostly bring the outcome one is looking for.

    • Dan

      You’re quite welcome and you’re right. We’re much more likely to succeed when we lay out a plan for where we’re going and focusing on what we can control. Thanks for the comment!

      Dan

  • kUser

    Thank You Dan!

    • Dan

      Absolutely, thanks for stopping by!

  • This is another great post. Trading is not about being right. Trading is a game of math. It is about finding setups that offer you a good risk/reward. Consistently profitable traders just make good trades. They accept that they cannot control the results. I try not to judge a trade based upon its results. A profitable trade made or made not have been a good trade. Consistently profitable traders are obsessed about making one good trade and not money. I am not trying to make money as a trader.

    My focus is on doing the right thing. I know that sounds radical since most traders are doing it to make money. But I find that profits come from doing the right thing consistently over time. We can’t control short-term results but assuming your trading strategy has an edge, you should come out ahead.

    • Dan

      Jonathan, your sentiment is exactly right. I know it can be hard to separate our emotions from the P/L and, at the same time, it’s absolutely necessary. We can control the actions we take every day, but we can’t control the markets.

      There’s a cool YouTube video you might enjoy as well:

      If we make positive expectancy decisions over time, we can put that math to work for us.

      Dan