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Staying on Track: Managing Your Trading Plan During Vacation Season

Updated: Jun 29

Memorial Day weekend is coming up, summer is approaching! It's that time of the year where many of us take a well-deserved break to relax, rejuvenate, and re-energize. You might be planning to hit the beach, explore some hiking trails, or maybe it’s a staycation.

As a trader you might find yourself worrying about your portfolio while sipping on that Pina Colada or hiking the Appalachian trail. For me trading is my full-time income. The bills don't take a vacation so I wanted to discuss how I manage my trading plans during vacations.

This won’t be a surprise to the regular readers as I think every single post I’ve written mentions the Good Kids Trading (GKT) principals of trading small, trading often, and trading mechanically. The reason is this strategy works wonders, especially when you're away from the screen. Here's how I manage my portfolio while I'm out and about enjoying life.

First concern for me is all about risk. You know we have defined risk and undefined risk trades. For defined risk trades, I don't set a stop based on my size. Why? I wrote an article on it here.. Defined risk has a max loss, so when I’m not actively monitoring the market it either hits my profit target that is setup GTC, or I will manage it when I return fully understanding trading small I can take a full loss on some defined risk trades.

My larger concern is my undefined risk trades. And to be clear I take a lot of undefined risk trades. I used to be afraid to leave these on while I was gone, but I think experience and repetition helps with most of the fear. Here’s what I do if I have undefined risk trades (like strangles) that are fairly profitable - let's say above 30% profit when I'm aiming for 50% - I'd go ahead and take off that trade. This reduces the possibility of a sudden market swing wiping out my profits while I'm away. The only exception for me is if I have a short put that is profitable, but I still wouldn’t mind owning the company at the strike of my put I let theta decay keep working for me.

To me that’s the beauty of being an options trader: we can use theta decay to our advantage. Theta decay, for those who aren't familiar, is the rate at which an option's price decreases over time. Even when we're away from our trading desk, we can still set up trades that benefit from this natural phenomenon. That's passive income at its finest… And that’s the advantage options have over day trading (just my opinion).

However, I do lighten up on some trades that might require more adjustments throughout the week, like put calendars. Depending on how profitable they are already, I might close these trades before heading off for my break.

You have to find a style that works for you, and although none of this is financial advice, I’m just some random guy who trades the market for a living, I encourage you to at least consider leaving some trades on while you are on vacation because the bills don’t stop just because you aren’t trading! You can still have your trades working for you, as long as you have the right risk management strategies in place.

BUT at the same time the market will always be there when you get back! It’s those precious moments of relaxation and enjoyment won't. So, go ahead, take that break you've been longing for. Your portfolio will be just fine if you create some simple guidelines that you create and are comfortable following!

So pack those bags, hit the road, enjoy your fiends and family, but I think you should keep trading Good Kids! Trading in a community of likeminded people is far more fun, educational, and profitable! Join our discord today:

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