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I agree. But sometimes, it is better to wait a couple days for a 4% ROI than to quickly replace it with a 1.5-2% ROI.
As I said, I only recently (the past 30-45 days) got comfortable with a fully invested account. I'm now beginning the next level of account management where more active trading is involved.
It's cognitive dissonance when you lose. See "The Human Condition" by God, Pacha Mama or Zeus.
It's knowing when to break your rules when you win. See "Market Wizards" by Schwager.
It's luck. See "Fooled by Randomness" by Taleb.
The image below is cash Henry Hub NG from expiration week in 2003. This is what kept me out of selling "sure thing" calls with well over 100% IV and just a few days to expiration in 2014. I'm probably not the only one who kept pulling up this chart to see how bad things could get.
You start with a ROI of 2% -- for example, you put up $1000 margin to well a short option for $20
Then, a few weeks later, the margin requirement drops to $300 and you can buy your short option back for $5. So, now your ROI is $15/$300 = 5%
Yes. Found that ROI was greater if you exited early. Depends on if futures are going your way.
My spreadsheet calculates the beginning ROI and the ROI if I exited today. If futures aren't moving against you, you can sometimes make double the ROI by exiting early vs riding to expiration.