3-6% ROI options trading system

[xilb51x]

LOL, i know what is the risk/reward ratio vs probability to win/loss in trading system (I been in this business for more than 10 years and still profitable and survive), the sad thing is I know this much better than 99% of ET here and I can spot the flaw in OP system almost instantly.

If you read the OP thread carefully, you will know he long a call at $5.65 and try to make something like $0.25 (before commission), and he doesn't have any solid exit plan when the price go against him. I took this as he will pray when the price go against him, and there is a chance (may be 5% to 10%?) that his option may go to zero if the price never recover. This means his loss will be at least 20X than his profit (at least in this example)

OP is new and he though he has a novel idea with edge, the only things he never know is someone already tried this before (scalping the noise using options in high volatile stocks such as AAPL, TSLA, GOOG), and the result is not good due to the occasion big drawdown. This "someone" end up as a "mentor" that selling books and signals in internet as he can't make real money in trading

thanks for the input do you have a link to the work using the "scalping the noise using options in high volatile stocks such as AAPL, TSLA, GOOG" or have the "someones" name?

and you did say occasional big drawdown...so what type of exit strategy would you implement to avoid or minimize this?

 

[xilb51x]

no trades today. the setup happened but wasn't till later in the day and I wasn't around to see it. but when the setup did occur there would have been a 1.72 point difference hi/low.. 1.32 points if you got in on candle close

 

[xilb51x]

10-13 trades. 6% ROI

 

[drcha]

Why don't you use a synthetic or a near-month, very DITM option? Maybe I don't understand what you want.

 

[xilb51x]

10-14 trades

 

[i960]

Just trade the underlying.

 

[xilb51x]

10-15

sold lots at 3%, 6%, 9% and a 9.5% ROI
3% lot got eaten up by fees oops..

11,259.12 cost
591.68 net gain

 

[prc117f]

Wow a measly 3-6% return per day. LOL hey these guys offer 2.2% a day.

 

[xilb51x]

10-16-15

got in and out 3 times. one on the first and the second one got in a bit early and added more puts at the lower price. the final one I saw was a true turning point Using bigger charts and got a 40% ROI

first lot was 6% ROI

middle lot was
-10% ROI
-19% ROI
-33% ROI
it appeared to be the top then then candle took off so I added to the position to lower the cost basis.

last lot was a 40% ROI (waited a bit as I used the 13 min chart to determine a true change of direction)

 

[xilb51x]

no trades today, setup did not appear at all.