I understand the benefits of making the effort to optimize my trading rather than knowing how to do that mathematically. Thanks for the heads up on Ralph Vince. Another for the ever expanding to do list!
Alpha Wolf
- Thread starter BeautifulStranger
- Start date
I understand the benefits of making the effort to optimize my trading rather than knowing how to do that mathematically. Thanks for the heads up on Ralph Vince. Another for the ever expanding to do list!
Terrible trading this week, although I did squeak out a profit. I closed my CL spread because the trade was not performing to my expectations. I mechanically bought MJY on a RTM setup, only to see the market move one direction against me, ultimately costing me more in pips than my target profit, a rules violation. I went wrong when I discounted the then deteriorating (With plenty of room to deteriorate) macro environment and the particularly negative economic report out of Japan. There are still some instruments where economic reports can have an impact on price!
My long ES call buy was ok and my hedges were justifiable to keep my risk exposure in check. However, I left wanting because I was quite bullish, but could not watch the market. An options spread probably would have been the best play.
MXP was intended to be an RTM play, although it actually did not meet criteria yet when I put the trade on. Will I ever tire of losing money by fading in-play out-performers? Will I ever tire of losing money by not following the ruleset of my setups?
EUR and SLV were “Gimmies”, as both equities and credit markets were up strongly today. Really, I had good reason to load up on these for a day trade as well as keeping some for next week for a likely continuation run.
For next quarter, I will start incrementally increasing the utilization of this account by entering select sector and industry ETFs when I get RTM buy signals and exiting when I get RTM sell signals, except retaining a small remainder that represents the profits if any, either in shares or synthetic, as can be attributed to the position. Over time, I will reach full investment without any particular time period having undue influence on my returns. As my exposure of long term holdings increases, I may place short term hedges using a day or swing trading methodology. Additionally, I may expand my holding into single names, depending upon account performance.
My long ES call buy was ok and my hedges were justifiable to keep my risk exposure in check. However, I left wanting because I was quite bullish, but could not watch the market. An options spread probably would have been the best play.
MXP was intended to be an RTM play, although it actually did not meet criteria yet when I put the trade on. Will I ever tire of losing money by fading in-play out-performers? Will I ever tire of losing money by not following the ruleset of my setups?
EUR and SLV were “Gimmies”, as both equities and credit markets were up strongly today. Really, I had good reason to load up on these for a day trade as well as keeping some for next week for a likely continuation run.
For next quarter, I will start incrementally increasing the utilization of this account by entering select sector and industry ETFs when I get RTM buy signals and exiting when I get RTM sell signals, except retaining a small remainder that represents the profits if any, either in shares or synthetic, as can be attributed to the position. Over time, I will reach full investment without any particular time period having undue influence on my returns. As my exposure of long term holdings increases, I may place short term hedges using a day or swing trading methodology. Additionally, I may expand my holding into single names, depending upon account performance.
youtu.be/GpBFOJ3R0M4?list=RDGpBFOJ3R0M4&t=13 Error Log notepad. Date,Time,Product,Error,
0331,0537,mj,rrv (Risk Reward Violation costing me more in pips than my target profit)
0331,0318,mxp,mut (Made up Trade, did not meet criteria)
Update your list the instant you Know you done wrong. After some time pick error you like least. Eventually the list will dwindle. or what were once vices are now habits.
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Trading discipline and focus problems remain. Lost three times my established stop level, even ignoring a high confidence signal to exit when the loss was $100.
Without discipline, I am nothing. Whether it is trading or most anything else in life for that natter. As such, I must go all-in to mitigate this critical character defect.
Not only did I lose a large amount of money relative to my average profits, but I missed out on other signals that were particularly profitable, as I decided to suspend trading for the rest of the week. At least I was disciplined enough to do that. On Tuesday morning, I had my expectations for ES mapped out for that Tuesday, Wednesday, and Thursday. I had no opinion on Friday’s action until late Thursday. All of my expectations hit, including a couple of other ideas, suggesting I actually have some competence in trading. But without discipline, what is the point in having a trading plan that is not followed?
I read quite of few posts on ET expressing concerns for inflation. While our inflation rate is increasing, I don’t see it going hyper. One of the reasons is related to my expectations of relatively stable energy prices due to increased supply of alternative energy and another is related to the ability and willingness of people forgo or share things that have high relative cost. A certain component of homelessness, ride sharing or primary use of basic forms of transportation, many self employed forgoing health insurance or care, and even disintermediation, as in “Do it yourselfers” is increasing. So based on the preceding, inflation at previous and current rates could be considered a problem that is a drag on the economy and quality of life for some people, market adjustments should still keep inflation relatively tame versus the expectations of some.
A bigger concern right now is pervasive ethics issues involving a wide range of businesses. Pricing schemes that are effectively a restraint of trade, outright fraud, and service failures have negative implications long term for our culture and economy. As people get tired of getting ripped off, they will look for alternatives, such as doing things themselves or forgoing others. On a large scale, this will reduce economic activity, cause jobs losses, reduce consumer spending, and possibly result in a negative feedback loop. Perhaps the pandemic has put many businesses into “Survival mode”, making it seem necessary to throw ethics and long term customer satisfaction aside for maximizing short term opportunities. I don’t believe a regulation spree is the answer, although certain remedies against malfeasance should probably be increased. I’m thinking increased evidence of government commitment to keeping our economy open in spite of how Covid continues to evolve, unless the case fatality rate soars, of course, would help provide necessary business confidence and hopefully ethical conduct for better long term economic prospects.
Focusing issues:
Without discipline, I am nothing. Whether it is trading or most anything else in life for that natter. As such, I must go all-in to mitigate this critical character defect.
Not only did I lose a large amount of money relative to my average profits, but I missed out on other signals that were particularly profitable, as I decided to suspend trading for the rest of the week. At least I was disciplined enough to do that. On Tuesday morning, I had my expectations for ES mapped out for that Tuesday, Wednesday, and Thursday. I had no opinion on Friday’s action until late Thursday. All of my expectations hit, including a couple of other ideas, suggesting I actually have some competence in trading. But without discipline, what is the point in having a trading plan that is not followed?
I read quite of few posts on ET expressing concerns for inflation. While our inflation rate is increasing, I don’t see it going hyper. One of the reasons is related to my expectations of relatively stable energy prices due to increased supply of alternative energy and another is related to the ability and willingness of people forgo or share things that have high relative cost. A certain component of homelessness, ride sharing or primary use of basic forms of transportation, many self employed forgoing health insurance or care, and even disintermediation, as in “Do it yourselfers” is increasing. So based on the preceding, inflation at previous and current rates could be considered a problem that is a drag on the economy and quality of life for some people, market adjustments should still keep inflation relatively tame versus the expectations of some.
A bigger concern right now is pervasive ethics issues involving a wide range of businesses. Pricing schemes that are effectively a restraint of trade, outright fraud, and service failures have negative implications long term for our culture and economy. As people get tired of getting ripped off, they will look for alternatives, such as doing things themselves or forgoing others. On a large scale, this will reduce economic activity, cause jobs losses, reduce consumer spending, and possibly result in a negative feedback loop. Perhaps the pandemic has put many businesses into “Survival mode”, making it seem necessary to throw ethics and long term customer satisfaction aside for maximizing short term opportunities. I don’t believe a regulation spree is the answer, although certain remedies against malfeasance should probably be increased. I’m thinking increased evidence of government commitment to keeping our economy open in spite of how Covid continues to evolve, unless the case fatality rate soars, of course, would help provide necessary business confidence and hopefully ethical conduct for better long term economic prospects.
Focusing issues:
Relax, you'll be fine.
Start your error log. Keep it current. No big deal. You can knock this off by end of month.
https://elitetrader.com/et/threads/alpha-wolf.354044/page-8#post-5356880
youtu.be/R9eQkTJZlNk?t=130
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Finally getting a day off of work, 34 hours to be exact. Been overlaying payoff diagrams of various options strategies on charts with wide Keltner Channels and am amazed how far the underlying must move to cause a Iron Condor or Butterfly with a body near the underlying price and wings around .05 delta to not be profitable. Interestingly, the point at which an IC or ‘Fly becomes negative theta is often close to generating a high probability reversion to mean setup. I need to ponder the trade management implications of this seemingly significant observation. Nothing that a little backtesting wouldn’t confirm. I always thought that IV’s and payoffs were integral, along with perhaps, a variable risk premium depending on underlying conditions. What I think I’m seeing are barn door wide opportunities in single names right now.
For tomorrow, I’m planning to throw a bunch of trades on the wall to see what happens. There are plenty of reversion to mean, trend continuation, and reversal setups right now. I’ll try to set up this “Test portfolio” up to be overall market neutral with expirations on April 23rd. Setup type, expectations, and stop levels will be recorded here.
While I’ll return to work tomorrow evening, 1500ish Eastern Time each day will be reserved for trade management. Profitability of these trades are not the primary goal of this exercise. Rather, it is the practice of putting these trades on, monitoring them as best I can, and learning how various option strategies move with their underlying. To that purpose, I will take screenshots of my portfolio when I can for detailed analysis later. I wish IB had greeks information condensed for each position so a single screenshot would capture most of the pertinent information. I suppose a spreadsheet could work for this purpose.
For tomorrow, I’m planning to throw a bunch of trades on the wall to see what happens. There are plenty of reversion to mean, trend continuation, and reversal setups right now. I’ll try to set up this “Test portfolio” up to be overall market neutral with expirations on April 23rd. Setup type, expectations, and stop levels will be recorded here.
While I’ll return to work tomorrow evening, 1500ish Eastern Time each day will be reserved for trade management. Profitability of these trades are not the primary goal of this exercise. Rather, it is the practice of putting these trades on, monitoring them as best I can, and learning how various option strategies move with their underlying. To that purpose, I will take screenshots of my portfolio when I can for detailed analysis later. I wish IB had greeks information condensed for each position so a single screenshot would capture most of the pertinent information. I suppose a spreadsheet could work for this purpose.
Do you contort your own ketler channels? Or just use the standard two ATR measure? Vol bands are useful visually.
Are you talking about putting on ATM flies and buying the wings at the volatility band?
I’m structuring a different method. Instead, I’ll look for stocks that have been selling off (rare in this market, I know) but there’s been some decent corrections in the SPX, thus a lot of single-names bounced (selling climax) back from “oversold” conditions.. and rather “crash up” like. Of course one could just buy OTM calls or call verticals. But most of the time the measured move upward is to a level previously accepted (mean). Structure the fly OTM, selling the body at the measured move strike, buy wings that fit your R:R and capital req style and spray.
when the market, and thus stocks, are selling off, we know volare is auto correlated to spot, so vols will be pumped up. Pumped up premium will cheapen flies across the vertical chain, giving us more opportunities for body placements.
Are you talking about putting on ATM flies and buying the wings at the volatility band?
I’m structuring a different method. Instead, I’ll look for stocks that have been selling off (rare in this market, I know) but there’s been some decent corrections in the SPX, thus a lot of single-names bounced (selling climax) back from “oversold” conditions.. and rather “crash up” like. Of course one could just buy OTM calls or call verticals. But most of the time the measured move upward is to a level previously accepted (mean). Structure the fly OTM, selling the body at the measured move strike, buy wings that fit your R:R and capital req style and spray.
when the market, and thus stocks, are selling off, we know volare is auto correlated to spot, so vols will be pumped up. Pumped up premium will cheapen flies across the vertical chain, giving us more opportunities for body placements.
My KC Vola bands are way wide, giving fewer potential signals, but identifying when the underlying may be experiencing extreme sentiment. I have used KC’s for target areas, with consideration given to S/R, among other things, and for RTM setups using an additional indicator as a delay/timing signal. Certain categories of underlyings tend to have different personalities as far as how extreme they tend to deviate for a given time frame from their central tendencies. My wide Keltner channels help me quickly identify an underlying’s personality or help quantify its recent trading history. So when I say it appears there are barn door wide opportunities out there, I am saying this from the perspective of using very wide Keltner Channels.
I am looking to do some “Shopping” this morning to build a portfolio of positions utilizing various option strategies and will provide color on my trades.
I stand corrected on TWS not showing greeks for each option positions. The desktop version shows them, the tablet version I have does not.
Due to unfavorable openings, Several setups I was anticipating to trade became less favorable, including a semi-core entry for XOP and RTM plays for UPS, LOW, and XLY. Although I had a shot with XLY, the bid-ask spread was wide, I was unable to get any price improvement on even a one lot, and I was not willing to pay the spread. When I see a setup I like in the premarket, I can simply hedge my desired delta, pending the open of the underlying’s option trading.
SLV is a semi-core long position meaning I will be more aggressive on long entries, less aggressive on exits, including stops, if any, on this small, risk adjusted position. Note the SLV trade is basically a partially hedged overwrite. I could have simply sold a put. I will probably start using SI futures options from now on for lower overall costs, but I want to see how this experimental position trades. The LE trade is randomish - Just looking to see how the Iron condor moves. The agricultural option markets are surprisingly accommodative to orders that split the bid/offer. I will look again at 1500 ET to see if there are any new setups.
I will incorporate basic economic and business principles in defining the categories of my longer term trading strategies: Core, semi-core, and trading range. Generally, futures based strategies will tend to be trading range based unless there are particularly compelling fundamental developments. Equities will tend to be accumulation based, but not always.
Due to unfavorable openings, Several setups I was anticipating to trade became less favorable, including a semi-core entry for XOP and RTM plays for UPS, LOW, and XLY. Although I had a shot with XLY, the bid-ask spread was wide, I was unable to get any price improvement on even a one lot, and I was not willing to pay the spread. When I see a setup I like in the premarket, I can simply hedge my desired delta, pending the open of the underlying’s option trading.
SLV is a semi-core long position meaning I will be more aggressive on long entries, less aggressive on exits, including stops, if any, on this small, risk adjusted position. Note the SLV trade is basically a partially hedged overwrite. I could have simply sold a put. I will probably start using SI futures options from now on for lower overall costs, but I want to see how this experimental position trades. The LE trade is randomish - Just looking to see how the Iron condor moves. The agricultural option markets are surprisingly accommodative to orders that split the bid/offer. I will look again at 1500 ET to see if there are any new setups.
I will incorporate basic economic and business principles in defining the categories of my longer term trading strategies: Core, semi-core, and trading range. Generally, futures based strategies will tend to be trading range based unless there are particularly compelling fundamental developments. Equities will tend to be accumulation based, but not always.