A) I doubt he has a plan "B", he seems a shoot-from-the-hip-guy, an improv president who is failing miserably on all fronts.
B) See A to see the lack of a B) )
Time for warm-baked bread...
Dunning Kruger Journal
- Thread starter maximumpossiblesuffering
- Start date
A) I doubt he has a plan "B", he seems a shoot-from-the-hip-guy, an improv president who is failing miserably on all fronts.
B) See A to see the lack of a B) )
Time for warm-baked bread...
What a concept: a politician and business leader having a backup plan for when a not unlikely outcome happens. If or when the spit really hits the fan, Trump is going to need the focus and expertise of the smartest people in the room in order to salvage some remnants of our economic and financial system. It would be nice if a hard crash could be avoided, but I guess not enough people in positions of power have ever felt real pain.
After going over my trading results, my intermittment displine issues, and doing some backtesting, I believe I am getter closer to reaching my trading unification goal. A common denominator to the various time frames I use is the waxing and waning of bar ranges. More often than not, a wide range bar will be followed by smaller, consolodating bars. Smaller consolidating bars are often followed by a range expansion usually in the direction of the previous trend. A “narrow range bar” or “wide range bar” signal seems to happen between every 8 and 10 bars in many time frames.
Based on the above and my desire to incorporate option strategies, my trading plan will be modified as follows:
1) No more naked positions. Basically, my stop will be built in to my trades as I enter them. I will also use a time stop as appropiate for the trade reason.
2) For overnight trades after range expansion, I will sell vertical option spreads that fade the expansion bar.
3) For overnight trades after consolidative action, I will buy options in anticipation of range expansion in direction of the underlying trend, assuming reasonable implied volatility.
4) On option expiration days, I will sell a straddle and manage it according to the principles above, except where directional exposure reaches .60 delta. A .60 delta directional exposure would require immediate management.
5) Backtesting indicates the above should be a successful trading strategy. Structurally, the concept of being a contrarian after a big move or when interest is momentariliy lost in an instrument seems sound.
6) By simplifying my trading system, over than a few volatility skew or term structure trades, I should be able to maintain better focus and more effectively learn its nuances.
From a reversion to mean standpoint, the recent decline in crude oil and ES has been very impressive. ES has a huge monthly wide range bar and, of course, high volatility. A four to six week iron condor seems like it would have high profit potential. It is a scary trade right now, but the pay for taking the risk seems good right now.
Based on the above and my desire to incorporate option strategies, my trading plan will be modified as follows:
1) No more naked positions. Basically, my stop will be built in to my trades as I enter them. I will also use a time stop as appropiate for the trade reason.
2) For overnight trades after range expansion, I will sell vertical option spreads that fade the expansion bar.
3) For overnight trades after consolidative action, I will buy options in anticipation of range expansion in direction of the underlying trend, assuming reasonable implied volatility.
4) On option expiration days, I will sell a straddle and manage it according to the principles above, except where directional exposure reaches .60 delta. A .60 delta directional exposure would require immediate management.
5) Backtesting indicates the above should be a successful trading strategy. Structurally, the concept of being a contrarian after a big move or when interest is momentariliy lost in an instrument seems sound.
6) By simplifying my trading system, over than a few volatility skew or term structure trades, I should be able to maintain better focus and more effectively learn its nuances.
From a reversion to mean standpoint, the recent decline in crude oil and ES has been very impressive. ES has a huge monthly wide range bar and, of course, high volatility. A four to six week iron condor seems like it would have high profit potential. It is a scary trade right now, but the pay for taking the risk seems good right now.
Planning to get a Texas Real Estate Salesperson and Mortgage Loan Originator License in order to take advantage of the active and broad commercial real estate market here. Commercial real estate transaction and statistics providers such as CoreLogic, CoStar, and LoopNet will help me gain a broader sense of how investors and lenders view risk. In addition, I may get an early heads up on liquidity issues, changes in lending policy, or investment preferences. I will be exploring relationships between capitialization rates, lending rates, and cash on cash returns with commercial investment returns and money flows. This information may be also useful for longer term trading decisions in equities, especially instruments that are real estate related. Eventually I plan to get my series 7 and other related securities licenses.
I don’t have a strong opinion on equities right now. Trade agreemenr or not, budget agreement or not, I still feel volatility will be heading lower within a trading ramge. There may be buying opportunities in certain stocks that have been oversold by instituions in 2018, starting in the new year. X, F, GE, FDX, select hotels, airlines, and other travel related consumer descretionariies may provide above average returns to those who can either handle a hefty amount of risk or who can skillfully hedge some of their risk with option or spread strategies.
I am going to base my trading on a 2400 to 2600 range in ES for January. A solid trade agreement and budget deal may cause a bit of an overshoot to my projections due to heavy short covering, but if we did, I would expect prices to return to my extimated range. I plan to buy butterflies, sell iron condors, and buy intraday ratio spreads. Barclays is expected to replace maturing VXX and VXZ with VXXB and VXZB this January. I plan to be particularly responsive to sell signals in VXX in line with my decreasing volatility expectations.
I don’t have a strong opinion on equities right now. Trade agreemenr or not, budget agreement or not, I still feel volatility will be heading lower within a trading ramge. There may be buying opportunities in certain stocks that have been oversold by instituions in 2018, starting in the new year. X, F, GE, FDX, select hotels, airlines, and other travel related consumer descretionariies may provide above average returns to those who can either handle a hefty amount of risk or who can skillfully hedge some of their risk with option or spread strategies.
I am going to base my trading on a 2400 to 2600 range in ES for January. A solid trade agreement and budget deal may cause a bit of an overshoot to my projections due to heavy short covering, but if we did, I would expect prices to return to my extimated range. I plan to buy butterflies, sell iron condors, and buy intraday ratio spreads. Barclays is expected to replace maturing VXX and VXZ with VXXB and VXZB this January. I plan to be particularly responsive to sell signals in VXX in line with my decreasing volatility expectations.
Attached below is my account performance since inception. I have gotten awfully correlated to the broad market in the last few months. Not a good time to be correlated. My low risk allowance has kept my account from taking large hits. My risk allowance has increased from .18% to its current .72% per trade over the last six months. My trading activity has also increased significantly. I expect bigger swings in my account performance going forward. Should I cut down on discipline issues and other basic mistakes, I see myself outperforming the general market by a wide margin, regardless of its direction in 2019.
My first trade of the new year was long aususd on a correlated money flow idea. After Chinese Industrial Production and Purchasing Managers Index was released audusd sold off hard and I took a 16 pip loss.
I bought a ES calender spread as a short term soft hedge for a longer term short strangle to be entered later. Now long 2 ES January 7, 2019 2400 puts / Short 2 ES January 4, 2019 2400 puts at an averaged debit of 2.125.
I sold a ES strangle after the equities futures sold off. Now short 1 ES Feburary 15, 2019 2530 call / Short 1 ES Feburary 15, 2019 2400 put for a credit of 107.25. This position, not including the soft hedge above, had an initial delta of -.09. I structured this trade to be better able to stand a modest test to the downside. My calendar spread currently has a delta of -.07 with little gamma. I am currently unhedged to the upside. Should 2530 start getting tested, I will manage my unwanted deltas by using one of several methods such as going long an appropiate amount of SPY, short VXX, or going long a positive delta, short term ES ratio spread for a debit according to time of day, recent price action, and money flows.
I will be exploring several relationships between market metrics and option metrics. For example, I will be measuring theta decay versus average daily range in order derive a “Free delta” value to be considered in conjunction with my intraday trading plan.
Bought a ES call calendar spread. Now long 1 ES January 7, 2019 2530 call / Short 1 ES January 4, 2019 2530 call for a debit of $3.75. This is a soft hedge for my short ES straddle. Don’t really love out of the money call calendar spreads on index futures because lower volatility normally accompanies price rises here, making the profit zone or hedge value less.
My first trade of the new year was long aususd on a correlated money flow idea. After Chinese Industrial Production and Purchasing Managers Index was released audusd sold off hard and I took a 16 pip loss.
I bought a ES calender spread as a short term soft hedge for a longer term short strangle to be entered later. Now long 2 ES January 7, 2019 2400 puts / Short 2 ES January 4, 2019 2400 puts at an averaged debit of 2.125.
I sold a ES strangle after the equities futures sold off. Now short 1 ES Feburary 15, 2019 2530 call / Short 1 ES Feburary 15, 2019 2400 put for a credit of 107.25. This position, not including the soft hedge above, had an initial delta of -.09. I structured this trade to be better able to stand a modest test to the downside. My calendar spread currently has a delta of -.07 with little gamma. I am currently unhedged to the upside. Should 2530 start getting tested, I will manage my unwanted deltas by using one of several methods such as going long an appropiate amount of SPY, short VXX, or going long a positive delta, short term ES ratio spread for a debit according to time of day, recent price action, and money flows.
I will be exploring several relationships between market metrics and option metrics. For example, I will be measuring theta decay versus average daily range in order derive a “Free delta” value to be considered in conjunction with my intraday trading plan.
Bought a ES call calendar spread. Now long 1 ES January 7, 2019 2530 call / Short 1 ES January 4, 2019 2530 call for a debit of $3.75. This is a soft hedge for my short ES straddle. Don’t really love out of the money call calendar spreads on index futures because lower volatility normally accompanies price rises here, making the profit zone or hedge value less.
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Looking at AUDUSD getting crushed today after a long term down trend on the daily chart and USDJPY having a very large range expansion to the upside. Although I am fading both as a scalp, my concern these moves are a sign of near panic and may be indications of illiquidity. I now believe chances of an equity market panic are high. Perhaps starting as soon this week if major positive news is not forthcoming.
I shall be more agressive in taking sell signals.
I shall be more agressive in taking sell signals.
Netted out a modest profit this week. My ES strangle, long USDJPY, long ES put calendar spread, and long NG were contributors. My short ZB, where I let myself get wiggled out at only 1/3 of my risk allowance and some unprofitable scalps were drags. If I had the stones to hold my short ZB trade through Friday, my account would not be at all time highs.
Even more concerning was my failure to establish a long ES position at the 2458 to 2460 level Thursday evening. The new US Congress was sworn in and money flows as indicated by correlated assets seemed very favorable. I was contemplating initiating an unusually large position in ES options of about $1200 to reflect my high confidence. As it turned out, several ES call options for Friday expiration appreciated over 1200%. Even a relatively conservative bull spread would have returned a triple. Why did I do nothing? What is it about my state of mind or even underlying psychology that prevented me from pulling the trigger? As I mentioned in this journal many weeks ago, I said I was going to talk about trading psychology. Well, here it is.
So why did I not pull the trigger on a high confidence trade? Was I distracted my by small and disappointing loss in ZB? Do I feel deep inside I don’t deserve to be successful? That I am unworthy? Or am I really more interested in being right rather than making money? I had actually wriiten a multiple paragraph post for this journal outlining my expectations and reasoning for my short term bullish outlook in ES. I never posted it because I did not want to make another call that I did not take good advantage off. I have many if not all of the psycological and emotional issues previously mentioned that are holding back my trading results.
How should I go about overcoming these known weaknesses. This sort of thing probably does not lend well to DIY. Professional help? Of course that should be on the table. Perhaps also appropiate would be for me to slap myself in the face, pump myself up, and remind myself I am an adult as implied by my age. I need to remind myself of the big picture, my goals, and those who would benefit from my success as a trader. In short, I need to get my “spit” together.
My profiability levels on calendar spreads and hedged short straddles is near 90%. Most of these trades only experienced 1 tick worth of heat. My few losses have been small. I will now look at creating ladders of these trade types with soft hedges on my straddles and strangles matching my expected holding time. For example, On a short straddle with soft hedging, I will use either a calendar spread or a ratio spread to expand my breakeven points. Delta management will still be necessary, especially If a large move happens early in the life of the position.
I believe equity markets will remain in a trading range, with impressive one day spikes in either direction due to upcoming major positive and negative news events. Therfore, intraday trading conditions should be favorable as well as longer term, say 6 to 8 weeks, for lower gamma straddles and strangles.
Even more concerning was my failure to establish a long ES position at the 2458 to 2460 level Thursday evening. The new US Congress was sworn in and money flows as indicated by correlated assets seemed very favorable. I was contemplating initiating an unusually large position in ES options of about $1200 to reflect my high confidence. As it turned out, several ES call options for Friday expiration appreciated over 1200%. Even a relatively conservative bull spread would have returned a triple. Why did I do nothing? What is it about my state of mind or even underlying psychology that prevented me from pulling the trigger? As I mentioned in this journal many weeks ago, I said I was going to talk about trading psychology. Well, here it is.
So why did I not pull the trigger on a high confidence trade? Was I distracted my by small and disappointing loss in ZB? Do I feel deep inside I don’t deserve to be successful? That I am unworthy? Or am I really more interested in being right rather than making money? I had actually wriiten a multiple paragraph post for this journal outlining my expectations and reasoning for my short term bullish outlook in ES. I never posted it because I did not want to make another call that I did not take good advantage off. I have many if not all of the psycological and emotional issues previously mentioned that are holding back my trading results.
How should I go about overcoming these known weaknesses. This sort of thing probably does not lend well to DIY. Professional help? Of course that should be on the table. Perhaps also appropiate would be for me to slap myself in the face, pump myself up, and remind myself I am an adult as implied by my age. I need to remind myself of the big picture, my goals, and those who would benefit from my success as a trader. In short, I need to get my “spit” together.
My profiability levels on calendar spreads and hedged short straddles is near 90%. Most of these trades only experienced 1 tick worth of heat. My few losses have been small. I will now look at creating ladders of these trade types with soft hedges on my straddles and strangles matching my expected holding time. For example, On a short straddle with soft hedging, I will use either a calendar spread or a ratio spread to expand my breakeven points. Delta management will still be necessary, especially If a large move happens early in the life of the position.
I believe equity markets will remain in a trading range, with impressive one day spikes in either direction due to upcoming major positive and negative news events. Therfore, intraday trading conditions should be favorable as well as longer term, say 6 to 8 weeks, for lower gamma straddles and strangles.
Based on my consistent and profitable trading results with certain types of option trades, I will now focus exclusively on these trade types. In addition, I will adjust my trading plan accordingly. Therefore, my new risk allowance will be increased to .86% of account size per trade. Correlated positions may have an a total exposure of 1.72%. Option only spreads or trades designated as "high confidence" allow double these risk management values. Furthermore, should my account become profitable, a risk allowance of 3.7% of net profits will be allowed or my base rate, whichever is greater. No undefined risk strategies will be allowed. Undefined risk is any situation that could expose my account to a loss greater than my risk allowance.
Let the pain begin! Let the suffering begin! Maximum possible suffering!
Let the pain begin! Let the suffering begin! Maximum possible suffering!
Happiness is when current price is in middle of double calendar spread with one day to go.
This is on ES. Will start to focus on single names. Also will be looking to use calendar spreads to take advantage of volatility ramp up as single name earnings reports approaches.
This is on ES. Will start to focus on single names. Also will be looking to use calendar spreads to take advantage of volatility ramp up as single name earnings reports approaches.