Gamma’s House
- Thread starter BeautifulStranger
- Start date
My trading personality does not do well with negative gamma trades. Have considered doing gamma scalping using near expiration long straddles, however.
I am trying to put together multiple edges from several different trading methodologies in order to maximize returns, minimize risk, and increase consistency. The following is a list of areas that include objectives, strategies, and core methods I am incorporating into my trading plan:
1. Generate alpha - Fundamental analysis - Indentify underlyings that are likely to have increasing institutional interest.
2. Swing trade timing - Technical analysis - Minimize major swing trends against my directional outlook.
3. Intraday trade management - Scalping - Take advantage of frequent short term edges while managing core position.
4. Maximizing reward to risk - Options spreads - Defined risk with potential greater return of capital.
5. Minimize transaction costs - Order placement - Optimize executions in different market conditions.
6. Robust system that addresses variable personal participation - Automation and dynamic hedging - Maintain my ability to participate in the markets in a substantial way while away from my platform or enhance returns when I can actively participate.
qlai, thank you for your questions and please keep them coming. Your questions stimulate my thoughts and each iteration of ideas helps improve my trading system.
Account down .08% on overnight loss of my lottery trade and breakeven scalping.
ES gapped up, causing my DOTM put fly to lose value. Based on post trade spreads, it appeared I could have saved .15 points by putting in a tighter order. Is it worth saving $7.50 “Working” an order? For a few seconds, it is. As it was, there was no momentum related urgency at the time. I am now flat.
I totally misguaged the RTH opening of ES. I had the idea of a gap and fill, but ES gapped and ran. I zigged when I should have zagged all day with single names. I was not clear on whether I was scalping or day trading. I was reactive instead of anticipatory, probably due to my bad habit of trying to multitask. My greatest mistake was missing a “Dip and rip” opportunity in JPM even though I noted JPM was unusally active in premarket. Further, I failed to note the consolidation below today’s open that preceeded an extended one way move. I track lots of things and must make sure I do enough pre-RTH preparation.
Overall feeling very confident. As many mistakes I made and adverse moves that went against me today, being down the equivalent of a good lunch portends big trading days ahead.
ES gapped up, causing my DOTM put fly to lose value. Based on post trade spreads, it appeared I could have saved .15 points by putting in a tighter order. Is it worth saving $7.50 “Working” an order? For a few seconds, it is. As it was, there was no momentum related urgency at the time. I am now flat.
I totally misguaged the RTH opening of ES. I had the idea of a gap and fill, but ES gapped and ran. I zigged when I should have zagged all day with single names. I was not clear on whether I was scalping or day trading. I was reactive instead of anticipatory, probably due to my bad habit of trying to multitask. My greatest mistake was missing a “Dip and rip” opportunity in JPM even though I noted JPM was unusally active in premarket. Further, I failed to note the consolidation below today’s open that preceeded an extended one way move. I track lots of things and must make sure I do enough pre-RTH preparation.
Overall feeling very confident. As many mistakes I made and adverse moves that went against me today, being down the equivalent of a good lunch portends big trading days ahead.
Account value up .97% on positive scalps and open profit on ES put butterfly. My utilization was capital was 75%.
Fairly inefficient trading day for me. Missed multiple opportunities with trade identification and trade management. I have a often futile tendency to expect a big move every time I enter a trade, costing me significant scalping profits. The key is to allocate half of my position for a quick scalp and the other half for a larger scalp or day trade. I was on the right side of the market, although my single name trades didn’t always cooperate. Have been using money management well. Unfortunately, I am leaving a majority of potential profits on the table.
As far as trade identification, a saying comes to mind: “If at first you don’t succeed, try, try, again”. I indentified JPM and CAT as having good potential, but missed the bulk of the move in JPM later in the session and never traded CAT because of a weak Credit market and my concerns of a stronger US dollar. I thought about shorting silver, but never got around to it. On short term trades, I need to clear my head of biases and trade what is immediately going on in front of me.
Given my continued success in avoiding large negative intraday equity swings, I will now use some of my daytrading margin to about 100% equity.
Fairly inefficient trading day for me. Missed multiple opportunities with trade identification and trade management. I have a often futile tendency to expect a big move every time I enter a trade, costing me significant scalping profits. The key is to allocate half of my position for a quick scalp and the other half for a larger scalp or day trade. I was on the right side of the market, although my single name trades didn’t always cooperate. Have been using money management well. Unfortunately, I am leaving a majority of potential profits on the table.
As far as trade identification, a saying comes to mind: “If at first you don’t succeed, try, try, again”. I indentified JPM and CAT as having good potential, but missed the bulk of the move in JPM later in the session and never traded CAT because of a weak Credit market and my concerns of a stronger US dollar. I thought about shorting silver, but never got around to it. On short term trades, I need to clear my head of biases and trade what is immediately going on in front of me.
Given my continued success in avoiding large negative intraday equity swings, I will now use some of my daytrading margin to about 100% equity.
Account value down .53% on adverse reversal in overnight position and negative scalps.
I did’t listen to what the market was trying to tell me and paid the price. I recognized ES was at a level often associated with reversals but did not act. I watched ES complete a countertrend expansion bar but did nothing. I saw ES test a level I associate with a longer term trend change but remained complacent. Finally, after ES consolodated below this key level, I finally closed my position. However, I never went long as per my signals. It comes down to the blinding power of bias. Bias in the face of a bullish reversal of the stimulus package and my thought the after hours markets would recover.
I identified TAN as a long opportunity, but was not paying attention early during RTH and missed a good trade.
I generate lots of good ideas, but I don’t get paid for them unless the market moves accordingly. Therefore, market action is of greater value than my ideas. The sooner I trade according to market action, the sooner my trading becomes consistent.
Going to be a little more dynamic with my butterfly strike selections based on how I want the greeks to look like while considering normal and extended market move scenarios.
Based on market action today, I am technically bullish and will be looking at swing option trades using butterflys on single names.
I did’t listen to what the market was trying to tell me and paid the price. I recognized ES was at a level often associated with reversals but did not act. I watched ES complete a countertrend expansion bar but did nothing. I saw ES test a level I associate with a longer term trend change but remained complacent. Finally, after ES consolodated below this key level, I finally closed my position. However, I never went long as per my signals. It comes down to the blinding power of bias. Bias in the face of a bullish reversal of the stimulus package and my thought the after hours markets would recover.
I identified TAN as a long opportunity, but was not paying attention early during RTH and missed a good trade.
I generate lots of good ideas, but I don’t get paid for them unless the market moves accordingly. Therefore, market action is of greater value than my ideas. The sooner I trade according to market action, the sooner my trading becomes consistent.
Going to be a little more dynamic with my butterfly strike selections based on how I want the greeks to look like while considering normal and extended market move scenarios.
Based on market action today, I am technically bullish and will be looking at swing option trades using butterflys on single names.
Account value down .03%.
Lost on a silver trade that I could no longer watch. Had originally planned to hold the position through the European session based on monetary concerns and increased risk appetite. Thought about leaving a stop on the position, but was not happy with its relative strength. As it turned out, I would have been stopped anyway before silver finally had a decent, although underwhelming rally during the European session.
I have a bearish ES put fly on again near today’s RTH high on ideas the market has rallied sharply off recent lows and is into a formidable resistance area on the daily. Today was an narrow range day and reminded me of a similar situation in July where ES required a few days to break resistance. Only this time, NQ has weaker relative strength and ES has rallied further off it’s recent lows. While I have high confidence in my short term bearish outlook on ES, I will dynamically hedge my position and will add on additional bearish ES put ‘flys as conditions warrent.
I’m now looking through a risk aversion and economic weakness lens versus monetary concerns and stimulus hopes.
I will be incorporating short ATM Iron butterflys and Iron Condors in the future, starting on indexes, especially if we get an increase in volatility and after an time threshold is reached.
Lost on a silver trade that I could no longer watch. Had originally planned to hold the position through the European session based on monetary concerns and increased risk appetite. Thought about leaving a stop on the position, but was not happy with its relative strength. As it turned out, I would have been stopped anyway before silver finally had a decent, although underwhelming rally during the European session.
I have a bearish ES put fly on again near today’s RTH high on ideas the market has rallied sharply off recent lows and is into a formidable resistance area on the daily. Today was an narrow range day and reminded me of a similar situation in July where ES required a few days to break resistance. Only this time, NQ has weaker relative strength and ES has rallied further off it’s recent lows. While I have high confidence in my short term bearish outlook on ES, I will dynamically hedge my position and will add on additional bearish ES put ‘flys as conditions warrent.
I’m now looking through a risk aversion and economic weakness lens versus monetary concerns and stimulus hopes.
I will be incorporating short ATM Iron butterflys and Iron Condors in the future, starting on indexes, especially if we get an increase in volatility and after an time threshold is reached.
Yes, I’ll post monthly screenshots of Interactive Broker’s Portfolio Analysis with metrics compared to SP500.
Will do. Will also put in hedge information.