New to trading futures, how to hold positions longer without too much downside

[nooby_mcnoob]

I'm trying to figure out how to hold positions longer. I'm getting better at directional trading, which is fine but I have the usual problem of closing the position too early.

I'm experimenting with the following:

1. Get an index position, set a price target expectation
2. When price reaches expectation, sell covered call/put
3. If price is on the right side of expectation, you get assigned at the target anyway

So I tried this today. I'm long some number of NQ contracts and when price reached the target I'd normally exit at, I sold an ATM call. This added about 30 points to the trade if I hold till expiry (tomorrow). Effectively, it reduces my cost basis if I'm wrong but also adds to my profit if I get assigned.

So tell me, index futures geniuses, all the number of ways this is wrong and stupid.

I'll start:

1. Just close the position and move on, dumbass. No need to eke every cent out of a trade.

 

[CannonTrading_Ilan]

I actually like the idea...depending on targets/time holding the trade etc. you can use the money u got from selling the call to buy a put in case market reverses...then we need to look at total math...how many point you got, cost of put, how much profit in the futures position etc.

 

[nooby_mcnoob]

I actually like the idea...depending on targets/time holding the trade etc. you can use the money u got from selling the call to buy a put in case market reverses...then we need to look at total math...how many point you got, cost of put, how much profit in the futures position etc.

Thanks but it's just an idea, I'm presuming if most people don't do this then there is something missing

 

[CannonTrading_Ilan]

the price goes the right way part of the equation is good...however what happens if price does not hit the target to sell the call and goes against you to begin with?

 

[murray t turtle]

I'm trying to figure out how to hold positions longer. I'm getting better at directional trading, which is fine but I have the usual problem of closing the position too early.

I'm experimenting with the following:

1. Get an index position, set a price target expectation
2. When price reaches expectation, sell covered call/put
3. If price is on the right side of expectation, you get assigned at the target anyway

So I tried this today. I'm long some number of NQ contracts and when price reached the target I'd normally exit at, I sold an ATM call. This added about 30 points to the trade if I hold till expiry (tomorrow). Effectively, it reduces my cost basis if I'm wrong but also adds to my profit if I get assigned.

So tell me, index futures geniuses, all the number of ways this is wrong and stupid.

I'll start:

1. Just close the position and move on....... No need to eke every cent out of a trade.

%%
Price targets tend to underperform, nMcNB;
even more so>> in a good bull market uptrend. I watch plenty of monthly/quarterly charts, but since ES+ such ..... is designed to trade, not sure if that will help much. QQQ + SPY has diVidends=that helps a lot. BUY one sell2nickmane does pretty good profit with big ES drawdoWns.
Should be plenty of little thing you can do;
when we have a 3rd day Friday deadline, or a bank loan on REAL estate, cant hold as long as we would like.............................................................................................So I like late sells on some , not all,

 

[nooby_mcnoob]

the price goes the right way part of the equation is good...however what happens if price does not hit the target to sell the call and goes against you to begin with?

That's fine in the sense that I'd have a much better break even price. In fact, if I do your sell call to buy put idea, I'd be profitable at my initial entry.

%%
Price targets tend to underperform, nMcNB;
even more so>> in a good bull market uptrend. I watch plenty of monthly/quarterly charts, but since ES+ such ..... is designed to trade, not sure if that will help much. QQQ + SPY has diVidends=that helps a lot. BUY one sell2nickmane does pretty good profit with big ES drawdoWns.
Should be plenty of little thing you can do;
when we have a 3rd day Friday deadline, or a bank loan on REAL estate, cant hold as long as we would like.............................................................................................So I like late sells on some , not all,

Indeed... In the end, I think it's probably too much complication.

 

[nooby_mcnoob]

%%
Price targets tend to underperform, nMcNB;
even more so>> in a good bull market uptrend. I watch plenty of monthly/quarterly charts, but since ES+ such ..... is designed to trade, not sure if that will help much. QQQ + SPY has diVidends=that helps a lot. BUY one sell2nickmane does pretty good profit with big ES drawdoWns.
Should be plenty of little thing you can do;
when we have a 3rd day Friday deadline, or a bank loan on REAL estate, cant hold as long as we would like.............................................................................................So I like late sells on some , not all,

Thinking more deeply about what you said, of course you are saying that don't place expectation on the price target but actually, my strategy does that... Just because within a few bars, it has some stupid little edge (backtested) where we can say "this is probably the max you'll get".

Now, were it trend following, of course I couldn't/wouldn't say that!

 

[gaussian]

I'm trying to figure out how to hold positions longer. I'm getting better at directional trading, which is fine but I have the usual problem of closing the position too early.

I'm experimenting with the following:

1. Get an index position, set a price target expectation
2. When price reaches expectation, sell covered call/put
3. If price is on the right side of expectation, you get assigned at the target anyway

So I tried this today. I'm long some number of NQ contracts and when price reached the target I'd normally exit at, I sold an ATM call. This added about 30 points to the trade if I hold till expiry (tomorrow). Effectively, it reduces my cost basis if I'm wrong but also adds to my profit if I get assigned.

So tell me, index futures geniuses, all the number of ways this is wrong and stupid.

I'll start:

1. Just close the position and move on, dumbass. No need to eke every cent out of a trade.

It sounds like you're doing a weird form of gamma scalping. Nothing wrong with it, but since you're trading directionally a loose stop might be all you need. I think you're overcomplicating it, to be honest.

 

[nooby_mcnoob]

It sounds like you're doing a weird form of gamma scalping. Nothing wrong with it, but since you're trading directionally a loose stop might be all you need. I think you're overcomplicating it, to be honest.

Yep, thanks for confirming that I'm overcomplicating it

 

[traider]

If your entry trade has very strong positive expectancy then any type of exit, stops, timed exits will work.
Otherwise a simple stop will be useless, 2 random trades will net you random results minus comms and spreads.