POLL: Are you a home run champ or a batting average champ?

Quote from candletrader:

Do you go for smaller gains with a higher chance of getting em, or larger gains with a correspondingly lower chance?

Please vote...
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You can have both, just do multiple contracts with the last contract a "runner" for the home run.

pretzel
 
Quote from pretzel:



You can have both, just do multiple contracts with the last contract a "runner" for the home run.

pretzel
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That is exactly what I do. I like having the high winning % but I also like have the chance to hit one over the centerfield wall.
 
Quote from rolegario:

Nassim Taleb (the guy who wrote "Fooled By Randomness") is probably the consummate homerun hitter. I read an article about him in New York Magazine that described his hedge fund strategy. He basically concluded that although the odds of a catastrophic market event is mathematically small, in reality (due to market psychology, herd mentality, etc.) it happens far more frequently. So, he basically buys up tons of oom options on the cheap. When they expire, he just buys up more. Most of the time his fund just slowly bleeds money. But, every few years a major shock occurs and he makes a BUTTload.

What's also interesting is that his system is PURELY mechanical. His team developed a black box that just spits out which options to buy up. The team spends most of the day just playing with mathematical models, figuring out how to improve the system.

I, personally, am not at the point (psychologically or financially) where I'm even willing to approach a homerun strategy. You gotta be able to sustain long dry spells. That would drive me crazy!
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I read this same article. Talk about a fence swinger. This guy is/was Dave Kingman times three
 
Quote from pretzel:



You can have both, just do multiple contracts with the last contract a "runner" for the home run.

pretzel
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Can you explain this a bit more for a newbie, i think i get what you mean but I am not quite sure.

Thx in advance :)
 
One has to realize when in a home run situation; then swing.

Banks at BKX 665, was a home-run for us. Sold most Friday.

Other than that, consistency counts, especially with losers, keep 'em small always.

best,
david
 
Quote from candletrader:



Once you've found something that achieves both [home runs and high average] simultaneously, I will be first in line to buy it from you :D
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I mean have two methods, one for home runs, one for high average, and trade both as the situation permits.
 
Quote from Osiris:



Can you explain this a bit more for a newbie, i think i get what you mean but I am not quite sure.

Thx in advance :)
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If you have an original system with a target of 10 points (the low probability homerun) and you're stopped out, chances are the market will go at least a little way in your direction first (the high probability scalp) before reversing and stopping out.

Using the same system, if trade another contract with the target at the closer point, chances are you will hit your target easier than the homerun. So, if the first target is hit and you move the stop for the 2nd contract (the runner) to breakeven - you can go for the homerun riskless and with at least a few points in your pocket already.


pretzel
 
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