SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Quote from CashCache:
Interesting, and here I am thinking I am being conservitive
2 consequtive errors like that and you are out for good, how is that conservative?
Conservative would be keeping your max risk per trade/per month at a level that will allow your port to grow at a desired annual% after considering historical drawdowns.
So, when you say "2 consecutive errors" you really mean 2 black swan events, right?
While I don't have all the answers, and am still learning as I go, I can say that I would never let a position go 100 percent into the money (excluding the black swans). I start to look for a roll when my short strike is within 20 points, or the probability drops below 70 percent of expiring out of the money. The rules change a little based on how many days are left until expiration.
That being said, if I am being naive here, I'd like to know sooner rather than later. Isn't this similar to what most people are doing on this board?
Rally, your suggestions and opinions are welcome and appreciated.
While I don't have all the answers, and am still learning as I go, I can say that I would never let a position go 100 percent into the money (excluding the black swans). I start to look for a roll when my short strike is within 20 points, or the probability drops below 70 percent of expiring out of the money. The rules change a little based on how many days are left until expiration.
That being said, if I am being naive here, I'd like to know sooner rather than later. Isn't this similar to what most people are doing on this board?
Rally, your suggestions and opinions are welcome and appreciated.
Quote from rallymode:
2 consequtive errors like that and you are out for good, how is that conservative?
Conservative would be keeping your max risk per trade/per month at a level that will allow your port to grow at a desired annual% after considering historical drawdowns.
Well, i have no experience with the strategy so i can only guess. There is alot of info on this thread and coach has posted many insights as to good adjustment. My opinion is that telling yourself you will not allow a position to go against you 100% is easier said than done and sometimes even when you have the will power and knowledge to do it right there's slippage, being a lil late/early, gaps, etc. Thinking like that bothers my conservative way of thinking, but thats just me. I rather find comfort in the fact that perfectly timing my adjustments isnt a necessity but rather a preference.
Martingale would be doubling your bet every time you lose, and I'm not doing that - the table limits keep getting in the way
However, I am increasing my risk amount to defend a trade, and keep my probabilities of success about the same. Obviously if the market were on a rampage, the prudent thing to do would be to get out of the way. If you have found a way to defend a trade using the same amount of risk, and probability of success, I'd love to hear it.
However, I am increasing my risk amount to defend a trade, and keep my probabilities of success about the same. Obviously if the market were on a rampage, the prudent thing to do would be to get out of the way. If you have found a way to defend a trade using the same amount of risk, and probability of success, I'd love to hear it.
Points well taken, however I feel the same way. I don't need to time things perfectly in order to stay profitable using this strategy. I have my exit(s) planned for each one of my positions before I even put them on. My goal is to manage the risk first, and trade second.
I feel the real key to making money consistently with this strategy is to stick to your plan. Make it as mechanical and unemotional as possible. I really don't get attached to my positions. If I have to move a position and take a small loss to reduce my risk, no problem. If I can find a way to move a position to reduce risk AND make a profit, even better!!
I think it was Coach that used to say something like "Nickels and dimes a thousand times". In other words, make a consistent return month after month. It's when we start going for the quarters and dollars that we get carried out on our shields!
Just my .02
I feel the real key to making money consistently with this strategy is to stick to your plan. Make it as mechanical and unemotional as possible. I really don't get attached to my positions. If I have to move a position and take a small loss to reduce my risk, no problem. If I can find a way to move a position to reduce risk AND make a profit, even better!!
I think it was Coach that used to say something like "Nickels and dimes a thousand times". In other words, make a consistent return month after month. It's when we start going for the quarters and dollars that we get carried out on our shields!
Just my .02
CC well spoken my sentiments as well
I had to roll twice once -- it caused a loss (can't remember the amount) but it didn't kill the account or anything like that. In retrospect, I should have just got out of the way.
Quote from CashCache:
Martingale would be doubling your bet every time you lose, and I'm not doing that - the table limits keep getting in the way
However, I am increasing my risk amount to defend a trade, and keep my probabilities of success about the same. Obviously if the market were on a rampage, the prudent thing to do would be to get out of the way. If you have found a way to defend a trade using the same amount of risk, and probability of success, I'd love to hear it.