Dude, go read coach's strategy again and examine the way he is hedging it. You will then realize that what you just said makes absolutely no sense. Even if it did, money down the drain is money down the drain whether it is $100 or $100,000 and that's that last comment i will make on this subject. So much confusion around here i won't touch it anymore.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Dude, go read coach's strategy again and examine the way he is hedging it. You will then realize that what you just said makes absolutely no sense. Even if it did, money down the drain is money down the drain whether it is $100 or $100,000 and that's that last comment i will make on this subject. So much confusion around here i won't touch it anymore.
Yawn... the playground is so last year....
thanks Coach
The ability to think rationally lessens when we are in a herd or crowd. I took the loss as part of the game and even evaluated what did i do or not do that led me to this loss. I think trading is one skill we all need to know in this global completition. so i am pretty sure trading is for me. I made money in the last 5 months and even closed out a couple of times to take my money off the table.
This experience will serve me in the long run.I am looking to swing back into the saddle. Appreciate if you experts take my RUT trade and explain how i could have handled this trade like a Pro.
The ability to think rationally lessens when we are in a herd or crowd. I took the loss as part of the game and even evaluated what did i do or not do that led me to this loss. I think trading is one skill we all need to know in this global completition. so i am pretty sure trading is for me. I made money in the last 5 months and even closed out a couple of times to take my money off the table.
This experience will serve me in the long run.I am looking to swing back into the saddle. Appreciate if you experts take my RUT trade and explain how i could have handled this trade like a Pro.
Scaled into some long ES positions over the course of the day yesterday looking for pullbacks from the huge drop. Down a bit so far but gonna hold on through next week as long as the cash index stays above 1270...
I will say upfront that I do not follow the RUT anymore so I am out of touch with support and resistance and past moves. The general thing you have to understand is that you did not make a mistake so much as the market had a huge move unlike any move it has had in 3 years. Not easy to predict those but we always have to trade with those days in the back of our head.
Especially going close to the money with little time left to expiration. So the lesson to be learned is to make sure an event like this only stings by not putting all the chips in such a position (a late scalp in the last few weeks so to speak) and look to the chart for strong stop points based on technical analysis to determine when a down move has lost its support and more is coming so you can roll down or get out.
The funny and ironic thing is that even though risk management is so important to trading, its true benefit comes in that it is the ONLY THING WE CAN CONTROL! I cannot control what the markets do, just trade off of it. However, no one can contorl how much money I will lose in a position or my maximum loss. I alone control that and mastering that control is the key to success. The strategy is meaningless. I have said this 1000 times and I will say it again. The strategy is meaningless. Every strategy makes money in the right conditions so the key is to find those right conditions and enter the position and use risk management to stay in the race.
In my prop account I did a 1250/1255 spread to scalp some premium in the last week or two. Yesterday's move had me attentive given the dip to 1268 but I made no adjustments based on my expectation of a pullback today and mild SET. If I was wrong I was ready to take action this morning (and still am since the day aint over yet!). But I feel I will most likely profit on this position like I did the last one.
BUT, I probably will not do the same type of trade for a long time. It was just outside my comfort zone and despite being profitable, the market reminded me how it feels to be outside of that zone. So the position has taught me and reinforced my risk management plans and why it is not important to stray even a little bit. Lessons can be learned from profits as much as they can from losses.
So yesterday was a lesson in how violent the market can become in a short period of time (1 week) and how the environment is as important as the market itself. We are in an environment where a little piece of news one way or the other regarding inflation and interest rates will move this market so I will look to be even further OTM for less premium for JUNE and JULY since it covers the next fed meeting and mor economic reporting.
Especially going close to the money with little time left to expiration. So the lesson to be learned is to make sure an event like this only stings by not putting all the chips in such a position (a late scalp in the last few weeks so to speak) and look to the chart for strong stop points based on technical analysis to determine when a down move has lost its support and more is coming so you can roll down or get out.
The funny and ironic thing is that even though risk management is so important to trading, its true benefit comes in that it is the ONLY THING WE CAN CONTROL! I cannot control what the markets do, just trade off of it. However, no one can contorl how much money I will lose in a position or my maximum loss. I alone control that and mastering that control is the key to success. The strategy is meaningless. I have said this 1000 times and I will say it again. The strategy is meaningless. Every strategy makes money in the right conditions so the key is to find those right conditions and enter the position and use risk management to stay in the race.
In my prop account I did a 1250/1255 spread to scalp some premium in the last week or two. Yesterday's move had me attentive given the dip to 1268 but I made no adjustments based on my expectation of a pullback today and mild SET. If I was wrong I was ready to take action this morning (and still am since the day aint over yet!). But I feel I will most likely profit on this position like I did the last one.
BUT, I probably will not do the same type of trade for a long time. It was just outside my comfort zone and despite being profitable, the market reminded me how it feels to be outside of that zone. So the position has taught me and reinforced my risk management plans and why it is not important to stray even a little bit. Lessons can be learned from profits as much as they can from losses.
So yesterday was a lesson in how violent the market can become in a short period of time (1 week) and how the environment is as important as the market itself. We are in an environment where a little piece of news one way or the other regarding inflation and interest rates will move this market so I will look to be even further OTM for less premium for JUNE and JULY since it covers the next fed meeting and mor economic reporting.
Quote from rallymode:
What all successful traders have in common is they get paid = or > for the risk that they take. I guarantee you that a beginner will not be able to adjust/hedge a low r/r strategy the way they should to get compensated properly for that risk. Hence, their money is better suited with high r/r trades/strategies.
But no one listens to me so try it out yourself.
It seems that at least a few people are venturing closer to the money these days. Just one point (that should be quite obvious but I'll say it anyway) from a supporter of closer to the money spreads.
The strategy for adjustments and hedging that works for FOTM will not work well for near ATM. If you try to use those hedging strategies you'll be screaming at your computer by next week.
Nope. I think we are still headed down a little further.
I think that FOTM and ATM spreads are two different approaches completely and should not be compared really, for trading purposes and, as pointed out, for adjustment purposes. It is more of a directional bet no different than doing an ATM debit spread and using TA to know when to simply get out and the loss side while letting the other winners run should put you ahead in the long run. As always risk management is what gives you positive net returns.
Those of you who are interested in this style, use smaller amounts of spreads ( like 10 10-point spreads). It is not the same approach as credit spreads where you might do 50 or 100.
Personally I think the wide bid ask spreads of the SPX eat so much into profits, I would recommend the ATM credits perhaps be done on SPY.
Those of you who are interested in this style, use smaller amounts of spreads ( like 10 10-point spreads). It is not the same approach as credit spreads where you might do 50 or 100.
Personally I think the wide bid ask spreads of the SPX eat so much into profits, I would recommend the ATM credits perhaps be done on SPY.