technical analysis dax signal

[Trading Education Buyer]

This trade losing 160 ticks , so doing other trades with risk to down side or may convert it to butterfly by selling second put at 11000 and buying call higher

10600 put is 69 = + 154 to buy back , 10900 call is +275 - cost 25 , short is minus -622 = - 218

I MADE 57 TICKS on a long above ,

i did not call the following trade , busy ,
long 10980 , long weekly put 43.2 and short jan 11100 call 210

right now making 135 ticks on it , so this week overall is no good , losing 40 ticks

 

[Trading Education Buyer]

10600 put is 69 = + 154 to buy back , 10900 call is +275 - cost 25 , short is minus -622 = - 218

I MADE 57 TICKS on a long above ,

i did not call the following trade , busy ,
long 10980 , long weekly put 43.2 and short jan 11100 call 210

right now making 135 ticks on it , so this week overall is no good , losing 40 ticks

65 profit on cash and call - less 43= 22 ticks profit

- 218 +57 +22= 141 loss at present due to trend breakout

 

[Trading Education Buyer]

with the losing trade a good strategy would be to place a sell stop a below short strike price
10600 put is 69

, placed sell stop at 10500 to recover part of the loss , the premium is most likely to come in my hand , by end of january , so it will reduce 141 loss by 69 less costs.

 

[galvinlee888]

Your strategy (long/short DAX cash future, hedge the expose by shorting deep in the money options in opposite direction, set the Stop loss using OTM option ) will work well in the range bound market due to decay in theta.

With DAX no longer in range bound, LOL...

 

[justrading]

Your strategy (long/short DAX cash future, hedge the expose by shorting deep in the money options in opposite direction, set the Stop loss using OTM option ) will work well in the range bound market due to decay in theta.

With DAX no longer in range bound, LOL...

Well, I think you've hit the nail on the head.

As someone responded to him in another thread, theta is not an edge, everyone knows it.

Safer to go with delta or vega, but for that you have to get either direction or volatility right, and structure the trade accordingly.

These are not obvious. There lies the edge.

 

[justrading]

Oh and by the way I don't have access to the option chains, but I'd guess 0.5% ITM has quite a bit of time premium built in.

The trouble is 0.5% could disappear in a day, and as it moves OTM and probability declines, well, you know the rest. We've just seen it this week.

 

[galvinlee888]

Safer to go with delta or vega, but for that you have to get either direction or volatility right, and structure the trade accordingly.

These are not obvious. There lies the edge.

IF you can predict the direction (up, down or sideway) or volatility correctly (or "right" in most time), you definitely have the edge and can live rich forever.

The problem is NO ONE can do this consistently in long term, not retail traders, not institutional traders. This is the reason why the main source of income from institutional is still coming from fees (especially from the day traders who pay the most in commission & slippage)

Reading Chart to predict direction or volatility is only imagination, a marketing ploy from education vendor or brokers.

 

[justrading]

IF you can predict the direction (up, down or sideway) or volatility correctly (or "right" in most time), you definitely have the edge and can live rich forever.

The problem is NO ONE can do this consistently in long term, not retail traders, not institutional traders. This is the reason why the main source of income from institutional is still coming from fees (especially the day traders who pay the most in commission & slippage)

Reading Chart to predict direction or volatility is only imagination, a marketing ploy from education vendor or brokers.

I don't read charts, I use quant models and look at charts to see if they make sense. Discretionary in that sense, maybe my fault since I don't yet have absolute trust in my models.

That said, I'm not going to knock people who trade off charts.

The thing I hate most in ET is people who think there is only one way to trade.

Peter Brandt has traded classical chart patterns all his life, and he's made more money than pretty much anyone here. He openly states chart patterns offer no edge, his edge is risk management/trade management/money management.

If I would make one point here, what anyone needs is a consistent structure to take trades, and the ability to manage R:R so that the expectancy is positive.

I do wish I had the ability to day trade just looking at charts. I don't, so I do what I do.

 

[galvinlee888]

I don't read charts, I use quant models and look at charts to see if they make sense. Discretionary in that sense, maybe my fault since I don't yet have absolute trust in my models.

That said, I'm not going to knock people who trade off charts.

The thing I hate most in ET is people who think there is only one way to trade.

Peter Brandt has traded classical chart patterns all his life, and he's made more money than pretty much anyone here. He openly states chart patterns offer no edge, his edge is risk management/trade management/money management.

If I would make one point here, what anyone needs is a consistent structure to take trades, and the ability to manage R:R so that the expectancy is positive.

I do wish I had the ability to day trade just looking at charts. I don't, so I do what I do.

I make a good living from buying/selling equities and ETF.

I never day trade (at least not with any serious money)
I never trade based on chart, chart is only my reference and NOT decision maker

 

[justrading]

I make a good living from buying/selling equities and ETF.

I never day trade.
I never trade based on chart, chart is only my reference and NOT decision maker

Well, I understand your point perfectly. Day trading doesn't suit my temperament, as I've openly stated on ET before.

Still, the way CIS, the Japanese day trader rakes it in, I can't help but wish I could do the same. I've posted about him, most recently on the ACD thread.

Day trading is a day dream, I know. He was a video game champion, I just can't be bothered with video games, never played them more than once each out of curiosity.

I spend hours every day analysing data. He just has an awareness of the markets in general, and trades what he sees on the charts.