technical analysis dax signal

[galvinlee888]

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.

Never disagree, but sometime luck did play a big role in trading, no different from casino - 99% gamblers loss but you have the 1% lucky one.

I know a guy that barely know options (he only knows to buy call when market goes up and put when market goes down). He manage to grow his account from 10k to about 80k in about 4 months. Obviously he loss in the long term. He is lucky enough to move majority of his money to something else before the sh** hits.

 

[Trading Education Buyer]

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...

You have to trade this volatility , but volatility was bad for last 8 weeks .Then when trend breaks out , it moves 600 points , without a protective option it will end in disaster.I have seen 3,000 point trends on dax.

 

[justrading]

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

My problem with all of this is in post #73 you crow about making "$2,000 profit this week", which sounds wonderful.

Then you say here you lost 160 ticks, points actually.

Your average dumb shmuck will say, oh he's made 2,000, he's down 160. And he's doing other stuff, so it can't be all bad.

Well sunshine, down 160 is down €4,000, which a simple Google conversion request says is $4,224.

Plus 2k minus 4K is minus 2k, unless the nett is -160, in which case you've gone from +2k to -4K, a 6k swing. I didn't see you shouting that from the rooftops like you did the plus 2k.

The impression you leave people is you are up 2k, having minor difficulties, but you are acting and sorting it out.

Reality is you are up shit creek without a paddle.

 

[Trading Education Buyer]

My problem with all of this is in post #73 you crow about making "$2,000 profit this week", which sounds wonderful.

Then you say here you lost 160 ticks, points actually.

Your average dumb shmuck will say, oh he's made 2,000, he's down 160. And he's doing other stuff, so it can't be all bad.

Well sunshine, down 160 is down €4,000, which a simple Google conversion request says is $4,224.

Plus 2k minus 4K is minus 2k, unless the nett is -160, in which case you've gone from +2k to -4K, a 6k swing. I didn't see you shouting that from the rooftops like you did the plus 2k.

The impression you leave people is you are up 2k, having minor difficulties, but you are acting and sorting it out.

Reality is you are up shit creek without a paddle.

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

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



It has not been too bad overall ,over last few weeks , so just let me call it in points only , in future.

I am referring to points , full points all the times.Not ticks.

I always mean points when I say ticks.


The EDGE of premium decay

 

[justrading]

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

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



It has not been too bad overall ,over last few weeks , so just let me call it in points only , in future.

I am referring to points , full points all the times.Not ticks.

I always mean points when I say ticks.


The EDGE of premium decay

Fine, call it purely in points.

In trading, shit happens. To all of us.

Just don't forget that when you have the wind in your sails.

 

[Trading Education Buyer]

Fine, call it purely in points.

In trading, shit happens. To all of us.

Just don't forget that when you have the wind in your sails.

I will explain to you this strategy here.There are two strategies on this journal 1) high probability system trades on futures , a weekly and monthly options combo with future

Before I go further , I made one mistake last week , the long protection put should have been at 10800 , i felt a little too confident to buy this lower , this would have reduced loss by 80 from 141 to 61

i did not call the following trade on this journal , busy ,I actually did this trade
long 10980 , long weekly put 43.2 and short jan 11100 call 210.closed 70 ticks profit

See my earlier post.The second trade closed with 70 ticks profit , actual loss 71 last week
less long on trend breakout of 57 = 14 loss actual

So I still would have ended in profit 9 +57 on = 66 , If I had not self sabotaged by 100 points on the long put.This was a mistake because premiums were a bit higher for the 10800 protection call.

The difference is 80 between the expected profits of 66 and actual loss of 14.


Weekly futures and options combo:The strategy

Long

buy weekly put (protection) , 150 points lower no more than 40 premium , buy future at support or oversold area or trending mode , and sell a call ATM FOR 1 MONTH TO EXPIRY


Short

Buy weekly call (protection ) 150 points higher , no more than 40 premium , sell future . at resistance or overbought area or in trend mode , and sell a put ATM FOR 1 MONTH TO EXPIRY

Close trades for 40 points profit nett after protection costs , several times a week , if volatility is good.Recent 7 weeks volatility was poor.

Reinstate trades at previous levels , after a take profit and price returns to same level.

After a trend breakout , if price moved very far away , from short put , don't close it , place a sell stop 100 pints below strike price of short put but if price moved far away from short call , enter a buy 100 points above strike of short call.This is to get some losses back.

The thinking behind this strategy is , it gives you a 150 point protection against an adverse move .

Also longs can be rolled forward on expiry (not shorts) , by buying a long monthly put , 100 points lower , if longs close at a loss

This strategy should make 30 points plus ,on average .if you trade with real brokers , you should get 45 points.

 

[justrading]

I will explain to you this strategy here.There are two strategies on this journal 1) high probability system trades on futures , a weekly and monthly options combo with future

Before I go further , I made one mistake last week , the long protection put should have been at 10800 , i felt a little too confident to buy this lower , this would have reduced loss by 80 from 141 to 61

i did not call the following trade on this journal , busy ,I actually did this trade
long 10980 , long weekly put 43.2 and short jan 11100 call 210.closed 70 ticks profit

See my earlier post.The second trade closed with 70 ticks profit , actual loss 71 last week
less long on trend breakout of 57 = 14 loss actual

So I still would have ended in profit 9 +57 on = 66 , If I had not self sabotaged by 100 points on the long put.This was a mistake because premiums were a bit higher for the 10800 protection call.

The difference is 80 between the expected profits of 66 and actual loss of 14.


Weekly futures and options combo:The strategy

Long

buy weekly put (protection) , 150 points lower no more than 40 premium , buy future at support or oversold area or trending mode , and sell a call ATM FOR 1 MONTH TO EXPIRY


Short

Buy weekly call (protection ) 150 points higher , no more than 40 premium , sell future . at resistance or overbought area or in trend mode , and sell a put ATM FOR 1 MONTH TO EXPIRY

Close trades for 40 points profit nett after protection costs , several times a week , if volatility is good.Recent 7 weeks volatility was poor.

Reinstate trades at previous levels , after a take profit and price returns to same level.

After a trend breakout , if price moved very far away , from short put , don't close it , place a sell stop 100 pints below strike price of short put but if price moved far away from short call , enter a buy 100 points above strike of short call.This is to get some losses back.

The thinking behind this strategy is , it gives you a 150 point protection against an adverse move .

Also longs can be rolled forward on expiry (not shorts) , by buying a long monthly put , 100 points lower , if longs close at a loss

This strategy should make 30 points plus ,on average .

So that ITM call that's been bugging me isn't in the playbook.

Do you model probabilities on the trades, R:R and so on?

I've got the old Hoadley software somewhere, I'll see if I can dig it up and model some of your trades.

 

[Trading Education Buyer]

So that ITM call that's been bugging me isn't in the playbook.

Do you model probabilities on the trades, R:R and so on?

I've got the old Hoadley software somewhere, I'll see if I can dig it up and model some of your trades.

Historical volatility has been 400 points from low to high , so i base it on that .Last few weeks , excluding last week has been 250 points low high average

I am looking to pay 60 premium for protection and hope to get 120 , less losses on price movements on open to close , then aim for more profit from rolling over losing longs .

I am struggling with decay on the short options , how do I improve ?

Move to short weekly?

 

[justrading]

Historical volatility has been 400 points from low to high , so i base it on that .Last few weeks , excluding last week has been 250 points low high average

I am looking to pay 60 premium for protection and hope to get 120 , less losses on price movements on open to close , then aim for more profit from rolling over losing longs .

I am struggling with decay on the short options , how do I improve ?

Move to short weekly?

Need to model.

If you sell the short options too far out, switching to weeklies might help, but it's not linear so you'd have to model and consider alternatives and possible outcomes. At least I do.

 

[galvinlee888]

Weekly futures and options combo:The strategy

Long

buy weekly put (protection) , 150 points lower no more than 40 premium , buy future at support or oversold area or trending mode , and sell a call ATM FOR 1 MONTH TO EXPIRY


Short

Buy weekly call (protection ) 150 points higher , no more than 40 premium , sell future . at resistance or overbought area or in trend mode , and sell a put ATM FOR 1 MONTH TO EXPIRY

Close trades for 40 points profit nett after protection costs , several times a week , if volatility is good.Recent 7 weeks volatility was poor.

Reinstate trades at previous levels , after a take profit and price returns to same level.

After a trend breakout , if price moved very far away , from short put , don't close it , place a sell stop 100 pints below strike price of short put but if price moved far away from short call , enter a buy 100 points above strike of short call.This is to get some losses back.

The thinking behind this strategy is , it gives you a 150 point protection against an adverse move .

Also longs can be rolled forward on expiry (not shorts) , by buying a long monthly put , 100 points lower , if longs close at a loss

This strategy should make 30 points plus ,on average .if you trade with real brokers , you should get 45 points.

You are over complicated yourself and waste your energy in the wrong place.

The more legs you are opening, the more negative expectancy you will put yourself in due to slippage and commission. You only become the best customer to your broker or owner of the bucket shop in this regards.

If you are bullish in the so called "resistance line", just long OTM call, otherwise just long the OTM put. If you believe the price will stay in the resistance line for a while and will reverse down to support eventually, just open a plain calendar put position, hold your long put after the short position expired and collect the money in your long put. Open calendar Call Position if you believe the price will stay in resistance for a while but breakout to upside will happen eventually.

The billion dollar edge will be : How can you tell if the price will whipsaw for while, OR breakout OR reverse in the resistance line ?