Trading as an art form

Dustin said:
For this type of trading I'm doing, the risk of selling early is greater than the risk of loss. I do try to sell around 1/4-1/3rd of the position once there's a decent profit, but the rest has to run no matter what happens.
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Hi again, Dustin. Did you approach trading stocks in the same way, while obviously honoring your original stop loss on the remaining shares you had?
 
Dustin said:
For this type of trading I'm doing, the risk of selling early is greater than the risk of loss. I do try to sell around 1/4-1/3rd of the position once there's a decent profit, but the rest has to run no matter what happens.
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Hoping Dustin will respond to this..since you are trading short term options, do you let these profitable trades run till expiration of the option? Is the option’s lifespan a natural time stop?
 
Gambit said:
Hoping Dustin will respond to this..since you are trading short term options, do you let these profitable trades run till expiration of the option? Is the option’s lifespan a natural time stop?
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I do hope Dusting is ok.

I can answer your question though since I asked this very same thing. Since he trades the 0 DTE options mostly, there isn't much time to mess around. If he sees he is completely wrong, he will be happy take 5 cents or 10 cents or whatever he can get because those add up over time he said.

Its not so much just buying a lottery ticket and walking away. He continues to manage the trade as the day goes on. And I think we can clearly see this as well. Rarely does the stock or index close on the very high or low. There will usually be a min or max somewhere in there (maybe 30 mins before close or 1 hour), and if you don't get out, you're losing money on a profitable trade. So I do think he tries to get out for a profit if he thinks that's all its gonna give, and close out the option for whatever residual value it has left if he doesn't think it will get any better.
 
NoahA said:
I do hope Dusting is ok.

I can answer your question though since I asked this very same thing. Since he trades the 0 DTE options mostly, there isn't much time to mess around. If he sees he is completely wrong, he will be happy take 5 cents or 10 cents or whatever he can get because those add up over time he said.

Its not so much just buying a lottery ticket and walking away. He continues to manage the trade as the day goes on. And I think we can clearly see this as well. Rarely does the stock or index close on the very high or low. There will usually be a min or max somewhere in there (maybe 30 mins before close or 1 hour), and if you don't get out, you're losing money on a profitable trade. So I do think he tries to get out for a profit if he thinks that's all its gonna give, and close out the option for whatever residual value it has left if he doesn't think it will get any better.
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Thank you. That's where the art and experience come in.
 
Gambit said:
Hoping Dustin will respond to this..since you are trading short term options, do you let these profitable trades run till expiration of the option? Is the option’s lifespan a natural time stop?
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It depends on the setup, but Noah above is correct. The one caveat is if I'm in NDX or SPX which cash settle...I will leave some of those for the closing print.
 
Good to see ya back, man.
Your thread linked below is a favorite.
What would you say belongs in a solid trading plan Dustin?
https://elitetrader.com/et/threads/anatomy-of-a-fun-2-day-trade-amc-60k.359907/

Dustin said:
It seems every post lately has someone complaining about how there are no real traders...nobody can make money...blah blah. I nailed this one pretty good, and had the entire chat to show at least some of the thought process. It should be educational for some. You can also see the GME play which was a small loser, but was nearly a big winner with the $195p. I came into Thursday long about 7 other "strong" stocks that nearly all failed, so I was red all day Thursday but this trade nearly got me even on the day. Today finished +$50k.

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Dustin said:
Hey guys, sorry I've been mia since trading has slowed down so much. We've gone from a great trading market to nearly untradeable (for this style). I spend a lot of my time now looking at other ideas for slower markets.
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Hey all, it's been a while because this style of trading doesn't work in the market we've had lately. I've really tightened up over the past months, trying to play safe...but always on the lookout for the big ramp days like we had Thursday. It finally hit, and I played it well for about $300k. I think it's fun for you guys to see my thinking as the day progressed so I grabbed my Slack chat. I edited out the other members for privacy. It's choppy without context but you get the idea.

As you will see I ended up being wrong with the overnight yolos and I gave back around $60k on Friday. The r:r was very good on the overnights so I'm ok with that. All flat going into this week. The perfect storm is weak market going into Th/Fri for a big reversal. Bear market rallies are everything.

dust247

hard to imagine today being the day with these headwinds <chat members were talking about how today could be the day>

6:13 AM

tomorrow would be better for us <because Friday cheapy options>

6:13 AM

unless something breaks today

dust247

TSLA going for lows

7:03 AM

I really want a wash, not this shit

dust247

lol not a seller in sight anywhere

7:14 AM

MSFT just went green for a sec

7:14 AM

we need targets on a 2-day rally

dust247

it's unbelievable how bad TSLA is now

7:34 AM

dust247

every uptick is met with a downtick right now <I'm referring to ES NQ>

7:56 AM

dust247

big tech wants nothing to do with this?

7:56 AM

SMH going green

7:57 AM

I just went green, you guys should sell everything right now

7:58 AM

see <I was joking here>

dust247

I booked a little green, going to leave until later <I had massive long positions here and have learned that I need to step away sometimes>

8:10 AM

dust247

I had stepped away but saw XXXy's caps <when a certain chat member is swearing in caps I know I need to be trading>

8:25 AM

booked my small NDX up there <this "small" NDX trade was worth around $50k>

dust247

yeah I had LRCX

8:27 AM

still have some

8:29 AM

fwiw AMZN shouldn't be red <AMZN and TSLA were big laggards, I love laggards.>


dust247

sitting at +140 now, lot's of day left to lose that or make 3x

8:33 AM

dust247

im big in AMZN

8:34 AM

and big in TSLA

dust247

got 10x on LRCX <all out>

8:36 AM

selling some more NDX here at 10x

8:37 AM

+210 fucking nuts <nice>

8:39 AM

dust247

lightened AMZN

8:40 AM

sold more NDX< always be taking profits to fund the eod yolos>

8:40 AM

dust247

those were 11100

8:41 AM

for tomorrow

dust247

had 20, down to 5 for overnight

8:42 AM

ok now I'm really leaving for a bit, sold a lot there <stepping away is important in these situations>

dust247

it's too hard to watch now

8:43 AM

dust247

booked around +200

8:43 AM

dust247

I want TSLA 230 <big tech barely ended up participating this day>

dust247

find your feet AMZN <poking AMZN to do something>

10:32 AM

to 117 you go

dust247

TLT playing along

10:38 AM

dust247

looks like I'll be holding massive AMZN as my overnight

10:40 AM

dust247

definitely worth a eod lotto

10:48 AM

dust247

sellers in TSLA for the past two hours have sold 2.5m shares

11:15 AM

while price held

dust247

just bought 1000 118c AMZN... o/n yolo

11:52 AM

even if it goes to 115 today those are 10x

11:56 AM

dust247

these are the guys that were missing for 5 months <high interest rates are the bane of my existence>

11:58 AM

dust247

I need AMZN for the real payoff <1800 calls for 1DTE was significant>

12:11 PM

it's slow

12:12 PM

1800 calls in different strikes

12:12 PM

but ill hold these overnight if needed

12:13 PM

let's get weird market <please>

12:14 PM

every downtick is -$20k, this is a little much for me

12:17 PM

dust247

today was an exercise in patience for sure

12:27 PM

I think I have the right trades on for o/n...minimal risk for max reward

12:28 PM
 
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