You are considerably more knowledgeable than I could ever claim. And more sophisticated. My strategy has been when Hull's moving average crosses from a sell to a buy, I purchase 5 ATM Call contracts. So on the 28th & the 2nd I bought 5 ATM for SPY, the last time I looked those purchases were ahead 113%. I also have been accumulating SPY calls since Oct. When Hull's moves from up to down, I'll either buy weekly puts or close all the positions-- I try to catch a flush with QQQ, so I close the calls.. I'm sure there will be people criticizing this, saying it's not going to work if we go into a bear market or get a crash. And that's probably true. But if the moving averages are heading down, I'm certainly visual enough to not go against it. I realize that having a 2 million dollar account is much different than having a 200 K account. So I can only offer my congratulation on your success in 2017.
Two Years of Trading Dangerously at 84% Annualized Returns
- Thread starter InTheMaking
- Start date
You are considerably more knowledgeable than I could ever claim. And more sophisticated. My strategy has been when Hull's moving average crosses from a sell to a buy, I purchase 5 ATM Call contracts. So on the 28th & the 2nd I bought 5 ATM for SPY, the last time I looked those purchases were ahead 113%. I also have been accumulating SPY calls since Oct. When Hull's moves from up to down, I'll either buy weekly puts or close all the positions-- I try to catch a flush with QQQ, so I close the calls.. I'm sure there will be people criticizing this, saying it's not going to work if we go into a bear market or get a crash. And that's probably true. But if the moving averages are heading down, I'm certainly visual enough to not go against it. I realize that having a 2 million dollar account is much different than having a 200 K account. So I can only offer my congratulation on your success in 2017.
That's not a bad strategy and seems it could be systemetized. I'm gonna start testing it next week. Why a hull moving average? Why not just any other MA? Or MACD?
The posting wasn't meant to solicit congrats. I am sincerely seeking other trading partners of better calibre. And I can't really claim "good" with the growth. I just happened to be lucky enough to liquidate my entire FB position on Thursday before the 5% drop and fast enough to close my nasdaq shorts before the rally. Then again we all feel like geniuses in a bull market
What happened towards the end of Dec ? A third of your total 2 year return came from there.
What futures were you trading?
I traded CL futures during Feb/March of 2017. Suffered a 15k loss and stepped back and analyzed why I did so poorly. It was pure directional trade that I just wasn't good at. It was also very stressful dealing with 3 contracts of crude and the associated leverage. Instead I switched my strategy to futures options, where I could quantitatively assess the greeks and adjust my deltas and position sizing across various time frames. I have since been able to make up my some of my losses. So you might consider future options instead of futures. The tools to indicate IV on future options however is much to be desired.
The strategies that I adopt benefits from such "pops" couple of times a year. It happened in Apr'17, Sep'17 and Jan'18. Just a series of events where I see breakouts in volatility, price action to the upside or downside (depending on the bias). The true test of my trading skills is if I close these positions early enough to retain the profits. I sucked in May, got a tad better in October, because the pullback wasn't as severe and the "now" period, in the process of liquidation. This part, still requires more honing of skills. :/
What happened towards the end of Dec ? A third of your total 2 year return came from there.
I trade those regular eMini, ES, NQ and YM. You made a very good suggestion about future option. I might give a try. Thanks.
Moved it over from another thread
Interesting. Do you think you were a net seller of risk premium?
Thanks for the thread transfer. As mentioned, during my first 9 to 12 months of trading, I was a net seller of risk premium. Then I realized how much risk I was taking on without much ability to control. Plus, I didn't enjoy blindly selling SPX credit spreads on a weekly basis. Just seemed like a disaster waiting to happen. I believe most option traders start off this way and then graduate to more complex methods where they can better control risk
What's a "smaller capacity strategy"? Smaller capital requirements?
My plan is to scale my strategy to a larger fund. I won't be driving 80%+ returns then. Will be happy if I can outperform the SPX by 5% to 7%
In general, that means that if you retain similar risk metrics, you can only produce a small absolute amount of money.
Probably you mean that during the two years in 2016 and 2017.
At that time, the market changes from 18000 to 25000 which is roughly
(25000-18000)/18000 = 0.3888889 = 40% difference. (annual 20%) That means average trader with 100K should attain 140K in account during the two years.
OP made 84% annualized for the two years, then the difference 84-20=64% is the real (annual) return return after the market change.
If you keep this return for 10 years, then you will be the RICHEST man in the world 10 or 20 years later.
BTW how was your (annual) return rate in percent for the last 10 or 20 years?
And how much did you pay the commission and 1040 income tax for entire life?
At that time, the market changes from 18000 to 25000 which is roughly
(25000-18000)/18000 = 0.3888889 = 40% difference. (annual 20%) That means average trader with 100K should attain 140K in account during the two years.
OP made 84% annualized for the two years, then the difference 84-20=64% is the real (annual) return return after the market change.
If you keep this return for 10 years, then you will be the RICHEST man in the world 10 or 20 years later.
BTW how was your (annual) return rate in percent for the last 10 or 20 years?
And how much did you pay the commission and 1040 income tax for entire life?