fwiw, i'm not an OTA student, though I'm aware of who they are. And yea, I don't think it's reasonable to charge that amount for stuff I think you can probably find for free. But that's the whole point of discretionary trading. You let winners run, cut losers short and manage risk. I've personally found the zones helpful as a way to structure my trades and define entry/stop/profit targets. You don't need a >50% W/L ratio to be profitable. Maybe you're a quant or algo trader, and I take it your strategy is different. I'm happy to be enlightened if you can share the different ways you trade in the market. Or share a little more about your background.
Well you gotta admit. They all look good on the charts. The pitchforks, the gann fans and the "Wavey crap" aka Elliott Waves. LOL Elliott waves is actually based on the Fibonacci sequence, another very elegant mathematical concept. They are all very elegant concepts but the problem with them is that they don't take into account the chaotic or random walk elements in trading. These are all elegant math concepts which are all very elegant in theory but the market isn't all theory. It's both very practical and dynamic and those concepts don't accommodate that so they are not reliable systems to be used for trading. You can use them as a guide to give you a rough idea of where the market could be going but you need to use other tools for confirmation for sure.
I agree the market doesn't care what patterns, levels, indicators I'm looking at. I just focus on price action and try to get a sense of who's in control. If I'm wrong, then I'm wrong, it doesn't matter as long as I manage risk. I happen to think elliot waves are stupid, but some people use them and for all I know are profitable from it. I don't suppose tom thinks classical patterns are useful either, but they exist in the charts and yes, they do fail. But the fact that they fail is a signal that you're wrong and should probably get out. There are many people who trade fundamental ideas, and I'm sure a lot of them had a really great time shorting tsla. I think there are a wide variety of ways to profit from the markets. Just because you don't use it or someone else charges $10k for a course doesn't mean it's completely useless. So far I've not seen a compelling reason to just throw away what I've learned and has worked for me and others.
Well there are a thousand ways to skin a cat, that's for sure. But I don't think 100% reliance on these concepts will yield profitable trading, let's put it that way. Like I said, you can use them as a guide sure but not rely on them totally as the only tool to use.
Not So. It has to beat a return adjusted coin flip. If you make 3:1, then you can lose 60% of trades and do fine. (not my game, just saying).
Yes. I trade the /ES Weeklys (and EOM) profitably (with the occasional (but contained) loss of course.) Sometimes I sell the Monday Weeklys, sometimes the Wednesday Weeklys, sometimes the Weeklys that expire on Friday. Sometimes I trade a Weekly product that expires in 2 or 3 days sometimes a Weekly product that expires in a week or two. Some stock and ETF Weeklys (e.g. AAPL, AMZN, SPY, etc. have Weeklys listed out to the end of January. The SPX index options have dozens of Weeklys listed out to the end of May 2021. Futures Weeklys (e.g. the /ES) have Weeklys (WK2, WK3, WK4) also listed out to the end of May 2021. Some Futures Options have no Weeklys (e.g. /CL and /GC.) I do not use Supply/Demand Zones, Bollinger Bands, Wilder's RSI, Appel's MACD, Simple/Hull/ Exponential moving averages, Pitchforks, Gann lines, Fibonacci's or (my favorite) Dragonfly Dojis or Swinging Hammers (analysis the Japanese rice traders used in the 16th century. I do use some fundamental analysis (e.g. jobless claims, mortgage applications, etc.) which the market has usually already factored in and options Greeks, principally delta, theta and gamma. Along with Standard Deviation and expected moves at 1SD, 2SD, etc. I do not, unlike some others (pundits/sages/thinkers/mavins, know-it-all scholars and television personalities like Jim Cramer) have any idea what the markets are going to do a minute from now, an hour from now, tomorrow, or next week/month/year. Nor have I found technical analysis program that can project a future price based on what just happened in the last seconds/hours/days/etc. Based on my research I have found that all technical analysis tells me is what has happened, not what will happen. There's a book on Amazon.com entitled "Technical Analysis: Is Mostly Bullshit - Why Flipping a Coin is a Better Strategy than Using Technical Analysis in the Financial, Stock, and Forex Markets." Plus there have been many books and professional/academic research papers that show why technical analysis doesn't work. Which is why someone out there is always working on yet another concept because they have discovered, as author tommcginnis has pointed out, "...new shit is invented to explain the variance away." Available to you for just $$$$, credit cards gladly accepted. So, as I said, I trade the /ES options, credit spreads, using both short Puts and Calls protecting the position by using an offsetting long option (i.e. a vertical credit spread). If I sell both a Put and Call vertical with the same expiration it ends up being an iron condor although my iron condors look lopsided because they are more dynamic than static (same deltas vice equidistant from the ATM Options.) Skew I think that's called. Your experience may vary of course. I have a trading plan that includes, for what it's worth; -No Technical Analysis. A simple chart to tell me where the market has been. -Learn what products offer options (e.g. stocks, ETFs, Indices, Futures, etc.) -Learn which exchanges) they're traded on -Trading specifications (tick size, trading hours, European or American exercise) -Futuers and Futures Options, what expires when and Triple Witching Hour -Expiration characteristics (Mon, Wed, Fri, EOM, Quarterly, etc.) -AM or PM settled (the SPX, RUT, VIX (and others) can bite you if you don't know that -What drives a particular market (e.g. wars, embargoes, earnings, interest rates government interference) -Explore the dozens of trading strategies available (e.g. Buy or Sell, Spreads, Diagonals, Butterflies, Iron Condors, Ratios, etc. -Consider Bid size, ask size, volume and open interest -Put Call ratio (i.e. where's the money) -What to do when a position is challenged (e.g. nothing, rolling, closing, etc.) -Position limits (e.g. how much $$$ to trade per position) -When to take a profit (e.g. 50-75% of the credit) or % loss. And, finally, you DON'T need to spend much, if any, money on this stuff. Use the free training and knowledge offered by the exchanges and various websites to help build your knowledge base. Best
Enjoyed your post. Your approach to trading is similar to mine. However I use mostly calendar spreads and diagonals, and hedge for extreme moves either up or down. Do you make much use of those ?
Generally I limit my positions to 2% or less of my portfolio. That gets me about 10 contacts of the /ES, 5 on the Put and 5 on Call side. I look for 16 Delta (or less) for the short side option and 10 wide for the strikes. Rather than more contracts for a given spready I tend to widen the legs. For example I put on a trade yesterday (Friday) for /ES Weeklys expiring Monday) Puts and Calls (E2AZ20) with the short strike at 3575 and the long at 3555 for the Puts. For the Calls it was the 3695 for the short side and 3716 for the long side. I did that based on my analysis, as I said, of the delta and theta and the 90% probability of the short (and long) strikes expiring OTM. Pretty simple really. And no Bollinger bands or dimpled chads required. If one side or the other is challenged beginning tomorrow evening (the futures markets begin trading at 6:00PM (ET) on Sunday evening then I'll consider closing or rolling the challenged side. It's just that simple. Best
Up to how many positions? In other words, are following the usual advice of premium sellers - always play it small?