how to backtest this option idea?

Discussion in 'Trading' started by elite1974, Sep 9, 2023.

  1. Regarding May18: It is just a normal day in the strategy.
    As I see Jan 24 is more problematic: 76k down :(

    Try to click the "Log returns" switch and you will see the actual PnL numbers.

    I made some further experiments by adding SL as a function of credit received:
    - 2x Credit: https://portal.deltaray.io/backtests/b254e7c8-5299-43c5-ab8e-d3825acb8f55
    - 3x Credit: https://portal.deltaray.io/backtests/e8704a43-2b1e-48f1-9509-345488a2c49e

    As these results are also disappointing I made a final try with an Iron Condor, entered similarly.
    Wings are 25 points wide, shorts being at 5 delta. SL is Credit received on put side * 3.

    The run: https://portal.deltaray.io/backtests/7c80b576-0a12-40b2-aa12-48b8e53295e7

    This looks much better:
    - CAGR: 40%
    - Max DD: -19.82 %

    I'm afraid trading this needs automation or you need to sit continously on front of the computer.

    @elite1974: Did you managed to automate similar strategies?
     
    #21     Sep 11, 2023
    dorietrading and elite1974 like this.
  2. I subscribed a year ago when they had only one plan, which is now the premium one.

    I think the above tests can be re-run in all the plans.
    Their premium contains VIX and RUT and something else which isn't used in the above tests.
     
    #22     Sep 11, 2023
  3. elite1974

    elite1974

    I sit in front of the computer all day :)
    nothing is automated
     
    #23     Sep 11, 2023
  4. I see. I'm also in front, but unfortunately I can't (yet) dedicated my full time to trading.

    Did you try to enter less times a day, (like 3), trading similar 0DTE strategies?
     
    #24     Sep 11, 2023
  5. elite1974

    elite1974

    I currently just enter straddles at my discretion, when I think it is a sideways day. (mostly selling strangles)

    I was just wondering what would the results be if it was done every day for a long time.
     
    #25     Sep 11, 2023
    Windlesham1 and kalapur73 like this.
  6. newwurldmn

    newwurldmn

    Don’t trade strategies where you will drop a years pnl every 14 months.
     
    #26     Sep 16, 2023
    Windlesham1 and dorietrading like this.
  7. Good luck- I have a book somewhere and 17 traders ALL ended up trading discretionally and doing well.
     
    #27     Sep 17, 2023
  8. status1

    status1

     
    #28     Sep 17, 2023
  9. status1

    status1

    Not only that but correct me if I am wrong but wouldn't you need more than 1 million dollars in margin to even think about trading this strategy ?
     
    #29     Sep 17, 2023
  10. elite1974

    elite1974

    each naked straddle uses approximately 260k of day trading buying power.

    so 12 straddles is about 3.1M of DTBP

    DTBP is 4x, so need ~780k of margin.
     
    #30     Sep 17, 2023