Seems on T2W Howard claims he's lost 8%. Now all that remains to be seen is the discussion on what his 8% is based on. He has 20% of his pot allocated to this strategy. The strategy returns 10% per month of 'risk capital'. No simple method of returns calculation for HC. Obfuscation is the name of the game. So.... Let's presume a $100k total portfolio. - $20k allocated to spreads. - $2k per month revenue from the spread strategy. - R:R is average 25:1 on any individual spread trade. So - is the 8% loss based on his total portfolio or on the 20% he allocates to the strategy? Given the R:R, I'd say most likely is he's done 8% of the $100k as opposed to 8% of the $20k. Also on T2W he states: "I should have lost less. I did not build my cash reserves up fast enough (as I was in the process of doing) so that my circuit breaker could not fire properly. I had to unwind other spreads to generate the cash. This let one of the spreads speed past my trigger point. That hurt. Lesson learned. " So this does show that he is 100% invested in spreads at any one time and that he had insufficient funds to unwind the position. Howard is licking his wounds on T2W and telling people they aren't worthy of replies if they don't have their own journals. Under pressure his persona breaks down somewhat and a mean streak shows itself. My sympathies to his students. As for HC himself - he's trading money he's embezzled from people on the false premise he has a profitable system to sell. Karma 1 - HC $0
just a few thought on this week. i had some credit spreads on spx and all i can say for anybody considering getting involved in these trades to really practice in all market conditions. this week really tested me and at one point i did want to vomit. lol. i did resist the urge to adjust trades when things looked really bleak thankfully. i know there were a lot of traders that got burned this week. i had a few 1250/1225 put spreads on that i had to roll down or close which really sucked. i still managed some decent profit for this month but i definitely had a stressful week. what frustrates me more was i was looking at a really nice put butterfly 1250/1275/1300 and it would have really increased my acct because it looks like as of now spx will open tomorrow somewhere within. i was too greedy. next month, there is always next month. this is a difficult game but i don't think i want to do any thing else.
But why do you want to faff around with this sort of crap when you could be scalping outrights or soemthing instead?
These last 2 weeks' price action contain the widely known "Cohodas market fractal", a favorite amongst spread traders that can call direction and execute properly. The name of the fractal has changed many times over the years with the comers and goers.
bump. The only thing more awesome than getting your ass handed to you on spreads is the only slightly sarcastic banter from the usual suspects, you all tried to warn him.............though he should give an accounting update. Does he realize everyone who is poking fun has been there one way or another, raise your hand if you never had any drawdown. Howard giving each other shit is how option cats operate, that said you can still learn alot on this site, good trading.
i love the mental torment, ha. i've been successful with credit spreads overall but i am very active in trading these. i was hangin on too much, got greedy, and knew i should have closed on monday morning (especially after the fact). can you elaborate with your post. i am open to learning new trade ideas. thanks.
with the otm payout's there is zero chance of making any kind of living. i don't care what back test you have done or if you have run this for what you think is a long time. even if you dodge some bullets; you'll never make a sustainable living. as mentioned earlier we have all been there, hence the passion. also it is extremely ethical of us to say don't do these spreads imo. if you still are determined to do these, maybe trade directionally near atm with 5 pt spreads..but even those require good directional skills. howard, where are you?