It blows up every 50 points of market movement except instead of taking the full $12,500 hit on the chin your losses are offset by your options hedge and scalping profits. Trade sequences without oscillations are about your worse case, ie. a straight 50 point nose dive earns little in scalping profits. You have exposure unwinding positions overnight. You take occasional losses but shouldn't blow out your account.
I'm gonna do some calculations and post back in this thread tomorrow to make sure I'm understanding this correctly.
What a fund (or a very large fund) may do, in both strategy and tactics, is likely to be different from what is best for an individual trader. Thus in my posts you will find me often referring to the individual trader because of the need for this distinction. To add to a losing position is an unwise diversion for the individual trader. Why? Firstly the individual trader is either starting with or is trading with limited capital. Secondly the most effective use of time for an individual player is to acrrue net profits day on day (using volatile and liquid futures markets). This precludes running an accumulating losing position.
all trades are initially losers,you are born a winner, you cry ,you fight,you grow, when your'e 1 year old ,you do pushups all day long and rock til you can walk, a trade faces nothing but adversity, you see a market and u trade it, you build a position, and you close it for a profit when it will go no further, long or short you hold it til you meet your target, u have a spot where it says u were wrong,... IT says,.... NOT your acct, you position your size around this nullifier, iif it's nullified you take a loss, it's all about the if it goes here,not where u got in
It's entirely possible that he put that up there to mislead people cuz he knew his pic was gonna be taken. I've heard similar claims made about other "successful" traders teaching methods that are specifically different from how they actually trade.
Taking PTJ's character into consideration, I don't think he is the type to mislead others. Knowing that he founded Robin Hood Foundation gave me a sense that he is a genuine nice guy who wanted to make the society a better place. Obviously he won't teach us how to trade, but he would try to prevent us from destroying our lives.