TJ Looked at your EUR on the larger time frame. It is going up, the dollar down. What does this mean? Market going UP tomorrow at the OPEN? Are there any sort of Spread calculators that would chart a divergence in the spread, of different time frames like a horizontal spread of different types? Free on the web?
Stanford That is fantastic! Can hardly believe it? I would think off hand with no experience you would lose your shirt and underwear. When you get done for this month. Give us the adjustments you made, cost in commissions and so forth for what adjustments you did and the effect on your end result. Be very interesting reading. Then I presume you are doing your 150% adjustment rule? Think that was premium, so I would be interested to see how that actually effected the spread cost you closed and the rollover premium cost you get when you reestablish it. Break it down with some detail please! Man o man, if you can do that during a month and come out with a winner, even if it is less is fantastic!!!
falconview, back around page 47 or so, I posted all of my positions and adjustmens for the month. That along with the recent ones I mentioned will give you the whole picture. Michael
And this is what I read about time and time again, a few winning months and you think you have it figured out. I know I dont, and will try everything not to fall into that trap. No real money for a long time! Michael
Stanford Ran across this in the internet. Thought you might like the reinforcement. _______________________________ 8 Keys To Success Here's a simple description of the plan we will use: Only place trades that have a 70% or higher probability of profit. No more 50/50 coin flips like in buying or shorting stocks. Never sell naked options. (Naked options have unlimited risk and I hate risk). Use my mathematical models and statistics to determine which options to sell and when. By using statistics and probabilities, my trading became scientific and systematic. No guesswork. No need to rely on technical analysis, candlesticks or any such thing. Always know before we place a trade, what our maximum loss, maximum profit, and adjustment points are. Always set up our adjustments points so that if a trade goes against us we can salvage the trade and still make money or get out at much less than the maximum loss. No Day Trading No futures - only stock indexes, ETFs and some less volatile stocks. Keep trades to a minimum to limit commissions and cherry pick the best trades available. Basically our goal is to make 10% a month on our money by selling time premium and keeping losses to an absolute minimum by doing only high probability trades and adjusting trades before they get into trouble. As you can tell, I am very conservative. ________________________________ Well I might look at it again in some future time. I'm really busy right now with this current system I'm trying. It has 2 to 4 trades a week, which is pretty intensive computer watching.
Stanford Whats this explanation with 150% of premium adjustments again? For the credit spread? You are using that right? I re-read your pge 47 but it is confusing and don't want to sit down and pick it apart. Probably easier to run an IRON CONDOR for a month and do the adjustments and see what happens, if you don't have any way of summarizing it TJ and Stanford The strategy I'm testing is long option and short opposing spread, then eliminate the frills and go long whenever the market takes off. I'm just finishing testing two debit spreads as a STRADDLE and doing the eliminating part. Same system, but a little more expensive. I see it will take me 3 index points to make money and cover the losses expense, which isn't bad if the direction stays good for long enough to get 3 points in the OEX. Essentially I'm learning the debit spread is like an appendix, sort of useless, but as insurance don't really know? I'm wondering if a straight STRADDLE long options wouldn't work better? Won't know until I try. This option calculator is helping me run the long options and figure it out faster, but cannot seem to find a spread calculator online.
This market continues to go up, but it is so small an increment, it is hard to see how you can make any money with a long option right now. The velocity and volatility is too narrow. I had IV of 17, on a spread this morning. The thing with a DEBIT spread, you can halt TIME DECAY if you want to go long, but not sure of direction. The difficulty is that the debit spread will lose money, but won't make any money, it is sort of on a par with the credit spread in a RISK to reward ratio. The only thing it is good for is sitting there while TIME DECAY would otherwise eat up a long option. I'm trying to sit there in a debit spread and then eliminate the frills and leave the long option for a directional move, if one should come. But nothing is coming? I cannot see how to make any money like this right now. Today is my start of legging into a credit spread on the weekly anyway.
falconview, I read someone say to close a position when the cost to do that is 150% of the credit you received. So say you have a position that gave you a dollar credit, once it would cost you $1.50 to close it, that is what you do. Then you can choose to go further out and put on another credit spread. So far that is what I have been doing. Time will tell how that works out. Michael
Stanford thanks on the info 50% over your received premium, ADJUST. The roll over, how far in strikes do you go?