Xflat, if you honestly think my link to and discussion of, the L-T chart on CB is somehow a part of the probability calculation under discussion, you can continue your silly discussion without me. It's clear and obvious that I was making a point that many subjective variables determine the likeihood of a trade being profitable. And one of those variables is tech analysis and downside tech support. I can see where this discussion his heading, so I'm done with it. Putz Master
You clearly say here that you believe subjective items should be part of probability calculations. "In terms of evaluating "probability of profit", I think one should also consider the downside tech support CB has demonstrated in the $35 area,... per the 1 year chart below. You need to go back 5 years to see the last time CB tested the $35 area. http://finance.yahoo.com/q/bc?s=CB&t=1y&l=on&z=m&q=b&c= Putz Master" Shocking you cant even be honest after seeing what you already posted.
Since atticus and xlfat have decided to change and twist the issue, formulas, context, ect... being discussed, I'll just leave it there. Lets consider the discussion over. Putz Master
Ha, how did I miss this? HTF do I define "tech support"? I don't see any inputs in Bjerksund or binomial for "tech support".
LOL and you wont because those are subjective opinions Every single thread PM starts or posts on ends the same way. His irrational logic combined with him denying that irrationality. Every single thread he posts on in every single message forum he infests ends the same exact way.
Use of T/A for evaluating potential trade: Xflat and atticus have made it clear, they do not use T/A as part of their analysis of potential trades, and it has no bearing on their evaluation of whether a trade under consideration is likely to be profitable. They do not use it to assist in the selection of a strike price, even if the goal of their trade, is for the stock to remain above a particular price. They believe strike price selection and the use of T/A to assist in the selection of strike price, has no bearing on the likelihood of a trade being profitable. In fact, they actually ridicule the very idea. Previously tested L-T tech support is one of the variables I consider, prior to initiaiting a trade. I evaluate all variables when considering the "probability of a trade being profitable". We are all making a "calculated risk" prior to risking our cash. All variables are part of that "calculation".... either directly or indirectly. I already know what atticus and xflat think. There's no need for them to reply. Putz Master
None of your subjective measures has any influence on the calculation of probability. Thats what I have said all along. I dont care about how your subjective opinions influence your selection of strikes in your simple credit spreads.
"I can see where this discussion his heading, so I'm done with it. Putz Master" "Lets consider the discussion over. Putz Master" Guess not huh?
Nothing wrong with trading volatility, if that's your comfort zone. I'm looking into it myself. Currently my comfort zone is neutralizing as many variables as possible, of which volatility is one, and simply making a bet on stocks not dropping below a certain price per unit of time,... while allowing time decay to increase the value of my trade. Nothing wrong with that either. The main downside to my current strategy, is the more otm a stock is trading, relative to my T/A selected strikes, the worse my R/R ratio. On the other hand, the worse my R/R ratio, because the stock is deep otm and my strikes are at downside tech support, the higher the probability of the trade being profitable. Until I become more comfortable with alternate strategies, my main focus is to improve my R/R ratios without significantly lowering my trades probability of being successful. Gotta work on that blend. As for evaluating the probability of a potential trade becoming profitable,... while T/A is obviously not part of any "probability equation", it remains a significant criteria and variable I consider, when evaluating the probability of a trade being a profitable one. Others are free to disagree. And still others are free to distort the "context" of my probability comments. But they are only fooling the fools. Putz Master