Trading as an art form

Opportunity is not equally distributed - some Dates pack more punch than others.

- Dustin posted "My top 20 trades this year account for >70% of my year."
No expectations that you'd spill the beans regarding what dates those were.

Generally speaking...
- guru posted "today was the end of monthly options expiration"

Question for those who DO this and make Money regularly - those who ain't on the porch so to speak.

What would the exceptional days have in common.
Are there situations that signal that a particular date is likely to pack more opportunity than an average day?
Weekly occurance? Monthly Occurance? Quarterly? News? Fiscal cycles? Announcements?

What Date based situations will cause a big dog to think "Due to "X" and "Y" or "Z" this date More than average will be one when I intend to be Tuned Up and Ready"?

 

It can be market breakouts (momentum trades SHOP ADBE), breakdowns (yesterday AAPL), unusual stock activity (GME, TSLA, PLTR, NIO, VIAC, CHK last year, SKT, FOSL, AMC, RKT etc). Lots of different style opportunities. Identify the opp, then make a trade plan. How to best leverage the idea? How to manage the risk? Where to add when it starts to work? What are you willing to lose on the idea in a worst-case scenario?

 

You mean unusual options activity? If not, what are you referring to?

 

The options price is obviously just a reflection of the stock price. His examples like GME and AMC is clearly abnormal and unusual movement. His reference to AAPL was a good one because as he said, it was the last holdout waiting to make a move south. So in a way, the odds are leaning on the side of a breakdown if the other tech stocks have already moved.

 

You got it.

 

Another question, Dustin. Are you mainly concentrating on long puts based on relative weakness while avoiding the call side? It would make sense because of implied volatility crush if you try to catch a breakout or a bounce. Or am I over thinking it?

 

I think after watching the LL2 and tape after twenty five plus years on the same stocks like AAPL and MSFT, they are like extensions of the body unless some unknown hits.

 

Will you give us an update today Dustin? Since you believed the drop will continue into this week, were you positioned for it? Of course if you're just trading the RTH session, it makes it difficult to go short after already such a big drop from Sunday, but there clearly was still more down side. Just curious how today worked out for you.

 

I play both sides, there have been some great long breakouts the past year.

 

Having a gap down Monday is the worst-case scenario for me since everything expired on Friday. I barely traded today, and ended up slightly red on the day. There just wasn't much to do.