Home > Technical Topics > Strategy Development > Trading Strategy for Black Swan?

Trading Strategy for Black Swan?

  1. Anyone care to share their favorite strategy for a black swan? I was thinking about selling leaps for the higher premium.
  2. Try to sit on my hands as much as possible and wait until xyz regains a moving average before getting in.
  3. What black swan?
  5. same as was for the white..
  6. you missed it man!
  7. Not sure everyone uses the same definition for black swans. However, statistically, most of the largest one-day price falls on the Dow have come out of downtrends, not out of bull markets. I am exclusively trend-following and I try to be in and following as many trends as possible. The EUR/CHF crash in 2015 would have met my criteria for a downtrend and its the regret of my life I wasn't short that day.
  8. Black swan? What was yesterday, like 4%?

    Nothing changed yesterday except some rebalancing of trader/investor views of the market. In other words, some people learned that the market also goes down - and it can happen swiftly.

    Fundamentally everything is the same as it was two weeks ago. We didn't learn that Apple is really broke...the Fed didn't raise rates 100bp...We didn't just post a huge surprise negative GDP number.... This is a healthy and necessary function of equity markets.

    And for what we do, it can create some significant opportunities. Lots of people wait years for this kind of volatility.
  9. Who is doing all the selling? It's not just US markets, it is triggered across the world. Did the worlds 1% wealthiest call each other and say "sell"
  10. It was certainly black-swan event for XIV
  11. Forget buy and hold.
  12. the black swan for the trader is when his method stops working and the only strategy left for him is to stop trading :)

    other than that trader should continue to trade the way his method dictates regardless of what happens on market
  13. By definition a black swan refers to an experience where your system cannot deal with it. For a trend trader a black swan would be markets that don't go anywhere over an extended time. For a counter trend trader it would be a large trend.