Bruce Bitner, a member of the Falde Trading community and part of the funded seed capital program, has done an excellent job of summarizing key stats for a basket of studies that he recently completed. Below, we’ll cover the benefits of summarizing this way — which makes for quick and easy reference as to the impact of changing different parameters in your strategies.
We also discuss a separate study of a very challenging period of time — and how our options strategy turn a terrible series of trades into breakeven results! That’s the type of thing we need to see so we can stay in business and be around to ride the profits during the easier seasons when they come along!
At the end is an awesome highlight from one of the mentoring journals received — where Ritu shared a big breakthrough momentum. Watch to the end and take note of this progress in one trader’s psychology.
See some highlighted slides here and then watch the recording below.
The above performance is trading SPY stock long and short on the 5-day channel (end of day to match up with historic options prices in the next chart)
I’ve scaled down the size of the SPY stock trades in the graph above. Otherwise the options trades just look like a flat line compared to the huge losses in the shares. This provides some context for the edge provided by options decay. This TERRIBLE series of directional trades ends slightly profitable after 5 years. Can you see the worse draw downs in the shares do impact the options market too. But the sideways to moderate losing periods have an upward drift in the options P/L.
The intent of this study is to “break” my edge. I tried very hard here to break this. See the post from three days ago to learn more about the early part of this study.
Video starts about 4 minutes in this time.
00:04:09 BruceB: yes
00:04:16 Kirk: yes
00:09:59 BruceB: 5yr studies
00:10:18 Chris: what is 40-60-40?
00:10:52 garyh: What is the trade???
00:11:33 garyh: got it
00:14:48 garyh: excellent stats. no profit target?
00:15:29 BruceB: 80% of spread was the profit target
00:15:47 BruceB: spread income that is
00:19:53 garyh: thanks Bruce
00:32:01 BruceB: Not seeing the ONE screen, still on presentation
00:32:31 Chris: Same… no ONE screen
00:33:23 garyh: 46-30-x
00:35:44 BruceB: Yes
00:35:46 Chris: yes
01:04:12 Chris: Disconnection
01:05:23 Chris: Focus on process and not outcome
01:06:50 Kirk: Thanks all!
01:07:00 RICH: Thanks