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DAX WEEKLY OPTIONS SET AND FORGET STRATEGY

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Hi Condor 

 

Since 10050   this has droped 230 pips , your premium was 140 pips  , so  not bad .

Not bad   if you can follow systems

 

I wanted to  enter at   9850   , but the market  did not look weak yesterday , so  I moved my fill to 9906 :.Looking at charts can be deceiving=  just close charts and do not look at  screen

 

and I wanted to buy 9800 and  9900 puts in another part of the strategy  , but  the market did not look weak , so I did not

 

The main issue is  the ability to follow system  , without deviation  to the game plan.:womanlol:

 

https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=plan%20the%20trade%20trade%20the%20plan

 

:

 

http://www.fxfisherman.com/forums/forex-metatrader/tutorials-tips-tricks/13519-why-traders-cant-follow-systems.html

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This week the market taught me 

 

you don't know what the price will do , taking profits  by reading charts  or entering trades , does it really work/

 

Just following this system blindly made more ticks    100 ticks   ( reading charts it made zero):mansad:

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Right  Ive seen this happen in demo mode - the straight put is massively in the money - but who knew!  I followed the strategy on my demo cfd account can't believe the numbers involved i.e. margin and P&L  - Big!

 

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were you trading full contract  25 euros  a tick?

 

there are also 5 euros a tick and lower on spreadbet

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yes since it was DEMO mode i used full 25 to see how it went

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if option prices are 200   ticks  , the volatility can be 400  from low to high  , example    9850 straddle is 200  , so between  9650  to 10050 is   breakeven

 

 

9950  straddle was 180  beg of week  , profit below  9770   

 

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Depends on how good you are at reading charts and setting entries and exits I suppose and also what time frame you trade in.  For instance I am up 1121 points (5 position additive) on Brent Crude as I write, all stop protected at B/E and targeting at least another 170 points (X5).  I also have winning trades all stop protected at BE on GBPUSD; USDCAD; Dax and FTSE.  Now if the US markets will just get with the programme I'll have a clean sweep and all done with chart reading supported by key indices and resistance/support level analysis.

 

Guess it's horses for courses.

 

 

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 maybe i'm being dumb but when you  write 'stop protected at B/E' what do you mean?

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No sorry, habit of using acronyms to shorten posts.  B/E means break even.  It means I have moved my original stops (placed at a point I had analysed as valid within the context of the price action and within my maximum at risk amount) to close me out for no loss and no gain.  I do this regularly when the market has moved to a point which has proved the direction of travel forecast by my analysis.  At this point I can concentrate on exit points and long term trend (or reversal) potential free of any concern over making a loss, it is psychologically a good place to be in as it also means you can add more trades when you are at B/E as you total at risk should never be in excess of your maximum acceptable on the whole of your account.

 

For example on Brent Crude, my current expectation is that this is a retrace of a strong counter trend rally with another leg up to go before a final leg down to the bottom of the market.  however I will continue to analyse the market movements day by day to see if this is right or something else is happening. 

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I like to call  my trades in advance and be humble :heart:See my live tradescalled in advance 

 

and learn from my mistakes

 

i been through all the trading educators  arsenal of  would be profits , could have made rofits  , after event claims of profits  and then a final sweet   kiss , "  i am superior trading eduator private message , would you like to buy a couse from delusionary profits maker ?It happened in all the top forums

 

Back to realityon this thread

 

150 pips higher  at 11100  was the system cash short   (11090  is accepted)  and long was   9810 , so system gave  at 9788  .312 pips  less 180 premium cost  = 132 ticks

 

Being humble  , I came out with 12 ticks  

 

Next week we try again to follow system

 

 

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Thanks  Doh of course! I was thinking a point on the chart, silly me.

 

 this has been really good exercise on the DAX (funny thing is I tried the same thing on the US Crude as well and just closed out a DEMO profit on the Put due to the big drop today.

 

I blew it in DEMO on the DAX trying to lock in profit - that was a big mistake - should have just let it run as you also discovered in Live.  Very informative - it does not negate the idea however as it worked just fine on Oil BUT it cleary depends on Volatility.  No Surprises there its a Long Straddle , or Long Strangle if you stagger the strike price either side of the index value when you put it on.

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I'm not sure I really follow any of that but I think you are saying that I am not humble enough (and not being realistic)?  Believe me I have had my fair share of humbling events in the markets that make fools of us all but I'm still standing, which is as good as I expect to ever be able to say.

 

In fact I normally do not communicate how well or badly my actual trading does (I prefer to focus conversations on the actual analysis), some people like to tell a forum how well they have done, few tell how badly but that is just human nature and an ego thing.  No, the only reason I highlighted this week's successes was to illustrate that trading using charts etc does work if you approach it in the right way, and by the way being humble (or at least not an over confident ego manic) does help matters.

 

You have a different trading method and a different psychology to me, not better or worse just different.  I wouldn't try to convert you to my way and don't want to be converted to any other way right now.

 

On this topic I have nothing further to add, good luck...

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condor  

 

you have to run your profits  , when the market is giving them  200 ticks plus (  do not try and guess  what the market is going to do  and deviate)

 

On monday do another demo straddle , post the trades in advance on this thread , and let us see if you can do it  , and follow the system.PLEASE DO POST THE TRADES IN ADVANCE HERE.

 

Take profit targets on cash is  200 pips /ticks    , so this week , that would have given us 400 ticks on the cash and  10 pips loss on the options

 

Looking forward to your positive  contribution .

 

 

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Condor

 

Don't take your profits at 200  

 

Run your  profits    till close of week  , do not use  these theories of   trading to reduce losses ,loss aversion or trading  not to lose .

 

By running your profits  (and not using 200 tick target) ,  the results over the last two years  , showed an amazing 50  %   increase in profits  , whereas b/e    reduced these by 33 %  of  100 %  = 67 %     and  50 %  of  67 %  = 33 %  = 100  %  when 67 +  33 %   added

 

If you want to read about phsychology ,loss aversion  , trading not to lose , trading to reduce losses    jus google search 

 

or read this  thread 

 

http://www.fxfisherman.com/forums/forex-metatrader/forex-beginners/16415-phsychology-100-all-traders-will-lose-11.html#post113702

 

https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=loss%20aversion%20cutting%20profits%20trading%20not%20to%20lose

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300 ticks is  a good profit target , 290 is acceptable , take profit of 290 is introduced

 

Backtests were done using weekly data  , but these  did not account   for  more than 1 move   to tagets   , and take profit of 300  

 

300 is optimal take profit  , and does not affect results.It is most likely to improve them.Last week's example    , the  first long at 9810  achieved 300 ticks   , but I did not close it at profit.If I had closed it at a profit of 300 , and run the short of 11050 for 300 ,the results would have been 600 profit less 180 option cost  =420 profit.The running profits to close on exiry  yielded 130 pips.There was one week last year , where the strategy made 3 runs of 300 pips  =900  , in a week.whereas backtests showed 263 pips This one one or two   tests  tell me  , that overall results will be better

 

This will eliminate  the phsychology issues of following scenario , where most humans  do not know how far price is going (so best to take large profits  and  /or run your profits

http://www.businessinsider.com/colin-camerer-wins-genius-grant-2013-9?IR=T

 

taking profit  by using options 

In order to eliminate cash and phsycholoical issues from the trading  , i suggest  initial cash position , then replaced , at a convenient time ,  using the following :

If call is in profit   by   300 (290/280)   sell call at strike 280  and buy put at same strike price , close cash

if put is in profit   by    300 pips   , sell  put at  strike 280 to 300    , and buy call at same strike  , close cash

This will make system as mechanical as possible  , without having to be infront of screen at expiry  time

all short puts and calls  should be covered 

 

 

as strategy  develops    further  , there will be  two weekly options and monthly options added  , but i g there are only one week's options , so may have to look for  other 

 

 

 

 

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here we go (ON DEMO) lets see....



the index was in the middle 9770-ish so I split the call above (9800) the put below(9700) which reduced cost

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I went for 9750 straddle for 217, premium is high  but stragey can absorb m, still  unusually high 

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I went for 9750 straddle for 217, premium is high  but stragey can absorb , still  unusually high 

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I put my sell at 9920  , 170 pips    , it missed by 15 ticks

 

I have now longed at 9631    the   cash 

 

I also have  9600 put  and  10,000  calls strangle

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CONDOR

 

The second part of the strategy is to lock away profit on put  , 150  ticks lower  with a cash buy  . and run the cash buy  for 300 ticks

The second part of the strategy is to lock away profit on put  , 150  ticks HIGHER  with a cash SELL  . and run the cash buy  for 300 ticks

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yesterday sold the 9500 put for 71 , against  the 9600 put  , leaving net risk on table at 110 pips

 

3 days to go

 

recap

 

straddle  9750  long   , long cash 9631  (31  pips early  entry)  9600

strangle  9600 and 10,000 puts and calls  long for 100 

 

premium 220+80 (strangle) -120 cash locked  away  -  71  

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ACTUAL RESULTS  

for last three weeks  are losses on straddle

 

2016.03.20                          -123.8

2016.03.27                    -113.1

2016.04.03                       -46

 

this week it has given  300 pips  profits   , recovering previous losses

 

The strangle  bough 150 pips higher  and lower  performed well

 

362.20

189.90

210.00

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This week started at 9550 

 

it is 10025  now

 

475  ticks higher

 

straddle cost was 200 ticks

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LAST WEEK IT MADE 304 PIPS 

 

THIS  WEEK IT IS MAKING  OVER 300PIPS PROFIT  , 

 

10,000  CALLSAND PUTSWERE 208 TO BUY  ,PRICE NOW  10511 

 

 

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