5 Strategies they love
5 Strategies they hate
5 Strategies they want to use more
1. Define your Primary Strategies in your business. Settle in on 4-8 strategies and use these 80-90% of the time.
~ What is the overriding philosophy?
Why would you use this trade? What is it about the construction that makes sense with the current market conditions. Does it benefit from volatility rising or falling? Is it bullish bearish or neutral? What stocks do you search for to use this strategy with?
~ How do you construct the trade?
When getting into a position you should have a detailed outline (guideline) on what strikes, months, deltas etc etc that you will use when putting on that trade. You also should know approximately what percentage of your account you're willing to commit in margin or debit in the positions. I generally recommend a 1-4% range (depends on the size of the account).
~ When will you get out? Time, Price and Volatility.
I set target orders for almost all of my trades. Use risk graphs to factor in time passing (default at 3 weeks). Implied volatility changing, and the price range. You also must know when you're going to get out if it doesn't work. I love models that can focus on things like delta and breakeven points. I rarely would rely on a simple read of a chart.
If you have any questions please contact me at justice.tim@gmail.com
Thanks,
Tim
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