Interim update Sept 30, 2021

[LoriPrecisely]

YD, definitely, one of your top 10 advice comments since I have joined.

@ExcelNinja: thanks - I talk a lot of smack, but I guess occasionally something rings true.

Btw, a retraction of sorts - for Spinning The Wheel, I've begun using them Greeks!

The delta stuff ... been making a lot mo' $$$ that way, lol.

Do you use delta as a percent chance of the stock price moving to your strike price?

[LoriPrecisely]

Process the data? For what, exactly?
I was doing much better by guessing than I am now by following the forecasting based on data. I completely changed my strategy because of the forecasting, and I am deeply underwater now.

No stress no panic, keep cool, lady. You are underwater NOW, but the future will be bright, you will see the sun again.

If you mostly sold covered calls or puts, you will be fine in the long run.

Sorry for the long ramble. Usually my posts are short and sweet

Thank you, Stefk, your words sent peace to my soul. I just recently read a book called, "The Silva Mind Control Method", which says to count backwards from 100 in order to enter the alpha brain wave state. It works. But, then he says to visualize a picture in front of you about 6 feet, with eyes closed. I just cannot see anything at all.

Cinnamon: Nice name!! Thank you for the ramble.
It is good to hear your experience and wisdom.

I do have some Puts which I keep rolling out because they are so deep in the money. I ended up buying to close my covered calls because I thought we were heading into a rally, and my goal was to sell my shares to be all in cash for the next downward leg.
I also got assigned a Put on Margin 2 weeks before expiration, before I had a chance to roll it out.
I also bought several calls, which are worth virtually nothing right now.
I have wasted thousands of dollars preparing for a rally. It actually took me about 2-3 weeks to get out of the zone I was in, and to shift my perspective and my game plan. Lesson learned!!

[spark]

@Sol - I appreciate the clarification on puts and lots, very helpful.

And @LoriPrecisely, your comments are thoughtful and eye-opening.

Thank you Both!

[symbios]

Just to chip in, there are various factors in the market we can not control nor predict reliably. For example, the short term direction. The ones we can control are the size of our positions, margin to deploy and what trades to take. I have given up on predicting where the stock market will go in the short term. Instead, I have concentrated in the factors I can control.

TI has done a good job illustrating how we should approach portfolio management. It’s been mentioned a lot by others but TI really put forth a great way to manage our position sizing at least for me though I divided my capital into more than what was suggested. As for margin, it should be reserved for crashes. Not for ordinary times. Without using margin, we can stomach deeper downturns. Regarding trade selection, I used to take whatever trades mentioned. I have stopped doing that and only take “green” trades. There are simply too many opportunities to participate in especially if you have subscribed to 2 or 3 TI services..

[Yodean]

*****

A cheerful chart given current sentiment ... equities to the moon, baby!

[Yodean]

Do you use delta as a percent chance of the stock price moving to your strike price?

Pretty much. So for SCC I generally aim for delta < 0.30 and that 30 to 45 day expiration period. Likewise for SCP, if I am aiming just to collect premiums. I think ExcelNinja's posted quite a bit on this type of strategy.

If there's a spike down in a stock that I want to own at that price, I'll SCP with strike ITM (or very close), or just buy the shares outright.

The advantage of buying the shares outright during a spike down in a stock you really like is by doing so, you own the shares right away and can start SCC'ing it as soon as it goes back up, likely the next day or so. If you SCP it, you get the premium, but may never get the shares put into your account.

Sometimes during a spike down in an asset I really like (e.g. URNM), I'll buy shares and also simultaneously SCP it.

[nicolas]

I like trading in the market, I think it is fun.
I just have to keep learning how to do it properly.

Lori, I can recommend Trading in the Zone by Mark Douglas.
This one isn't about any particular trading system, it's all about the attitude and discipline that leads to consistency.
One of the many takeaways is that when you think probabilistically, you don't need to know what the market is going to do to make money.

My goal is to find a simple and systematic trading system that works for me, with 10-20% of my portfolio allocated to it. I recently finished this book and it helped me see clearly what I need to do before going live (and avoid the common and painful experience of blowing up several times before learning my lesson!)

The Market Wizards series is also helpful to realize there are thousands of ways to make serious money in the markets, and one isn't better than the others, but one will be the most suitable for you. I found Unknown Market Wizards particularly inspiring as it's easier to relate to these traders than to hedge fund legends.

[Eric]

A cheerful chart given current sentiment ... equities to the moon, baby!

There's a first time for everything!

[harryg]

I have an idea.

We can arrange a massive fight, and whoever wins is declared the best trader!

Sol, if you could start arranging this please as I just know everyone is going to be up for this!

Well, seeing you were a boxer once, I will let you spot for me, and as Harry's word is law, he can be the referee. now with the Jedi Jesus behind you, and with Harry as the Referee how could i possibly lose

However, in all seriousness, a mental spar is 10x more exhilarating for it takes a lot more skill (I think, could be wrong) to silence someone mentally than it does physically. The loser will have to sing a love song to Biden, Trudeau or Liz

Never flinch in the face of a challenge....



Ode to Liz

Oh Liz
You came out all manic
and caused some panic
you were much maligned
so you changed your mind
and the B of E
supported GBP
due to apprehensions
about people's pensions
Oh Liz
You've only been here
for a twelfth of a year
but in that time
you have undermined
your political sheen
and you killed the Queen.
In two days flat.
How 'bout that?
Oh Liz.

[MarkD]

fwiw

https://imgur.com/obzhVST

[Centeron631]

Finding the updates with selling prices and buying prices expressed in the market ranges kind of a nuisance or even useless in my tracking system which is rises above or falls below prices alerts with accompanying notes. My alert system does not allow for market index alerts for dow, nasdq, etc. Is there a way to translate the ranges into etf's or could TI consider that for each update as it would only have to be done once in each. eg. qqq, dia, spy?

[Yodean]

One of the many takeaways is that when you think probabilistically, you don't need to know what the market is going to do to make money.

Indeed, I try to do this as much as possible, and often fail. Try, try again.

Stanley Druckenmiller, considered by many in investing circles to be the GOAT when it comes to risk-adjusted CAGR, says that his specific economic predictions are often wrong, but the real challenge when it comes to investing/trading is to make money even when he is wrong about market direction.

He's been really, really good at this over the decades - being profitable even when his predictions are wrong.

Risk management is the single most important part of being a profitable, long-term investor/trader. I see risk management as "playing defense," while going long and short assets, etc., as "playing offense." But most find risk management "boring."

Offense gets the glory, but defense wins championships.

[Yodean]

*****

The centerpiece of the debt-based global financial system: King USD. For me, every financial analysis starts and ends with the USD atm.

[SOL]

fwiw

https://imgur.com/obzhVST

I think you might have to explain to newcomers what your charts are stating

[SOL]

This one isn't about any particular trading system, it's all about the attitude and discipline that leads to consistency.
One of the many takeaways is that when you think probabilistically, you don't need to know what the market is going to do to make money.

My goal is to find a simple and systematic trading system that works for me, with 10-20% of my portfolio allocated to it. I recently finished this book and it helped me see clearly what I need to do before going live (and avoid the common and painful experience of blowing up several times before learning my lesson!)

The Market Wizards series is also helpful to realize there are thousands of ways to make serious money in the markets, and one isn't better than the others, but one will be the most suitable for you. I found Unknown Market Wizards particularly inspiring as it's easier to relate to these traders than to hedge fund legends.

Nicolas, you probably have more than seven parts of logic as you tend to view things in a different but rather interesting to strategic manner. There is an easy way to increase your odds of winning; if done properly, accuracy is over 80%. However, the rub is that most won't be able to do it as it takes patience and then discipline. So here goes.

Choose a minimum of two indicators and a MAX of three. Use only long-term charts. Now understand what extremely oversold and overbought is. After that, understand what insanely oversold and overbought is. Once you have done that, you only buy when the two major indices of your choice are trading in the extremely oversold ranges and sell the position when the TA indicators trading close to the extremely overbought ranges. Then sit and wait. You might have to wait for one year for the next move, hence the need for patience. Most will fail because they won't have the patience to wait for the next cycle and if in between cycles you have to wait for the next cycle to start.

If you want specific examples just ask I will put up charts to illustrate my point