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  2. @Kim @YowsterI had a position in NDX like the risk analysis chart shown below last night. This is a NDX triple calendar position with shorts expiring this AM and longs on Monday. I was debating whether to let the shorts expire or close before last night. Since it's a cash settled index there is no assignment risk and I have capital to cover the longs. What would be the wise thing to do since the price is fairly centered and have ~350 point range. I bailed out since I wasn't sure if the longs premium would collapse and would create more significant loss than what's shown. My expectation is that the index price would open with in the range of the tent and I would close the longs on Friday morning. Appreciate your comments. Yesterday the IV before closing was as below
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  6. Ringandpinion Official Thread

    Nope, gone now. The setting was at the default 40%. The thing that surprised me was that the affected cycles were eliminated on the VIX chart and not on the RV chart, I refreshed it and when it was still there I took the screenshots and sent them. Either way, it is gone now.
  7. Djtux Official Thread

    Are you sure you can still see that ? At what level does the VIX should get filtered ? Is it the default 40 ? I see the correct behavior :
  8. Ringandpinion Official Thread

    @DjtuxNot sure what to make of this, the RV chart includes the "excluded" VIX cycles but you can see they are excluded on the VIX chart.
  9. Kim

    Probability vs. Certainty Trap

    Yes, the stock market is very different from a coin flip. Stocks have certain patterns that repeat themselves, but again, it's only probability.
  10. vasis

    Probability vs. Certainty Trap

    Hi Kim, Thanks for sharing. Imagine, you are flipping a fair coin and you have 8 heads in a row: what would be a probability to get 9-th head? Do you think the stock market is different (has "memory")? If so, why?
  11. Was it the right conclusion? Is any losing trade necessarily a bad trade? The answer is no. No matter how well he executed his trade, there will be losing trades because we are playing a probability game. Trading is a business based on probability. And probability means that sometimes we get what we want, sometimes we don't. And that's the nature of the this business. The sooner we accept this, the better we can operate it as business. "There's a difference between knowing the path... and walking the path." - Morpheus The Certainty Trap I came across an excellent article by Ben Carlson from Ben discusses the differences between probability and certainty: "There are two arguments I see on a regular basis that show up as a result of data overload: …because that’s never happened before. …because that’s what’s always happened before. The problem with this line of thinking is that it can lead investors to fall into what I like to call the certainty trap. It’s this all-or-nothing line of thinking that causes so many to constantly attach extremes to every single market move or data point they see. The beginning of the recovery or the end of the world is always right around the corner. The assumption is that we’re always either at a top or a bottom when most of the time the markets are probably somewhere in the middle." If you are not a member yet, you can join our forum discussions for answers to all your options questions. Ben continues: The reason the investing certainty trap is so easy to fall for is because historical data can feel so safe and reassuring. Look here, my data says that this has never (always) happened in the past. Surely this trend will continue. I’ll just sit here and wait for my profits to start rolling in. ‘Never’ and ‘always’ have no place in the markets because no one really knows what’s going to happen next. ‘Most of the time’ is a much more reasonable goal, because nothing works forever and always in the markets. If it did everyone would simply invest that way. I think a much more levelheaded approach is to follow the Jason Zweig 10 word investment philosophy: Anything is possible, and the unexpected is inevitable. Proceed accordingly. To disregard the potential for the unexpected is the height of arrogance and arrogance is rarely rewarded for long in the ever-changing markets. Don’t get me wrong, I’m not saying you shouldn’t take on high probability bets based on the weight of historical evidence and your current views. That’s exactly what you should do. But probabilities take into account the fact that there’s always the possibility that we might see the minority situation occur. In fact the best you can hope for is a high probability for success because luck plays such a large role in shaping the outcomes in the markets. I’ve always liked the old adage that it’s better to be roughly right than precisely wrong. My feeling has always been that historical data is a great way to view the inherently risky nature of the markets, but that doesn’t mean the data always does a great job at predicting exactly what’s going to happen in the future. Investors have to remember that market data does a much better job of forecasting potential risk than it does potential return. There are no certainties in the markets. Otherwise there would be no such thing as risk. Nothing works all the time. Otherwise it would never work in the first place. There’s no room for ‘never’ or ‘always’ in the financial markets. Otherwise you’re sure to be surprised in the future." Excellent analysis. It is very important to understand the difference between probability and certainty. Nothing is certain in the trading. But if something happened 80% of the time, there is a good chance it will happened again. For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle. Again, there is no certainty that it will happen, only probability. But this is the best we can do. Related articles: Why Retail Investors Lose Money In The Stock Market Are You Ready For The Learning Curve? Can you double your account every six months? Are You Following "Tharp Think" Rules? Adaptability And Discipline Want to learn how to reduce risk and put probabilities in your favor? Start Your Free Trial
  12. canary

    Does 80/20 rule apply to trading?

    Fixed!!. At least I can see them. Congrats for the work.
  13. Bullfighter

    Does 80/20 rule apply to trading?

    same here. Sorry, I guess I did something wrong. It should be fixed now!
  14. kg200004

    Does 80/20 rule apply to trading?

    Thank you @Bullfighter for the comprehensive data analysis. By the way, the equity curve images you posted aren't visible for some reason.
  15. Bullfighter

    Does 80/20 rule apply to trading?

    Yes, it's not only the returns, but the volatility of your equity curve that matters, or how much you suffer along the way. I decided to put together some equity curves, assuming that on day 1 we have $10000 and then I execute only calendars, and repeated that with strangles, straddles, hedged Straddles, RICs, calendars and straddles together, and the whole set of SO trades. The first thing you will notice is that calendars on their own are great, probably because they tend to start half size. Strangles started strong but have been just doing nothing Straddles are slow and steady, rarely producing big drawdowns. Hedged straddles joined the party rather late, so it may be too soon to say if the current chop if the curve will remain so RICs really had to go Once you start combining, the curve starts smoothing. This is just calendars and straddles: The combination of great, good, and not so good strategies, having their successes and failures along the way, really smoothed the equity curve of SO: This shows why SO has such a high Sharpe ratio. I am glad I discovered SO! Excited to learn all these strategies!
  16. Kim

    Does 80/20 rule apply to trading?

    Thanks for putting this together @Bullfighter Your conclusions are in line with statistics put together by @Yowster every year - 2020 Year End Performance by Trade Type. It is true that calendars are historically our best performers, but they are also higher risk than straddles. We prefer to trade both to hedge and balance our portfolio.
  17. Bullfighter

    Does 80/20 rule apply to trading?

    I have put all the SO Trades from the Performance page into a spreadsheet and calculated the following: About half the money made by the model SO trades comes from calendars, and about 80% are a combination of calendars, strangles and straddles. Things are more distributed by tickers, but you can see GOOGL is a favorite money maker Now, how much is it because some strategies are traded more often and when because that strategy is more profitable? Since all trades are sized in proportion to a 10K portfolio, I thought that to truly compare apples to apples we have to look at dollar returns: Calendars are not only traded the most often, but they have a pretty decent average return based on the standard allocation. Straddles are the most traded strategy, it lasts 5 days on average, but the average return is $29. Hedged straddles improve returns at the expense of almost twice the days in trade. More visually: These calendars are truly great!
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  19. t'pee Official Thread

    Thanks @Djtux for these enhancements and hope to see median/average and years added too per Yowsters suggestion. I think this may have been suggested before but would a dual check on both straddle and calendar be possible/realistic even if say it was a simplified script without all the bells and whistles just the RV chart ?
  20. Djtux Official Thread

    You are right, it was bugged, it should be fixed now.
  21. arcadianskies Official Thread

    Sorry to bother you again Djtux. When I uncheck the “Enable cycles filter based on VIX” box in settings, the black median/average line disappears. Thank you in advance.
  22. @Christof+ can you give me a short trial for the website please? Thanks Samico.
  23. Yowster Official Thread

    Yes, years will probably work better than start date.
  24. Djtux Official Thread

    For the start date, I prefer to give the option to set a number of years. For example between 1 and 5 years. Would that fit the need or you need something else ? The reason why I don't want to set a hardcoded date is that I want to leave the option to purge old data in the future if I don't need to maintain it. I don't plan to, but I want to keep the option say in 10 years so that I don't have to carry a huge database cost for "nothing".
  25. Djtux Official Thread

    That should be fixed. That should be fixed as well.
  26. Kim

    Leveraged Anchor 2020 Year In Review

    The Anchor strategy was featured by here and here.
  27. Ringandpinion Official Thread

    @Djtux I almost hate to mention it since this is a nice mod to the site, but it doesn't filter the high VIX cycles for me. Possibly because I have "colorblind pallete" enabled? Then again, you might be working on the site right now.
  28. Yowster Official Thread

    @DjtuxThanks for the VIX filter to exclude cycles, good enhancement. Now that the "settings" profile is there, a few more suggestions for things to add (hopefully simple ones): Start Date Average or Median
  29. arcadianskies Official Thread

    Thanks for adding the “filter cycles by VIX’ feature to the settings. Whether or not I check the box “Enable cycles filter based on VIX”, it still filters out cycles > 40. To get around this, I can check the “Enable cycles” box and put 100 in the “Filter cycles” box and the chart will include all cycles on the chart. Please take a look at this when you get a chance. Thank you.
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