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yalgaar

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Take it from an old guy that isn't accustomed to posting on a forum as a form of communication.  If this group were sitting around in a room having this debate, the body language would most likely change everybody's experience to a more friendly character.  A lot can be said with a smile or comic roll of the eyes to take the sting out of words that are true or not.  When it is in this form, it just gets mean.  I love to argue, my wife says that I would be fine arguing with myself, a mirror and a tape recorder.  I don't mean ill to anybody here, if we were in person, I would be hopping up and down, shouting and smiling, and probably buying the beer.  These forums are great for communication, but they aren't very good for empathy.  Body language is a bigger part of our world than a lot of people think.

Edited by Ringandpinion

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1 minute ago, Ringandpinion said:

Take it from an old guy that isn't accustomed to posting on a forum as a form of communication.  I this group were sitting around in a room having this debate, the body language would most likely change everybody's experience to a more friendly character.  A lot can be said with a smile or comic roll of the eyes to take the sting out of words that are true or not.  When it is in this form, it just gets mean.  I love to argue, my wife says that I would be fine arguing with myself, a mirror and a tape recorder.  I don't mean ill to anybody here, if we were in person, I would be hopping up and down, shouting and smiling, and probably buying the beer.  These forums are great for communication, but they aren't very good for empathy.  Body language is a bigger part of our world than a lot of people think.

Very well said @Ringandpinion

I am sure going to grab a beer in a few! Cheers to you! 🙂

Maybe we should have zoom meeting setup and talk about these things. I am sure a lot of things that has been said the way it was said about be quite different and would beinterpretedd in a more positive way.

 

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On 8/18/2020 at 5:51 PM, Tniko said:

I absolutely agree with you and I am sorry for appearing as the bad person that sours the soup here. But I cannot help but have a bitter laugh everytime I get the newsletter with the “due to strong demand the service will be soon closed for new members”. Every other month. And then I read this post about this guy having the exact same experience. So I am sharing my opinion which of course is directed only to people being in similar positions. To all other happy Kim followers I am wishing all the best...

Since you continue spreading misinformation, I feel I have to address it.

We close the service every few months in order to limit the number of members and provide the best service to existing members. I challenge you to find another service provider who is willing to sacrifice his income in order to provide a better experience for his members.

We re open the service because members cancel. And they cancel for different reasons (new job, too busy, too lazy, family reasons, wrong expectations etc.), and simply because as others mentioned, there is no perfect product and there are always happy clients and not so happy clients. This is the truth. So we have to find a balance between limiting the number of members, but still allowing new people to benefit from what we provide and have a "new blood".

Of course there is no way to satisfy everyone, and even when you do all you can for your members, some people still accuse you in hidden motives and "smart marketing". If you consider 1-2 updates per month "smart marketing, I suggest you use the "Unsubscribe" button at the bottom of each email.

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I am a relative new member here and see this service for what it is, an educational course with live trades examples and the ability to discuss them with a like minded community. I don't expect or frankly care to perform as well or the same as the official returns, for the most part I don't even enter official trades unless it fits with my own strategy.  Or the sectors/symbols that I like investing in and a myriad of other factors. So far, I learned a great deal directly and indirectly from SO and see a good ROI from both trades and knowledge accumulation.

@Tniko the truth, is that about 90% of options traders will either breakeven or lose money. 9% will make profits within 1/2 a standard deviation from just holding long term S&P index and the top 1% will consistently beat yearly returns. The same applies to any competitive sport or business, 90% will give up and stop playing, 9% will be considered average or good players and the top 1% the pro athletes will thrive. The copy and paste approach doesn't work for options... there are no shortcuts. Don't expect to look or learn how a marathon runner is running and expect to be able to run the marathon faster or even at the same pace. A person search for a one solution fix all or the "holy grail" is futile, there is no such a thing. The only thing that works is hard work, dedication and continuous learning. Every athlete will tell you the same. 

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8 minutes ago, yalgaar said:

@Kim

I am not new to trading nor to Options trading. I just didn't find a way to consistently profit from what I have been doing all these years. I have a very long background in risk management and position sizing due to my Forex trading experience. I just feel intentionally or not the official trade performance page just suggests same/similar or better performance can be achieved by the members and still being suggested. But that is really far from truth due to many reasons. I am not criticizing you personally, I am just stating my experience here so far. I have sure learnt a lot and still intend to learn much more from here as time permit me from my super crazy schedule. All I ask is better disclaimers so no new members get a false expectations like me. 

I also think some improvements can be made in the current format. I will put something together as soon as I get more time. I mean I notice there are many many questions just being repeated from many members including me about why certain trade was taken in certain way. I believe this is due to the some of the pages where the original strategy is described is either outdated or needs more details. Even thought it has been described very well but due to the dynamics and complexities of each trade, it sure needs improvements.

Thank you @yalgaar You are more than welcome to suggest concrete changes and improvements to the service format.

As for expectations - I believe that anyone who takes few minutes to read the service description can see that we are being as open and transparent as possible. As you could see from some of the comments, there are members that actually achieve similar performance, but we never said it would be easy. We could have much more members by doing "clever marketing" and promise what other services promise, but we will never do it.

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7 minutes ago, swsam said:

 

@Tniko the truth, is that about 90% of options traders will either breakeven or lose money. 9% will make profits within 1/2 a standard deviation from just holding long term S&P index and the top 1% will consistently beat yearly returns. The same applies to any competitive sport or business, 90% will give up and stop playing, 9% will be considered average or good players and the top 1% the pro athletes will thrive. The copy and paste approach doesn't work for options... there are no shortcuts. Don't expect to look or learn how a marathon runner is running and expect to be able to run the marathon faster or even at the same pace. A person search for a one solution fix all or the "holy grail" is futile, there is no such a thing. The only thing that works is hard work, dedication and continuous learning. Every athlete will tell you the same. 

Couldn't say it better. For some reason people get insulted when I compare trading to engineering or medicine, but the truth is there is no difference.In fact, trading is more difficult. If you are good in engineering, you are most probably will be successful. In trading no matter how good you are, there still will be periods of losing streaks or low returns.

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22 minutes ago, Kim said:

We close the service every few months in order to limit the number of members and provide the best service to existing members. I challenge you to find another service provider who is willing to sacrifice his income in order to provide a better experience for his members.

Great respect if this is the case. But this is also a smart business decision for longevity in any business.

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16 minutes ago, yalgaar said:

Great respect if this is the case. But this is also a smart business decision for longevity in any business.

We were always very transparent and open about the reasons why we are closing.

As for longevity in any business, I invite you to read Performance Reporting: The Myths And The Reality article. One of the examples was a service bragging about ~42% average return per trade. A quick look on his website reveals how they calculate returns: "The highest price the option achieves is recorded as the result since this was historically what the option price reached." Is anyone really able consistently to sell at the highest price the option was trading during its lifetime, or even close? Turns out that based on real (auto-trading), not hypothetical results, not only the performance was not nowhere near 42% average return, but the service was actually not profitable.

This service has been in business for 20+ years. They are proving year after year that Abraham Lincoln was wrong when he said "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time." 

There are hundreds of services that completely and brutally mislead potential members about their performance. So you have to excuse me for getting really offended when someone says that our "marketing" is misleading.

 

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11 minutes ago, Kim said:

There are hundreds of services that completely and brutally mislead potential members about their performance. So you have to excuse me for getting really offended when someone says that our "marketing" is misleading.

100% agree on that. I have witnessed several of them myself. I was super skeptical about SO as well for many reasons but everything checked out fine for me. I still would like to make similar performance as official Trades. I do know I have the aptitude for it. I just need to to a better job to ask better question which I will going forward. 

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11 minutes ago, QuickNick said:

The one caveat I can think of is to burden Kim or Yowster with any more tasks than they already have.  I think we should all try to help them stay as focused on trading and advanced discussions as possible.  

I am amazed at the time that @Yowster and @Kim spend just explaining things to use, I agree this should have a minimal impact on their time.  But I don't want to volunteer those others mentioned either.  I don't think I would like to be the one that everybody is watching over their shoulder.

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3 hours ago, Tniko said:

This guy claims to make 120% per year but I need to deduct commissions and the “level of experience”, ok, that should still leave me with a handsome return, right? Wrong, the avg of +6% per trade turns quickly to -2% and if you multiply by the number of trades you reach very fast -20% on total portfolio or worse...

Pretty bold statement in the current era of minimal or zero commission trading.... I find your statement extremely hard to believe with the current low fee brokerage environment.

 

3 hours ago, Tniko said:

“wonder“ calendars with 30-40% return which never get filled in the real world. 

There are quite a few SO members who have become very proficient and getting in and out of calendar trades, with some gains around these percentages.   I sure they can chime in with results, but I can guarantee you that many people at times make gains like these on their own calendar trades.

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On 8/18/2020 at 7:15 PM, QuickNick said:

@yalgaar  I think Zoom calls are a GREAT idea.  It would awesome to communicate in that format.  Maybe we could watch how experts like @rasar @TrustyJules @gf58 @FrankTheTank @krisbee  @Djtux @Stanislav  @zxcv64 @mccoyb53  go about trading options. 

The one caveat I can think of is to burden Kim or Yowster with any more tasks than they already have.  I think we should all try to help them stay as focused on trading and advanced discussions as possible.  

I dont think I should be listed with those guys but I am glad to be pinged on this topic because I have something I wanted to share that is relevant here.  I finally figured out how to find an equity curve in my TD Ameritrade Account (can only do it on mobile for some reason).   @yalgaar this should be interesting for you because I was in your shoes about 18 months ago and saying the same thing (but just quietly to myself).   

With reference to the equity chart below (this is mostly earnings and SO trades, I also have an account at RH and two other TD Ameritrade accounts but this one is a good example of my journey)

Point (1) I joined SO in the summer of 2018 and had a string of really bad trades (many were my fault, chasing losing trades, over trading, etc.).  I just could not make it work.   We also had some big 100% losses, HD and GS come to mind, plus a few others where I had on large positions.  If I remember correctly this was a rough patch for SO and I joined at the peak and gave up near the bottom.   

Point (2) I quit SO for the first time somewhere around there, convinced myself it did not work.

Between point (2) and (3) I tried a bunch of other options services and continued to lose money.   I started to take it more seriously.  I turned off my computer, read a bunch of options books, academic papers, and started to really think deeply about options, the greeks, what works, what doesnt work, and tried to figure out why.   I kept coming back to SO and earnings trades.  It was like an itch I could not quite scratch or figure out in my brain.  In my opinion the IV rise before earnings is a consistent edge that we can take advantage of as retail traders.  I know the results Kim and Yowster got were real (we can see their trade logs) so I started thinking really hard about that and how to exploit it.  I found some of Kim's old articles on Seeking Alpha which laid it all out very clearly about getting your straddles for "nearly free" or something like that and it started to click for me and the light bulbs started going off. 

Point (3) I started gathering data and doing my own research, largely based on the past work here at SO.   I started making my own spreadsheets to track RV (Excel linked to TOS with RTD).  I paid for a subscription to ONE and started backtesting as many earnings trades as I could and visualizing how rising IV can push around your T+X lines.  I started trading long straddles and calendars on my own.   After the first earnings season doing this on my own I had about a 30% return on my account during that earnings period with very little risk/drawdown.

 

Then 2020 hit and I missed out on an entire earnings season and made some bad VXX and VIX type trades.  I had a bit of a rough patch the past few 6 weeks or so (took a lot of large losses on some of my own NEHS trades and other speculative plays).  But, here is the interesting thing, almost all of my earnings trades have been profitable.   Although the equity curve looks jumpy the past few weeks its because I have a lot of non-liquid calendars open where the pnl jumps around a lot at close.   My guess is that my equity curve will be close to a new all time high within the next week or two as some of my calendars are starting to turn profitable and RV is moving in my favor.  If I did not do any of those NEHS trades and VXX trades it would probably be back at the highs based on earnings trades.  

So this is not "easy" by any means and I am not even sure if I have this figured out but I can tell you the underlying concepts and principles taught here work and make sense.  Blindly following the alerts is not great in my opinion and I wish there was a way to split the group out for those of us that dont even want to follow the alerts (I would bet most of the successful people here do not follow every alert and are in the trades before Yowster even posts them).

So if you want an alert service that is "set and forget" I would just quit now and I don't know of any such alert service.  If you want to collaborate and learn with a group of really good traders and smart people I think this place is worth the money.

 

image.png

 

Edit/Update - I did not mean to scare people with that equity curve above.  If you compare my results back in 2019 to the SO trades you will see I was not following the rules or official trades very closely.  Some of my biggest trades were HD and GS calendars which were both assigned to me and 100% losses which was very rare for these type of trades and SO no longer trades calendars that way with the shorts expiring before earnings.      Here is my 1 year equity curve which is mostly earnings trades plus some bad VXX and VIX trades I made recently.   Even with those losses I am up close to 36% year to date and we still have one more earnings quarter left.   I am not posting this to brag as I suspect people here have returns that are double or triple this, rather, to show that earnings trades can work.  

image.png

Edited by FrankTheTank

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What a thread ! Very interesting. 

I just completed 1 month with SO, joined in the month of "Loosing July" . For results, I broke even ..would have been profitable without NFLX unofficial NEHS trade. And I am in the worst position from fills perspective i.e. in exactly opposite timezone so rarely I am able to execute on same day. Biggest lesson learnt, never execute NEHS at official price without looking at leg volatility and short credit percent. At times, I got the exact fill but the short credit percent was less..leading to leakage.

I took only one trade on my own and closed it for NPNL. It would be great to have an experience person like @FrankTheTank guide on Calendars .I have read the site content but not feeling confident enough. 

Its the beginning of my second month and will try BBY straddle today. Given the amount of experience, it might be worth considering few directional trades as part of the service. Due to difficult environment and trending market, might be good to diversify SO strategies to add more directional ones. Just my 2 cents.

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3 hours ago, TinyBuddha said:

What a thread ! Very interesting. 

I just completed 1 month with SO, joined in the month of "Loosing July" . For results, I broke even ..would have been profitable without NFLX unofficial NEHS trade. And I am in the worst position from fills perspective i.e. in exactly opposite timezone so rarely I am able to execute on same day. Biggest lesson learnt, never execute NEHS at official price without looking at leg volatility and short credit percent. At times, I got the exact fill but the short credit percent was less..leading to leakage.

I took only one trade on my own and closed it for NPNL. It would be great to have an experience person like @FrankTheTank guide on Calendars .I have read the site content but not feeling confident enough. 

Its the beginning of my second month and will try BBY straddle today. Given the amount of experience, it might be worth considering few directional trades as part of the service. Due to difficult environment and trending market, might be good to diversify SO strategies to add more directional ones. Just my 2 cents.

I could never make the "alerts" work for me.   I found better success following the "unofficial trades" discussion and seeing what other people like TrustyJules were looking at and asking them "why".   From there you can start to build your own screens and trading on your own.  VolHQ is only $50 per month for SO members and you can make that easily in one trade so its worth it.   Use the alerts as a way to see what Yowster and Kim are looking at but don't try to follow them exactly as you will just get frustrated as there is no way to replicate that 100%.  

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Yalgaar thank you for your post. I'm pretty much in the same situation as you, losing $ and was not interested in criticizing just trying to learn as well. My post didn't go over well either.

April was my first month and I was paper trading. I had 6 winners losers and a 15 4% return.

May I switched to real $ and was 5 for 5 and -9.2%. I had bad luck/timing I just increased my trade size when we had two good size losers. One was BYND which I previously had a win on. 

Since then I've closed USO and TLT for a avg 18.6% gain. My total of real $ is -9.2%.

Here is a statement I'll get blasted for but I'm primarily here for the trades not the education. I like and want to learn but the way I evaluated the process in the begining was to let the experts make the trades, I place the trades and would be happy to have returns that are say 75% of the official return. While this is going on for a couple years I keep learning and eventually start putting on my own trades. 5 years from now I actually consider myself a well versed options trader.

Unfortunately that doesn't seem like a doable plan. I am not interested in devoting the time to paper trade and can't sustain ongoing losses plus fees.

It seems that you need a considerable ramp up time to simply make decent returns on the trades provided to us. I'm not complaining, if you're up for that cool. I'm not. 

I will not apologize or be embarrassed because I want to pay a fee for investment picks. It's a smart way to invest. I am up about 45% since April 11th in my equity account thanks to the awesome picks of the well known service I use. I also subscribe to a directional option site that to my surprise has continued to supply a stream of winning plays. After talking to the head trader he made it seem like he had no strategy. That kind of investing seems so much less sophisticated it doesn't impress me as much as SO type plays. But...after all this time I'm thinking that guy has something more than a dart board for making his picks. It will always be my "Las Vegas money" but for now it's working.

I was and still am impressed by SO's transparency in returns. So many other services aren't and because of that I won't even consider them.

Unfortunately, it seems that it is not possible to make anywhere close to official returns simply by placing the trades. The strategies just don't seem to lend themselves to that. Either exclusively for rookies or in general.

I wish this was not the case. I really thought I stumbled onto a way to earn money in retirement instead of getting a part time job. 

I'm overseas working now. I'll give SO one more try when I get back to the states. I will implement the 2% rule meaning I will pass on the trade if I can't get filled w/in 2%. Then of course I still have to worry bout the exit and slippage.

 

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@shipdriver I won't repeat everything that others mentioned earlier. I will just say that evaluating a service based on 2 months of experience is really not fair and not representative, especially for a service like SO. Especially considering the fact that those 2 months had returns significantly below historical our historical averages.

And honestly, I now understand why many services have only yearly terms. Maybe this is what we need to do as well.

Also, I'm sorry to say that, but those who "can't sustain ongoing losses" probably should not be in this business, and fees have nothing to do with the returns. You can pay hundreds of dollars per months for different tools (like ONE, cmlviz etc) and still lose money.

As for your comparison to directional strategies (stocks or options), this is really not apples to apples comparison. I hear those comparisons all the time, but they always come after big market rallies, never after big market declines..  Most major indexes are up 35-40% since April, so it's not surprising that your long equity portfolio is up 45% since April. How this portfolio performs during market meltdowns is a more relevant question? How does it perform during periods of sideways markets? Like 2015 when the markets were flat and our model portfolio produced 200% return? Looking at returns alone is meaningless without considering the risk.

P.S. This is taken from  one of the options trading mentoring programs website:

Plan on at least six to twelve months of paper trading and live trading to get to break even. Once you are not losing money, you can slowly start scaling your trading size up.

Your doctor, attorney or pilot all started by hitting the books and then getting instruction from a current and qualified professional to teach them their trade. It is no different with option trading. It's a complicated skill set that needs a good amount of understanding before you start trading live.


I guess I'm not the only one advocating this approach.

btw, most mentoring programs are priced around $5-6k (5 years worth of SO membership). Usually people don't expect to get back their fee during their first year with the program, but for some reason they expect to get their SO fee back during their first few months..

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Here is a statement I'll get blasted for but I'm primarily here for the trades not the education. I like and want to learn but the way I evaluated the process in the begining was to let the experts make the trades, I place the trades and would be happy to have returns that are say 75% of the official return. While this is going on for a couple years I keep learning and eventually start putting on my own trades. 5 years from now I actually consider myself a well versed options trader.

Unfortunately that doesn't seem like a doable plan. I am not interested in devoting the time to paper trade and can't sustain ongoing losses plus fees. 

 

 

I think that is a very doable plan.  Following the trades might not match the SO returns but 75% is a very reasonable goal.  You might have to make a few adjustments in the mechanics of building the trades.  Perhaps I'm reading it wrong but if you have 5 out of 5 winners you shouldn't be losing money.  Tighten up your parameters.  With straddles and such if you are 2% off on entry and 2% off on exit plus some commission it will be a tough go for sure.  Let them go and focus on the trades that don't have to be so exact for now.  The market for our historical strategies is slowly coming back to normal and there will be many more trades that won't need as high a level of exactness entering.  And nothing wrong with letting the experts make the trades as Kim and Yowster are certainly experts and work diligently to come up with trades to make us money.  For example, I am certainly no expert on 30 year or 10 year bonds and don't have any inclination to be but I make sure I get in on every TLT trade that comes up.  I focus my time on the stuff I am good at and less on the the trades I'm not really interested in gathering a book of knowledge on.  In Canada we aren't allowed spread trades in retirement funds (RRSP) so I also have a cheap but profitable alert service I use for directional trades.  That is another area I am not inclined to do the T/A on and pay it very little attention. Like you my goal was to get something going to add to the retirement years.  On the west coast the market is over at 1 oclock so lot's of time for a round of golf.  This has turned into a lot of fun, my mornings are busy like most retirees, I'm just happier making money than woodworking ha!  Everyone has there own goals, good luck. 

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As a new member (less than a month) I can already tell other "newbies" that some hard work is require to succeed. We need to do our homework and especially don't chase the trades.

I am still learning the SO methods but to help me target what strategy could have the best outcome (NB: Sample size is limited and market conditions vary and stats have to be taken into that context) took a couple of hours to compile and make a bit of analysis of SO trade stats for 2020 (% of Winners by category)...

See my other post. It certainly can be of some help.

https://steadyoptions.com/forums/forum/topic/6584-steady-options-2020-stats/

With the % of winning trades, the average return as well as the low average drawdown on losers, I have to admit that If I cannot start to make money on a regular basis here at SO within the 6 months (maybe a year...) I will have to reverify what is wrong with the way I trade because there is certainly a way to make consistent money with what is being teach here with what the stats are telling me.

In any case good luck and good trading! 

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4 hours ago, Paul said:

 

Here is a statement I'll get blasted for but I'm primarily here for the trades not the education. I like and want to learn but the way I evaluated the process in the begining was to let the experts make the trades, I place the trades and would be happy to have returns that are say 75% of the official return. While this is going on for a couple years I keep learning and eventually start putting on my own trades. 5 years from now I actually consider myself a well versed options trader.

Unfortunately that doesn't seem like a doable plan. I am not interested in devoting the time to paper trade and can't sustain ongoing losses plus fees. 

 

 

I think that is a very doable plan.  Following the trades might not match the SO returns but 75% is a very reasonable goal.  You might have to make a few adjustments in the mechanics of building the trades.  Perhaps I'm reading it wrong but if you have 5 out of 5 winners you shouldn't be losing money.  Tighten up your parameters.  With straddles and such if you are 2% off on entry and 2% off on exit plus some commission it will be a tough go for sure.  Let them go and focus on the trades that don't have to be so exact for now.  The market for our historical strategies is slowly coming back to normal and there will be many more trades that won't need as high a level of exactness entering.  And nothing wrong with letting the experts make the trades as Kim and Yowster are certainly experts and work diligently to come up with trades to make us money.  For example, I am certainly no expert on 30 year or 10 year bonds and don't have any inclination to be but I make sure I get in on every TLT trade that comes up.  I focus my time on the stuff I am good at and less on the the trades I'm not really interested in gathering a book of knowledge on.  In Canada we aren't allowed spread trades in retirement funds (RRSP) so I also have a cheap but profitable alert service I use for directional trades.  That is another area I am not inclined to do the T/A on and pay it very little attention. Like you my goal was to get something going to add to the retirement years.  On the west coast the market is over at 1 oclock so lot's of time for a round of golf.  This has turned into a lot of fun, my mornings are busy like most retirees, I'm just happier making money than woodworking ha!  Everyone has there own goals, good luck. 

@Paul Just a quick question. I just read your post and I am currently looking for a good alert service for directional trade for my RRSP. Any suggestions (or service to avoid you tried before)

Thx. 

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When using any directional service, please pay attention not only to overall returns, but also to volatility. The below losing streak is not uncommon for directional services, and while they might present the performance based on 10% allocation per trade, with such volatility I would never allocate more than 2-3% per trade for directional speculative trades (which of course would completely change the overall returns).
 

image.png

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You are 100% correct about sizing.  When the market turns around hard you might as well write off your positions.  Really too bad we can't do the Steady Options trades in the RRSP's.  Canada eh!

 

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7 hours ago, shipdriver said:

I will not apologize or be embarrassed because I want to pay a fee for investment picks. It's a smart way to invest.

It can be a smart way to invest, if the service's strategy is one that lends itself well to picks and truly generates alpha or risk-adjusted return, not just extra returns by taking extra risk. But that's a huge if. The overwhelming majority of successful "picks" from a typical service rely on beta or other risk factors to generate the return. Anyone can do that without needing to pay a fee. Heck, these days you can do it through low-cost ETFs that will literally do the work of isolating to particular risk factors for you (e.g., beta). 

 

SO is a rare outlier in this respect. This strategy generates very attractive risk-adjusted returns, which is the only thing that matters. 

7 hours ago, shipdriver said:

 

I am up about 45% since April 11th in my equity account thanks to the awesome picks of the well known service I use. I also subscribe to a directional option site that to my surprise has continued to supply a stream of winning plays. After talking to the head trader he made it seem like he had no strategy. That kind of investing seems so much less sophisticated it doesn't impress me as much as SO type plays. But...after all this time I'm thinking that guy has something more than a dart board for making his picks. It will always be my "Las Vegas money" but for now it's working.

I have no idea what service you're referring to, obviously, but your skepticism seems very well warranted given the information you've presented. It is not difficult to be up 45% in an equity account since April, considering how equities have rallied since then. To my earlier point, all it would require is buying a few higher beta stocks. Same thing with a directional options service since April. Return is return, but if you're paying someone for a service, you should be getting skill, alpha, and risk-adjusted returns. If not, you could easily replicate it yourself with very little time invested, and without paying a fee. 

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3 hours ago, Kim said:

When using any directional service, please pay attention not only to overall returns, but also to volatility. The below losing streak is not uncommon for directional services, and while they might present the performance based on 10% allocation per trade, with such volatility I would never allocate more than 2-3% per trade for directional speculative trades (which of course would completely change the overall returns).
 

image.png

@Kim Is this from Option Alarm?

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It looks pretty familiar to Option Alarm and I remember a bad streak which is not as uncommon as you would think. But with 1 to 2 % per trade the knockdown on the account  is manageable and doesn't kill the annual return.  At larger allocations of 5 or 10 percent it would put you out of business pretty quick.

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2 hours ago, Paul said:

It looks pretty familiar to Option Alarm and I remember a bad streak which is not as uncommon as you would think. But with 1 to 2 % per trade the knockdown on the account  is manageable and doesn't kill the annual return.  At larger allocations of 5 or 10 percent it would put you out of business pretty quick.

Exactly. And when you allocate 1-2% per trade, the overall return suddenly doesn't look that attractive anymore. 

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14 hours ago, shipdriver said:

April was my first month and I was paper trading

I very quickly realized paper trading means nothing at all. It is completely useless and waste of time. There might be some value of paper trading to only someone who is complete beginner and still trying to learn very basics of trade, the platform and how Options trading overall works. Getting proper fills for the trades enter is everything.

 

 

15 hours ago, shipdriver said:

Here is a statement I'll get blasted for but I'm primarily here for the trades not the education. I like and want to learn but the way I evaluated the process in the begining was to let the experts make the trades, I place the trades and would be happy to have returns that are say 75% of the official return. While this is going on for a couple years I keep learning and eventually start putting on my own trades. 5 years from now I actually consider myself a well versed options trader.

Unfortunately that doesn't seem like a doable plan. I am not interested in devoting the time to paper trade and can't sustain ongoing losses plus fees.

It seems that you need a considerable ramp up time to simply make decent returns on the trades provided to us. I'm not complaining, if you're up for that cool. I'm not. 

I will not apologize or be embarrassed because I want to pay a fee for investment picks. It's a smart way to invest. I am up about 45% since April 11th in my equity account thanks to the awesome picks of the well known service I use. I also subscribe to a directional option site that to my surprise has continued to supply a stream of winning plays. After talking to the head trader he made it seem like he had no strategy. That kind of investing seems so much less sophisticated it doesn't impress me as much as SO type plays. But...after all this time I'm thinking that guy has something more than a dart board for making his picks. It will always be my "Las Vegas money" but for now it's working.

I can completely relate. I am glad there is at least 1 more person with similar experience. Like I have mentioned in my posts, I have concluded following trades will not make you money. Most likely you will lose money. I know many members do not agree with me but I don't conclude things without thorough testing. Just like you my expectations were also to just follow the official trades and make at least 50% of returns of official trades while I learn and gradually make 100% of better of the official trades. But I realized we cannot make the same returns as official trades by following it.

 

15 hours ago, shipdriver said:

It seems that you need a considerable ramp up time to simply make decent returns on the trades provided to us. I'm not complaining, if you're up for that cool. I'm not. 

I will not apologize or be embarrassed because I want to pay a fee for investment picks. It's a smart way to invest. I am up about 45% since April 11th in my equity account thanks to the awesome picks of the well known service I use. I also subscribe to a directional option site that to my surprise has continued to supply a stream of winning plays. After talking to the head trader he made it seem like he had no strategy. That kind of investing seems so much less sophisticated it doesn't impress me as much as SO type plays. But...after all this time I'm thinking that guy has something more than a dart board for making his picks. It will always be my "Las Vegas money" but for now it's working.

I was and still am impressed by SO's transparency in returns. So many other services aren't and because of that I won't even consider them.

These were my expectations as well. I wanted to just execute the trades make money from it while gradually learning and get even better at it. But that really didn't happen for me. 

About learning the techniques of the SO trades and make it our own.

What still impresses me about SO is Kim's integrity and honesty. He is a very smart guy and have amazing business sense and he is doing a great work with this service and the most important thing is he is honest......While reporting each and every trade honestly with real fills and still generating the kind of returns is amazing! Even though I am not able to generate the same performance, not even close....who is stopping me from doing that!!! I will it's just me....Kim and Yowster and so many members here are willing to and happy to share every logic in detail about why a certain trade is taken....why it's closed! It may all be difficult but who is stopping us from learning that? They are willing to teach and are very happy to....why not put in our time and effort to learn it.

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15 hours ago, shipdriver said:

Unfortunately, it seems that it is not possible to make anywhere close to official returns simply by placing the trades. The strategies just don't seem to lend themselves to that. Either exclusively for rookies or in general.

I wish this was not the case. I really thought I stumbled onto a way to earn money in retirement instead of getting a part time job. 

I'm overseas working now. I'll give SO one more try when I get back to the states. I will implement the 2% rule meaning I will pass on the trade if I can't get filled w/in 2%. Then of course I still have to worry bout the exit and slippage.

My best wishes to you buddy! I can totally understand since I had exact same expectations and got very disappointed and annoyed! I do suggest the following since I plan to do the same:

1) Don't give up so easy. Keep taking the official trades just don't chase the price. If you get filled at official price, great otherwise let it go.

2) Pick 1 of the strategies here and read every single post in the discussion when the trade is taken. Ask questions and understand everything about it. Take your time to slowly learn it and master it.

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12 hours ago, Kim said:
12 hours ago, Kim said:

 I won't repeat everything that others mentioned earlier. I will just say that evaluating a service based on 2 months of experience is really not fair and not representative, especially for a service like SO. Especially considering the fact that those 2 months had returns significantly below historical our historical averages.

1. AS I SAID, I PLAN TO TRY ONE MORE TIME WHEN I GET HOME FROM THE STATES. IF THE SERVICE IS OPEN THEN, BUT I'VE BEEN INVESTING FOR A LONG TIME, DID IT FOR A LIVING FOR 14 YEARS (MERRILL, RAYMOND JAMES, CITIBANK) SO I WILL TRUST MY JUDGEMENT ON MY TIME HORIZON THANK YOU.           2. THE NUMEROUS THREADS WITH OTHERS REPORTING SIMILAR POOR RESULTS COMPARED TO THE OFFICIAL IS ALSO FACTORING IN TO MY EVALUATION.                    3. MY RETURNS ARE APROX. 7.5% BEHIND THE OFFICIAL. SO A BAD MONTH OR TWO ISNT AS MUCH MY CONCERN AS BEING ABLE TO GET THAT STAT WAY LOWER. THERE ARE OFTEN 3 TIMES WE NEED TO FILL VERY CLOSE TO THE OFFICIAL TO GET RETURNS SIMILAR TO OFFICIAL. THE OPEN, THE ROLL, THE CLOSE. SO EVEN IF SO HAS GOOD MONTHS WHEN I TRY AGAIN IF I CANT REDUCE THAT -7.5% STAT I WILL STILL BE LOSING $.

And honestly, I now understand why many services have only yearly terms. Maybe this is what we need to do as well.

THAT'S YOU'RE CHOICE. I CHALLENGE YOU TO DO IT.

Also, I'm sorry to say that, but those who "can't sustain ongoing losses" probably should not be in this business, and fees have nothing to do with the returns. You can pay hundreds of dollars per months for different tools (like ONE, cmlviz etc) and still lose money.

"CAN'T SUSTAIN LOSSES" YEP THAT'S ME. TRY TO KEEP THAT TO A MINIMUM. I TOTALLY GET FOLKS WILLING TO THAT ARE PUTTING ON THEIR OWN TRADES BUT I DONT HAVE THAT INCLINATION. IM CERTAINLY NOT GOING TO PAY A SERVICE FOR TRADE IDEAS AND SUSTAIN LOSSES FOR VERY LONG.

As for your comparison to directional strategies (stocks or options), this is really not apples to apples comparison. I hear those comparisons all the time, but they always come after big market rallies, never after big market declines.. 

NEVER SAID IT WAS THE SAME SIMPLY POINTED OUT WITH MANY ALERT SERVICES NO SPECIAL SKILLS, TRAINING OR EXPERIENCE IS REQUIRED TO EARN RETURNS CLOSE TO THEIR OFFICIAL. SO STRATEGIES ON THE OTHER HAND DO REQUIRE SKILLS AND EXPERIENCE JUST TO DO WELL WITH THE OFFICIAL TRADES. I STAND BY THAT COMMENT.

Most major indexes are up 35-40% since April   

 REALLY WHICH INDEX IS THAT I WILL BUY IT. THE S&P 500 WAS UP 23% 4/11/20 - 8/6/20. SO WHICH INDEX IS DOUBLE THE S&P???

so it's not surprising that your long equity portfolio is up 45% since April. UMM IM A BIT MORE SOPHISTICATED THAN THAT. I COMPETE WITH THE S&P 500 TRUST. IT WAS UP 23% MY PORTFOLIO (NOT MY PICKS, I PAID FOR EM) IS UP 51% BEATING THE INDEX BY 27%, DURING THAT PERIOD.

How this portfolio performs during market meltdowns is a more relevant question? How does it perform during periods of sideways markets? Like 2015 when the markets were flat and our model portfolio produced 200% return? Looking at returns alone is meaningless without considering the risk.                   WHATEVER. THE SERVICE I REFER TO WHICH IS PRETTY MUCH A HOUSEHOLD NAME HAS TWO PRIMARY PORTFOLIOS. IN THE LAST 18 YEARS ONE PORTFOLIO WAS UP 195%, THE OTHER 765% COMPARED TO THE S&P RETURN OF 102%. MOST PEOPLE INVEST IN A BLEND OF THE TWO PORTFOLIOS. ITS A LONG TERM BUY AND HOLD STRATEGY SO YEAH WHEN THE MARKET TANKS IT WILL TANK. BUT IT TANKED A LOT LESS THAN THE S&P AND ROSE A LOT QUICKER. 

P.S. This is taken from  one of the options trading mentoring programs website:

Plan on at least six to twelve months of paper trading and live trading to get to break even. Once you are not losing money, you can slowly start scaling your trading size up.

I DOUBT THAT REFERS TO USING TRADES PUT TOGETHER BY A SERVICE BUT RATHER PUTTING TOGETHER YOUR OWN TRADES. IDK DOESNT MATTER IF THATS HOW LONG IT TOOK TO DO WELL WITH TRADES IM PAYING FOR IT ISNT SOMETHING IM INTERESTED IN. I GUESS I DONT WANT IT BAD ENOUGH.

Your doctor, attorney or pilot all started by hitting the books and then getting instruction from a current and qualified professional to teach them their trade. It is no different with option trading. It's a complicated skill set that needs a good amount of understanding before you start trading live. TRUE BUT IT IF THAT APPLIES TO TRADES IM PAYING FOR AGAIN NOT FOR ME.


I guess I'm not the only one advocating this approach.

btw, most mentoring programs are priced around $5-6k (5 years worth of SO membership). Usually people don't expect to get back their fee during their first year with the program, but for some reason they expect to get their SO fee back during their first few months..

YEAH WE ARE ALL IDIOTS.

To everyone else I meant to say in my OP I had  5 winners AND 5 losers for -6.2%. That was in May. Wish we could edit. I don't have a PC just using my Android.

I don't feel it proper for me to advertise or even mention by name another service on this forum. Even though the proprietor can be abrasive and rude I still won't stand in his "store" and tell out about the competitors. 

Kim responds to any form of criticism no matter how diplomatic and polite it is in a way I find to be overkill and harsh. Certainly if someone is being a jerk and making stupid comments they deserve it. But...you tend attack in relentless fashion even to polite comments that aren't attacking SO as much s just expressing what they've experienced. That's why I decided to not be as diplomatic in this response.

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To everyone else I meant to say in my OP I had  5 winners AND 5 losers for -6.2%. That was in May. Wish we could edit. I don't have a PC just using my Android.

I don't feel it proper for me to advertise or even mention by name another service on this forum. Even though the proprietor can be abrasive and rude I still won't stand in his "store" and tell out about the competitors. 

Kim responds to any form of criticism no matter how diplomatic and polite it is in a way I find to be overkill and harsh. Certainly if someone is being a jerk and making stupid comments they deserve it. But...you tend attack in relentless fashion even to polite comments that aren't attacking SO as much s just expressing what they've experienced. That's why I decided to not be as diplomatic in this response.

 

 

That was probably me that got that wrong.  Thought you said you lost money on 5 winners.  No biggie.  The same holds.  Not sure where you are going with this, I don't usually say much but you should relax and focus on filling the coffers. No matter what you made or didn't make in May, June or July  doesn't change anything.  I'm sure a lot of people did better than me and I did OK.  A number of people on this site are going out of their way to help others, listen to what they offer and go  from there.  And I am pretty sure Kim couldn't care less about whatever other service was mentioned here, no reason he should care.  His record speaks for itself.  I was referencing a specific situation in regards to Canadian retirement funds.  Good Luck.

 

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On 8/21/2020 at 10:09 PM, yalgaar said:

I very quickly realized paper trading means nothing at all. It is completely useless and waste of time. There might be some value of paper trading to only someone who is complete beginner and still trying to learn very basics of trade, the platform and how Options trading overall works. Getting proper fills for the trades enter is everything.
 

I can completely relate. I am glad there is at least 1 more person with similar experience. Like I have mentioned in my posts, I have concluded following trades will not make you money. Most likely you will lose money. I know many members do not agree with me but I don't conclude things without thorough testing. Just like you my expectations were also to just follow the official trades and make at least 50% of returns of official trades while I learn and gradually make 100% of better of the official trades. But I realized we cannot make the same returns as official trades by following it.

 

These were my expectations as well. I wanted to just execute the trades make money from it while gradually learning and get even better at it. But that really didn't happen for me. 

About learning the techniques of the SO trades and make it our own.

What still impresses me about SO is Kim's integrity and honesty. He is a very smart guy and have amazing business sense and he is doing a great work with this service and the most important thing is he is honest......While reporting each and every trade honestly with real fills and still generating the kind of returns is amazing! Even though I am not able to generate the same performance, not even close....who is stopping me from doing that!!! I will it's just me....Kim and Yowster and so many members here are willing to and happy to share every logic in detail about why a certain trade is taken....why it's closed! It may all be difficult but who is stopping us from learning that? They are willing to teach and are very happy to....why not put in our time and effort to learn it.

@yalgaar I never believed that anyone can be successful by blindly following someone else. I still don't believe it. Learning and finding your own style is the only path to success.

I'm glad that you are glad to find someone with similar experience, but if you really want to succeed, maybe it's better to listen to dozens of successful members who found a way to make very good money with SO, instead of former members who cancelled after just few weeks. Most of our successful members will tell you that they started with paper trading, and this is something that most industry experts agree on, but you find it completely useless and waste of time. You ask for advice, but when advice is provided, you dismiss it as useless and/or insulting.

There are hundreds of services out there that will gladly take your money and will tell you how easy it is to make money with options. You are welcome to try them and see for yourself how easy or difficult it is.

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2 hours ago, Kim said:

Most of our successful members will tell you that they started with paper trading, and this is something that most industry experts agree on, but you find it completely useless and waste of time. You ask for advice, but when advice is provided, you dismiss it as useless and/or insulting.

@Kim

Seems like you have misunderstood my statement about Paper Trading. So let me clarify. I agree paper trading is of immense value for a beginner to learn basics of Options Trading and understand your broker platform and how to use it. But to me that's about it. I personally know all that since over 8-10 years. As far as SO trades are concerned for someone like me who already knows all the basics of Options trading....I still believe Paper trading is useless. I say this because there is nothing more to learn from it....as a matter of fact it could be quite dangerous since it would give you a false sense of profit expectations since there are no real fills. 

2 hours ago, Kim said:

I never believed that anyone can be successful by blindly following someone else. I still don't believe it. Learning and finding your own style is the only path to success.

I respectfully disagree with you here. I do believe there are people, companies that provide you services that you can follow their trades and make consistent income. It does require a good amount of due diligence to find out if they are real. Too much CRAP out there. 

 

2 hours ago, Kim said:

but if you really want to succeed, maybe it's better to listen to dozens of successful members who found a way to make very good money with SO

I am all ears to listen to all you experts. I am not giving up so easy. I never do. I do understand now I had wrong expectations. I did believe I can follow the Official trades and make at the least 50-70% of its performance and it would all be good. But I now understand the dynamics of this and that it cannot be achieved the way I thought it could be. But I still do believe if you can do it, Yowster can do it....many members here can do it......and I am getting the privilege to ask you all how you do it....then I can't think of any reason why I will not be able to do it in time. 

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@yalgaar  If you haven’t already, and you believe the difference in paper trading and real life fills is a major problem, then perhaps try using a direct market access broker like the pros are using to get the best fills possible.  Cutting the middlemen wholesalers out of the equation by using Interactive Brokers, for example, should make a significant improvement in your fills.  As well, using Option Net and other resources available should be helpful too.  

 

To me, being a fellow newer member and using a broker that routes orders through wholesalers but then concluding profiting from following official trades is virtually impossible would be similar to me being an above average golfer with about 10 handicap that uses Wal-Mart clubs saying that breaking par is virtually impossible with the best pro as my caddy.  The caddy may help drop a few strokes.  A lot more practice and a lot more lessons will usually be needed for several months to a couple years to drop those several more strokes.  Then upgrading to the best clubs fitted to your swing (customizing IB to your workflow) and using other game improving resources the club pro suggested for me to use should cut off a few more strokes on average to get me consistently breaking par.  I can’t expect to break par consistently with my current skills and gear even if I hire the best pro golf trainers to be my caddy every weekend.  Consistently breaking profit in options trading is a transformative journey similar to that of being able to consistently breaking par in golf.  

Edited by QuickNick

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The point with paper trading is to understand the strategies, see how a trade evolves day by day, see how the adjustments impact the trades etc...  Some people also do very small tracking trades for the same purpose (although some trades can't be setup to use a small allocations).    IMO, focusing on paper trade fills vs live fills is missing the point of it.

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2 minutes ago, Kim said:

Exactly! And I can tell you that I myself still do paper trading when checking a new strategy. It's not about being a new trader, and it's not about fills. It's about understanding new strategies and avoiding costly mistakes.

 

16 minutes ago, Yowster said:

The point with paper trading is to understand the strategies, see how a trade evolves day by day, see how the adjustments impact the trades etc...  Some people also do very small tracking trades for the same purpose (although some trades can't be setup to use a small allocations).    IMO, focusing on paper trade fills vs live fills is missing the point of it.

Agreed. It helps you understand basics of how strategy works. The dynamics of how all different greeks impact the P&L. I agree anyone and everyone should do it. I am not denying that. But being told you should paper trade when you are losing money following official trades does not make sense! 

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12 hours ago, yalgaar said:

My best wishes to you buddy! I can totally understand since I had exact same expectations and got very disappointed and annoyed! I do suggest the following since I plan to do the same:

1) Don't give up so easy. Keep taking the official trades just don't chase the price. If you get filled at official price, great otherwise let it go.

2) Pick 1 of the strategies here and read every single post in the discussion when the trade is taken. Ask questions and understand everything about it. Take your time to slowly learn it and master it.

I've read this whole thread . . .   nice to see it kind of come full circle - back to more of a constructive tone.   It is very hard to have good "context" when using remote "conversations" via the WEB - so we all need to have a flexible and empathetic attitude when discussing ideas, Pros/Cons, issues, etc..   Good to see that most of us really do want a positive and productive discussion (even if we have to circle around a few times).

 

In addition to your two points above, I'd like to add a third one (with some background):

 

One of the lessons I've learned (and the hard way - as always) is that it is VERY easy to actually get into trades . . .  and it is a lot harder to get out of them.  This is especially true when things aren't going your way.   Most non-professional traders tend to put too much hope and blind optimism into their trades - they don't manage their risk well  (getting into and especially getting out of trades).   It is easy to be emotionally involved with a trade - and not let it go and move onto the next.   Overall trade and risk management is KEY to making money in the equity markets - all of them.  I've learned to manage my trades a LOT better due to what I've learned on SO --- and this applies to general stock picks as well as options plays.  To me (outside of good entry strategies), it is the most important thing I do.   When something isn't working, get out of it, stop doing it, re-group, review your trade logs, seek help, etc..  Don't keep riding a three-legged horse, hoping it turns into a four-legged horse.  ;)

 

Also, we have to remind ourselves of the fundamentals --- did we have a good setup/strategy, has anything changed in the overall market or context that requires us to adapt/morph what we do?   These last few months have caused me to constantly review/analyze what works FOR ME and what doesn't.   In the end, we are all responsible for adapting what we learn on SO to our style of trading - given our time allotments, account size, technology we use, mindset, emotional makeup, etc..   I give @Kim, @Yowster and many others credit for showing their ugly babies, discussing what isn't working - in THIS market and being willing/able to adapt and change.   This is key . . .

 

Anyway, too much coffee on a Saturday morning . . . .  hope you ALL have a fantastic weekend and a very successful next week in the markets!

Edited by MaryPaananen

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6 minutes ago, yalgaar said:

Agreed. It helps you understand basics of how strategy works. The dynamics of how all different greeks impact the P&L. I agree anyone and everyone should do it. I am not denying that. But being told you should paper trade when you are losing money following official trades does not make sense! 

A suggestion for you, that is re-inforced with members posts when closing recent trades (DG, LOW, TLT).   Many members pick their own profit levels and close trades without waiting for the official trade closing notification.    You see people closed their own trades with these stocks earlier than the official - some at lower gains% compared to the official, some the same and some higher.   Since you indicate that many of the official winning trades have been losers for you, for a starting point it might make sense to pick a profit level you are comfortable with and set GTC limit order to close your trade at that profit level.

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13 minutes ago, MaryPaananen said:

It is easy to be emotionally involved with a trade - and not let it go and move onto the next.

This right here is probably the Achilles heel of all traders, but especially retail traders. You really have to operate with the mindset of a psychopath and be completely void of emotion, which is obviously HARD to do. It is something I struggle with but am getting better with. I think one of the ways to do this is trade SMALL. Smaller than you think. Obviously if you have a tiny account you can only do so much. But if you are new and you come in here with a 100k account thinking you are going to trade 10x the trade size, then you are just a gunslinger and quite honestly, delusional. Start at 1x for as long as it takes to show some consistency managing the trades. Notice I said nothing about making or losing money. That is not the point. You can be a terrible trade manager and get lucky and make money. Are you following your rules? Do you understand what you are trading and what the risk is? Can you remain emotionally detached trading just 1x? 

 

This is why paper trading is absolutely useless (other than using it to understand your brokers platform and the trade mechanics). You don't get that feeling of getting punched in the face, kicked in the stomach, or getting chopped off at the knees. 

 

Edited by pintodave
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27 minutes ago, MaryPaananen said:

I've read this whole thread . . .   nice to see it kind of come full circle - back to more of a constructive tone.   It is very hard to have good "context" when using remote "conversations" via the WEB - so we all need to have a flexible and empathetic attitude when discussing ideas, Pros/Cons, issues, etc..   Good to see that most of us really do want a positive and productive discussion (even if we have to circle around a few times).

So very true. I only follow 2 rules when posting anything online. That is...Do not write anything online that you would not say it in person when face to face. Do not hesitate to type anything that you would say it in person.

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Kim. For some of us newbies.  This exchange is very thought provoking for a lot of us. Even though, I’m my case.  I agree with you point of view.  It allows me to understand the different points of view and therefore make the subsequent post that much more relevant, when you understand the poster point of view.  
 

Troy

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Let me give some perspective from my own personal experience.   When I first joined SO in 2013, I was just a regular member just like everyone else.  I had experience with directional options trades but wanted to learn about the non-directional trading.   When I entred official trades, I didn't always get at or below the entry price but I tried to enter near the official price and sometimes waiting a day or more to enter.  I tried to not pay more than 1% or 2% more for straddles as they have lower gain targets, I'd pay a little more at times for calendars since they have higher gain targets.  I'd set my own exit targets, not waiting for the official trade notifications.   But, from the very beginning, I tried to adapt the trades to other stocks for my own trades.   And back then, it was more difficult because we didn't have the RV charting tools to make the analysis quicker and easier.   Once I'd mastered the in's and out's of the trade setups and how IV changes played such a huge role,  I began to come up with tweaks to the trades - that's how the entire hedged straddle setup originated right around the timeframe when weeklies became available for some stocks (I knew that in the vast majority of trades we didn't get huge stock price moves so the shorts would add to smaller gains and make small losers break-evens or small gains).

 

Even now, although Kim and I discuss some trade ideas, we react to each other's trade posts like everyone else when we try to enter.   I apply my same logic for entering Kim's trades that I did back in 2013, and I'm sure Kim does similar when I post new trades.  @yalgaar - regarding your suggestions around opening trades, I mean no disrespect but I feel these ideas come from your goal of trying to match official trade performance, where the SO goal is to educate as to why the trade setups look good when we enter them.   I spend a ton of time explaining setups and answering member's questions - happily doing so knowing that they ask because they want to learn.   I need to spend my time looking for new trades and answering the questions, so I don't want to add extra rules and restrictions as to when I enter a trade.   Since I've been at SO, in general, the disgruntled members usually are the ones that only follow the official trades and the happier members are the ones who try to use the knowledge to create their own trades.   I realize that a lot of people don't have as much time to devote to trading, so its more difficult for some people to adapt SO trades to their own stocks.   If you can only play the official trades, then don't go in and expect the same returns, but if an official trade has a 10% gain and your same trade winds up a loser then it's probably you who missed an opportunity to exit.   I always use the analogy of when a analyst issues a stock upgrade/downgrade - does everyone get to buy/sell the stock at the same price as when the recommendation came out?   Of course not and I don't think any investor would think so, so it always perplexed me as to why there is so much discussion about entering SO trades at exacly the same prices as the official (I never had that assumption when I tried to folllow and enter an official trade).    Based on the discussions and unofficial trades forums, many people are actively working on applying SO techniques to their own trades - and that is ideal and makes me happy that the time I devote to answering setup/strategy questions is helping people with their own trades.

 

For the official trade strategies, I'd encourage people to learn the stratagies and research their own setups because there are 2 main reasons that a good setup doesn't turn into an official trade:

  1. For the higher priced stocks, the allocation size is simple too big.   I know that when we were doing a lot of the NEHS trades, people were using stocks like AMZN and got good results but the allocation size was orders or magnitude higher than an official trade.   Same thing applies to some earnings hedged straddles for some higher priced stocks.   Also trades like call ratios on AAPL and TSLA over the last month or so.
  2. Some stocks don't have enough volume/OI to work as an official trade, but for an individual investor can work well.   I do these kind of trades a lot in my own personal trades (I don't mention them in unofficial trades because I know if I do then they can turn into a psuedo offical trade).

If you are unsure about something, post your setup and question in the unoffical trades forum (or send personal messages) and many members try to answer your questions.

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2 hours ago, Troy Mclure said:

Kim. For some of us newbies.  This exchange is very thought provoking for a lot of us. Even though, I’m my case.  I agree with you point of view.  It allows me to understand the different points of view and therefore make the subsequent post that much more relevant, when you understand the poster point of view.  
 

Troy

I agree with you. It's good to see different opinions and different perspectives, although it can be pretty upsetting to be accused of misleading marketing, when in fact we do zero marketing and zero advertising. All the necessary information is in the service description. It describe exactly what SO is what it isn't. All you need to do is reading the service description before subscribing to set the right expectations. But I guess people see what they want to see. Members who feel misled are free to look elsewhere and compare what other services offer. 

To add to @Yowster last post, at this point he is posting 70-75% of the trades, so for his trades, I'm in the same boat as the rest of the members. And I do exactly what I recommend other members to do: being patient, scaling in and out, setting my own profit targets, using slightly different strikes and expirations etc. Yes, I miss some trades here and there, and I also take some unofficial trades, there are plenty of them. My personal account performance is very close to the official performance, and I'm trading few times the official model portfolio size and keep higher percentage of the account in cash. So it's completely doable, even for larger accounts, and it's not just few members that learned to do it successfully, it's much more. But yes, you need a lot of effort and practice to do it. Show me how to make 100% a year with no effort, and I will close the service immediately..

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Based on discussions it is suggested to paper trade for 6 months before deciding to put any money into trades , does it means to pay 6 months subscriptions before deciding to continue with this system ? 
mans id someone does not want to continue he then paid for education ?

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22 hours ago, mike0a said:

Based on discussions it is suggested to paper trade for 6 months before deciding to put any money into trades , does it means to pay 6 months subscriptions before deciding to continue with this system ? 
mans id someone does not want to continue he then paid for education ?

It is suggested to paper trade for as long as necessary before committing real money. it is suggested to treat SO like any other mentoring program. For some people it could be one month, for some 6 months, for others 12 months. Members are free to cancel anytime.

Our first and most important suggestion is: Learn first, trader later.

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8 hours ago, pintodave said:

This is why paper trading is absolutely useless (other than using it to understand your brokers platform and the trade mechanics). You don't get that feeling of getting punched in the face, kicked in the stomach, or getting chopped off at the knees. 

 

I don't agree that paper trading is "absolutely useless," but I completely agree that it won't help a trader develop the emotion-management skills necessary to be a good trader. As you say, it's not the same when you know the money isn't real.

 

But this circles back to the basic problem under discussion. You've got members complaining to Kim and Yowster that they aren't replicating the official performance (or coming close to it). There can be only three possible reasons for that:

  1. the trader isn't sizing, entering, managing, and exiting the trade correctly from a strictly technical standpoint (completely excluding the emotional component); 
  2. the trader isn't sizing, entering, managing, and exiting the trade correctly from a strictly emotional standpoint; and/or
  3. the trader is doing everything correctly both technically and emotionally, but it is literally impossible to match the entries and exits of the official trades. 

 

Paper trading absolutely helps with #1, especially with complex options strategies. Changes in IV are difficult to model, and you really need to see them to understand them. Paper trading is far and away the best tactic to help with this, since you can practice the technical side and observe the trade behavior with zero risk. 

 

Paper trading won't help with #2, as you correctly say. But if #2 is the trader's only problem, then I humbly suggest that the trader really isn't at the point in their development yet where they should be paying someone else money for trades to follow. Good picks can't overcome trader emotion. Things have a way of falling into place once the emotional side is in order.

 

The theory being urged by a few folks is that #3 is the real problem--and apparently in some folks' minds, the only problem. On the one hand, I completely agree that no one will ever be able to consistently get the same entries and exits as the official on every trade. That's true of most advisory-type services, and it's definitely true of any service that trades in multi-legged option strategies. It is hardly an SO-specific issue.  

 

But on the other hand, it's demonstrably true that you can get better entries or better exits on many SO trades. The rub is, doing so requires the trader to be on point with items #1 and #2 above. So then we're back to the issue being either one that paper trading can solve (#1), or one that it can't solve but that suggests the trader should focus on the emotional side before paying for a service (#2). 

 

Just my two cents, as usual. Take all with a grain of salt, etc.

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15 hours ago, Yowster said:

For the official trade strategies, I'd encourage people to learn the stratagies and research their own setups because there are 2 main reasons that a good setup doesn't turn into an official trade:

  1. For the higher priced stocks, the allocation size is simple too big.   I know that when we were doing a lot of the NEHS trades, people were using stocks like AMZN and got good results but the allocation size was orders or magnitude higher than an official trade.   Same thing applies to some earnings hedged straddles for some higher priced stocks.   Also trades like call ratios on AAPL and TSLA over the last month or so.
  2. Some stocks don't have enough volume/OI to work as an official trade, but for an individual investor can work well.   I do these kind of trades a lot in my own personal trades (I don't mention them in unofficial trades because I know if I do then they can turn into a psuedo offical trade).

If you are unsure about something, post your setup and question in the unoffical trades forum (or send personal messages) and many members try to answer your questions.

Thank you very much @Yowster Very good advice. I intend to follow all this in my learning process. 

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On 8/22/2020 at 9:42 PM, Kim said:


I'm in the same boat as the rest of the members. And I do exactly what I recommend other members to do: being patient, scaling in and out, setting my own profit targets, using slightly different strikes and expirations etc. Yes, I miss some trades here and there, and I also take some unofficial trades, there are plenty of them. My personal account performance is very close to the official performance, and I'm trading few times the official model portfolio size and keep higher percentage of the account in cash. 

Nobody has. But it's no doubt that SO strategy is profitable in a long term run! I have canceled my subscription about year ago but I use SO as my benchmark. 😊

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9 hours ago, OptionTrada said:

Very few. 

I'm curious how do you know that? Even I don't have that information. 

What I do know is that many members reported that they make well north of $50k/year using SO strategies. Pretty good ROI on $1k investment. Many people in the US (not to mention many developing countries) don't make that kind of income in their full time job. But it took those members much longer than few months to get there.
 

28 minutes ago, Ticc said:

Nobody has. But it's no doubt that SO strategy is profitable in a long term run! I have canceled my subscription about year ago but I use SO as my benchmark. 😊

Thank you @Ticc I still remember your post

"for me it is big satisfaction that I have made this trade before you did. (same strike, same price) The reason was as same as you had. I have spend lot of time with learning last few months from you and now it pays off. Thank you."

And for me it is a big satisfaction that many members are still using what they learned here even after cancelling.

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I respect everyone’s point of view and understand that some may have wanted the pot of gold delivered with the subscription.  My $1,000 invest has produced a 0% return.  However the education and dedication of the staff is well worth the cost.  Thank you SO

Troy

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