Trading Process
Posts about decision frameworks, mindset, education, and what makes a good trader vs a good trade.
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Stop cheering for your hedges to work
Your hedge has one job. Take enough sting off the move that you don't capitulate on the core position.
My portfolio: another week where the process paid
Good week in the book. Alpha Generation up around 6% on the week. Long-only made back close to 3% on a broad recovery. YTD now sitting at +6.4% including hedges.
Asymmetric bets: the idea behind every good options trade
Every options strategy I've run for twenty years has one thing in common — I'm looking for bets where the downside is capped and the upside is a multiple of it. Here's how to find them and how to structure them.
Portfolio Highlights: I made 100% on oil overnight. Then I did something most traders won't
Last week I put on an oil put ratio right before Trump's Iran deadline. Short delta, short vol. 2-by-3 ratio.
The "right" way to read skew
Someone in the community asked me if there's a rule of thumb for normalizing skew data.
Vol doubled. I traded half as much
When vol doubles, I trade half as much. Volatile markets feel like opportunity everywhere. 2% daily ranges. Headlines every hour. Setups on every chart.
Three buckets, one question
Every options trade I take falls into one of three buckets. Delta. Theta. Vega.
Your model doesn't watch the news
I spent 20 years on institutional desks. The most sophisticated risk decision I ever witnessed was a senior trader hitting pause.
15% in a month. That's not a win.
Made 15% in a month on a position I expected to take six months. Most people would celebrate. I started recalibrating.
My process to enter trades (explained)
It's game time on Google. Here is how the sequence always plays out. I first monitor an instrument awaiting for the right conditions...
If it's a delta trade, stop calling it theta
Most iron condors I see aren't theta trades.They're delta trades in disguise...
Lesson: being right on volatility isn’t enough
Last week I was long the daily SPX straddle around $40 going into the jobs number...
If your strategy has no veto, it isn’t a strategy
I don’t have a favorite trade. I have favorite conditions. And when those conditions aren’t present, I stop.
Options are NOT too risky
Most people who say “options are too risky” have already made a decision error. They’ve judged the instrument before defining the payoff.
A calibrated decision loop...
Most traders think the value of a trading community shows up after the trade.P&L screenshots. Victory laps. “Called it” energy.