Taking Profits vs Letting Winners Run
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Taking Profits vs Letting Winners Run


Stocks and ETFs

Created August 9th 2018 by DeadCatBounced
Updated December 2nd 2018 by kazz
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Taking Profits vs Letting Winners Run

  #11 (permalink)
London
 
 
Posts: 146 since Apr 2018
Thanks: 165 given, 75 received


wldman View Post
required to adequately respond. So generally speaking. If this thing trades puts, why not lock position gains at say a 20% return through the time frame on which you remain bullish? Worst case lock 20% gross. Second to that if puts are not available of if vol creates too big of a give up, sell half of the leveraged product to book a 10% gross...that is still a good trade at 10%. You could be long put diagonal using regular SPY as well if you want to protect gains while staying net long.

When i can log in I will take a look.

Dan

Hi. You say that you've learned a ton since switching to swing trading. This is very interesting to know as l am leaning towards swing trading due to the constraints of my day job.

Do you feel that you've learnt much more since switching to swing trading and, if so, why?

Also, do you use daily or weekly charts?

Thanks.

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  #12 (permalink)
Legendary Market Wizard
Chicago Illinois USA
 
Trading Experience: Advanced
Broker/Data: IB, ToS
Favorite Futures: /ES, US Equities/Options
 
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Posts: 3,114 since Aug 2011
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Hey Man...

@kazz

I'm not sure where the learned a ton reference comes from so I can't respond directly to that. I'd be happy to do so if there was a reference you could share.

That said...true enough that I have learned a great deal since adopting a different approach.

When I came to BMT I was trying to find coding help to automate (at the grey box level) a few low latency algorithms that could adjust to results and market conditions and as such allocate more or less to a specific strategy.

I did not find who or what I needed and while still somewhat focused, I began to drift a bit. Members here like to focus on very short time frames. My though is (and no offense to anyone) that the time frame focus was driven by two "issues", neither of which afflicted me. First, people trade intra day because the account is too small to carry futures trades. Second, many are deluded to thinking that it is easy to annualize a great single trade concept or individual trade...mostly SIM.

The recent change has me treating the /ES as a hedge against a basket of long stocks. So I can trade /ES from the short side against the longs with a single click. To abbreviate...I make money short /ES when the market and my basket of stocks go down. It is the classic "hedge fund" approach. I sell puts so sometimes I buy stocks at expiration, but they are stocks I want and at a better price than when I got paid to sell the put. The basket gets bigger.

What that meant is that I started to look at my "operations" more like a hedge fund or family office. I stopped trying to short time frame futures and started to use them as a tool for profiting on down days. I am "basket" delta neutral when I'm short between 23 and 25 contracts. I've never pushed it like that, but I would be comfortable "net neutral". The new approach allows me to trade a 1-5 lot short position with relative impunity. In a typical month I can net or save an extra 10M.

Hope that gets to the question.

Dan

So in 2018 I stopped trying to apply intra day strategies to /ES in favor of an approach

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  #13 (permalink)
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wldman View Post
@kazz

I'm not sure where the learned a ton reference comes from so I can't respond directly to that. I'd be happy to do so if there was a reference you could share.

That said...true enough that I have learned a great deal since adopting a different approach.

When I came to BMT I was trying to find coding help to automate (at the grey box level) a few low latency algorithms that could adjust to results and market conditions and as such allocate more or less to a specific strategy.

I did not find who or what I needed and while still somewhat focused, I began to drift a bit. Members here like to focus on very short time frames. My though is (and no offense to anyone) that the time frame focus was driven by two "issues", neither of which afflicted me. First, people trade intra day because the account is too small to carry futures trades. Second, many are deluded to thinking that it is easy to annualize a great single trade concept or individual trade...mostly SIM.

The recent change has me treating the /ES as a hedge against a basket of long stocks. So I can trade /ES from the short side against the longs with a single click. To abbreviate...I make money short /ES when the market and my basket of stocks go down. It is the classic "hedge fund" approach. I sell puts so sometimes I buy stocks at expiration, but they are stocks I want and at a better price than when I got paid to sell the put. The basket gets bigger.

What that meant is that I started to look at my "operations" more like a hedge fund or family office. I stopped trying to short time frame futures and started to use them as a tool for profiting on down days. I am "basket" delta neutral when I'm short between 23 and 25 contracts. I've never pushed it like that, but I would be comfortable "net neutral". The new approach allows me to trade a 1-5 lot short position with relative impunity. In a typical month I can net or save an extra 10M.

Hope that gets to the question.

Dan

So in 2018 I stopped trying to apply intra day strategies to /ES in favor of an approach

Hi, apologies, the reference to learning a ton referred to someone else. I normally use my mobile to access the app and must have mixed up the posts.

Many thanks for your very informative reply. To be honest I'll have to read it a few times to get the gist of it.

I should add that you are at a level that's way above where I am now but I'm sure that I'll learn plenty from reading your posts.

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