I see that put credit spreads have been extremely popular, especially with the bull market for the past 12 years.
I seem to be struggling with it a bit conceptually that the expectancy is
65-90% win rate but you make small amounts
10-35% losses are large
Take a 1:3 risk to reward, on 10 trades with 80% win
01. +100
02. +100
03. +100
04. +100
05. +100
06. +100
07. +100
08. +100
09. -300
10. -300
In other words you need to be very close to almost always being right with this.
In a bull market this has been simpler, but sideways and bear this could be quite dangerous
I just want to understand, am I missing something?
Is this a good strategy but you need to tweak it?
I read the 1 trader limits the max loss to the max gain i.e. doesnt take the full loss
Is that the trick limit max loss, but wouldnt your win rate drop?