03/01 OEX Weekly Iron Condor

Started my weekly position once again this Monday. I checked Verticalsolutions.com’s forecast of current conditions before getting in, just to make sure we were not dealing with a major bullish sentiment before I got in.

03/01 Daily Summary

With my monthly positions already out of the market, I entered my two weekly strategies Today. No major activity, simply getting started.
Twitter-Gus update:
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03/01 NDX Fast Butterfly

Started my weekly Fast butterfly by end of day Today. I made some tweaks over the weekend in my trading strategy for this position. It relates to being able to hedge if we go against it, once hedged, I should enter another butterfly ahead of the market, and as long as the market doesn’t keep pushing much higher fast, I should be able to recover the trade. My goal is to do that in lieu of simply exiting the position every week if down -8%. If I need to hedge-recover the trade, I will give it one more week to allow for the recovery to kick in.

Note: This is the second week I get a big difference in the butterfly’s value approaching the final hour. About 30 minutes prior to closing I got filled at 31.75, then it suddenly dropped down to 30.70. Around the final hour I could not get a fill, and ended up only entering ½ of the position size I wanted. Prices eventually went back up to the 31.75 area, by the end of day. It might be worth catching this discrepancy in pricing next week if it shows up again.

Performance Review NDX Fast Butterfly

Link to Live trades:
FEB NDX Fast Butterfly Day-by-day review (4 trades)

So, let me start with a log of all trades (Live and backtested) for this strategy, I’ve tested the NDX Fast Butterfly for a little over one year before I started trading live, here is my log:



This is fine, but let’s also look at a simulated equity curve chart based on this data:




You’ll notice in the above picture that despite the ups and downs, categorized by a relatively smaller win-ratio (60%), the strategy makes money over time because its good win-loss ratio. Therefore, moving forward it is imperative to control the win-ratio and do not let it run out of hand.

I’ve decided to go back to the most basic factors when determining if you have a positive edge: Win-loss ratio and percent wins. With these two numbers, and the average win, you can use a very nice tool that Henry Carstens put together to test your edge, go to http://www.verticalsolutions.com/tools/pl_forecaster_pctwins.html and check it out for yourself, just plug in the variables and run a few scenarios to make sure your position is still a winner.




I hope you enjoy this new approach at looking at your trades from a different angle.

Cheers!
Gustavo

02/26 Daily Summary

Not much to report Today, OEX didn’t quite move and gracefully expired within my weekly condor. I am grateful for this week. We all (income traders) needed this break. Notice how the market seems to be navigating in calm waters. I sure hope we keep it up for the next few months!

02/26 OEX Weekly Iron Condor

OEX expired nicely in the center of the graph, gratefully accept the +8.7% ROI this week. Thank you!

02/25 Daily Summary

That of what I desire for me, I desire for everyone! Gratefully exited all my Butterflies this month, now waiting for OEX to expire Tomorrow so I can also book my profits on that weekly trade. Nice and sweet week, I sincerely wish the same for all fellow option traders!