Humble

Sorry, could you please explain more? What is the difference between the 2 lines? What "under normal conditions" means?

You might consider looking at out Anchor trades service.

So lets take as an example two of our main strategies: pre-earnings straddles and calendars. Our goal is to find stocks that are suitable for straddle and those that are suitable for calendars. There are patterns. Some stocks tend to move 1-2 weeks before earnings in expectation for earnings beat. Others are more stable. By identifying those trends, we simply increase our probability of success. Stocks like NFLX, GOOG, FB etc. work better as calendars. Once we identified the trend, we can play with different parameters, like when to enter, which deltas to use, what is the optimal profit target etc. I don't know what would be the results without backtesting, but I'm pretty sure they would be worse. Why not 20 occurrences? Well, first, it is not practical. If you look at charts produced by some of our members, you won't see much if they included 20 lines. It would be too busy. Second, I think that for most stocks, the last 4-8 cycles are the most relevant. Patterns change, some stocks become more volatile, some less, and what worked 4-5 years ago, might not work today. But the most recent data is the most relevant. TradeMachine is just another tool that helps us to fine tune our strategies and find new opportunities (like the FB condor we did).

And yet we have 77-80% winning ratio on most of our strategies while looking at 4-6 last earnings cycles in most of our trades.. Theoretically you are correct. Practically we cannot look at 1000, 100 or even 20 occurrences.

Trading is a business based on probability. Nothing works all the time. Otherwise it would never work in the first place. There’s no room for ‘never’ or ‘always’ in the financial markets. Otherwise you’re sure to be surprised in the future. It is very important to understand the difference between probability and certainty. Nothing is certain in the trading. But if something happened 80% of the time, there is a good chance it will happened again. For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle. Again, there is no certainty that it will happen, only probability. But this is the best we can do. If you believe that a stock will be trading in a range in the next few weeks, you would enter a strategy like calendar or iron condor. At the same time, if you believe the stock will move, you will probably do a straddle. Well, TradeMachine removes the "guessing" part. It allows you to discover patterns that stocks are trading in different periods of time. It also allows you to check different parameters, like deltas, time to expiration, profit targets etc. and to optimize the strategy. Again, no guarantees that what worked will continue to work. But doing iron condor on FB after earnings has much better probability to succeed that doing the same trade on GOOG, NFLX or AMZN. Why? Because it worked most of the time. Members continue posting their winning trades based on TradeMachine backtesting. This is real life trading, not some hypothetical results. We already closed FB trade based on TradeMachine backtesting and started implementing TLT strategy based on the same backtesting. This is not some kind of sleazy marketing. It really works.

Here is another directional idea: http://www.cmlviz.com/cmld3b/index.php?number=11695&app=news&cml_article_id=20170913_swing-trading-earnings-bullish-momentum-with-options-in-micron-technology-inc&source=TM_insights

Webinar recording: https://vimeo.com/232876546 Password: steady

Scroll up for the link

Full price is $99 for the pro version.

Please Join us on Wednesday Sep 6, 2017 7:00 PM Eastern Time (ET) for CMLviz Trade Machine Webinarhosted by Ophir Gottlieb, CEO & Co-founder of Capital Market Laboratories (CML). Click Here to Register We just closed FB Iron Condor trade for 30.1% gain. This trade was based on The Volatility Option Trade After Earnings in Facebook post. Thank you Ophir! Would you like to find more trades like this one? There's a lot less luck to successful option trading than many people realize. Discover the power of applying science to your options trading.The results are simply staggering. This is a hands on, open book look at trade discovery -- one in which attendees will leave with a massively improved view of option trading, trade discovery and success rates. Capital Market Laboratories will open up the learning engine behind the Trade Machine for the first time -- and it will remain open forever. For a limited time, CMLviz Trade Machine is offered to SteadyOptions members at 30% discount. Click Here to Sign Up

I believe that any asset allocation has to be based on your risk tolerance and time horizon. To most people this is kind of obvious, but when it comes to implementation, many people don't follow this simple rule. For example: how much would you be comfortable to lose in the stock market before bailing out? If 20% loss makes you nervous, maybe it's better to allocate more assets to real estate? Regarding our strategies - again, it's all about risk adjusted returns. For example, Steady Condors 5 years CAGR is "only" 17%, way less than SO - but it has been achieved with much lower volatility. While I cannot really give any concrete recommendations (Chris or Jesse from Lorintine should be able to help here), but I believe that riskier and more volatile strategies should get smaller allocation.

We aim to have no more than 6 trades open, but there are periods that we have more than 6. This will not change. In any case, we will not have more than 1 trade at any given time exceeding 1k, and probably no more than 10% in total. We still want to accommodate 10k portfolios, but at the same time, there are some trades that I feel could really benefit members, but exceed 1k. @Yowster you are absolutely right, it is mostly for hedged straddles. And some of them (like FDX) cannot fit 10k portfolio even at 2:1 ratio.

Few points to remember/clarify: Increasing portfolio size to 20k does not mean more trades. We will still stick to 10% allocation, so average trade size will be around 2k instead of 1k. If we stay with 10k and place trades that are larger than 1k, I will still report it as 10% of the portfolio for simplicity. The performance reporting is never perfect anyway - if we have trade that costs $750 for example, it is 1 contract per 10k portfolio, but I still report it as 10% not 7.5%. I believe there are still many members with 10k portfolios. Some have more money to invest but select to start with 10k till they learn the strategies and fell more comfortable to invest more. Others see it mostly as educational resource and the subscription fee as tuition, worth paying regardless of what they make during their first months or years. "The math is easier using a 10,000 size" is a very valid argument. Right now there is a slight majority for 20k portfolio, but at the end of the day, it is not a big deal anyway. If we switch, members with 10k portfolios will not be able to take the larger trades anyway. Same holds if we stay with 10k. My preference right now would be to stay with 10k to make the math easier for everyone, and when we take larger trades, just mention that those trades exceed 10% if your portfolio is only 10k, and are not recommended for smaller portfolios in terms of allocation.

Our average number of trades is around 10-12 per month. I'm aiming only for highest probability trades that also have decent liquidity. However, there are many unofficial trades that members share, so those who want to trade more always have this option. And yes, it has nothing to do with model portfolio size.

As you know, we utilize 10k model portfolio with 10% allocation. That means that maximum trade size to fit the 10k portfolio is around $1,000. However, we have decent amount of trades that exceed the $1,000 size. Many members trade them as "unofficial" trade ideas, but I would like to be able to incorporate at least some of them into the official model portfolio. There are 2 possible solutions: 1. Increase the size of the model portfolio to $20k. 2. Leave it as 10k but incorporate some of the larger size trades, with a comment that this trade is not suitable for 10k portfolios. I created a poll and would like some feedback.

Here you go - https://steadyoptions.com/forums/forum/40-unofficial-trade-ideas/ This is a new forum, and there is a topic https://steadyoptions.com/forums/forum/topic/3895-unofficial-trade-ideas/ under this forum that can be used for posting some general ideas/comments/questions. I will start creating individual topics for symbols we already traded and move the comments to the new topics.

We are not talking about more generic trades like VXX. Those "unofficial" trade ideas are mostly earnings trades that don't make it into our official model portfolio. So I agree, while I initially voted for one topic per month, I now tend to agree that one topic per symbol might be better. Realistically, there are probably around 40-50 symbols that are potential candidates cycle after cycle, so there will be 40-50 topics under the new forum. They will fit into 2 pages and make the search much easier.

I don't see an issue here. If we have CIEN unofficial topic, and in some cycle I open CIEN official discussion, I just post a link.

It's actually per symbol. Meaning "CIEN earnings idea", one topic under "unofficial trade ideas" forum, and NOT "CIEN August 2017" topic, then "CIEN Novermber 2017 topic etc.

Yes. But the difference is that only me can post and reply to trades topic. And there is separate topic for each trade, not all trades under the same topic. Looks like virtually all members want some kind of separation, and big majority of members support going by trade idea separation (option #3). Just to clarify - option #3 implies one topic per symbol, not per trade. Meaning that CIEN topic will be opened only once and serve all following CIEN trades. But there is also strong support to option #4 - new topic every month, based on earnings date. So we will need to chose between those two options (3 or 4). I know it will be a compromise and not everyone will be happy but at least it will be better than the current structure.

@SBatchI completely agree. So here are few questions/comments: 1. Is creating a new topic for each trade idea really much more time consuming than replying to an existing topic? 2. How spiting to 2 topics (trades and discussions) would help? I don't think members would remember to make a clear separation, and also how would it work? If you plan to enter xxx to will post it under discussions, and then the actual fills under trades topic? Sounds a bit artificial. Personally I voted to option #4 (new topic each month). I think it will resolve the issue of topic becoming a monster, and can be a good compromise. Also members will have to follow only once a month which is also a good thing. I would like to hear more from members who post the most @Yowster @RapperT @Rogers @Djtux etc.

New topic for each trade idea (one topic per symbol, running from cycle to cycle).

Unofficial trade structure poll

Stripe is a good and reliable company. There is nothing to worry about security. Disclaimer: SteadyOptions is not affiliated with Volatilityhq in any way and does not receive any kickbacks, but we do find it very useful, and I myself just subscribed.

Yes, but still much worse than FB, and holding till 5 days to expiration is not something that I like to do.