Each output would print either Heads/Tails.
I have defined Heads as bullish, Tails as bearish.
2/n
Getting a lot of hate and negativity in DM's regarding whatever I have said on 9:20 straddle.
A thread on my opinion, and an experiment that I did.
Going to be a long one, I hope you don't get bored.
1/n
Each output would print either Heads/Tails.
I have defined Heads as bullish, Tails as bearish.
2/n
Basic 10th math - 50% chance of a coin toss returning heads or tails. So if I can get a R:R of > 1:3, I might be able to make this random simulation profitable.
3/n
1. Only 1 trade at 9:20 everyday, with fixed SL and target.
2. SL 50% of prem, target 4X of SL.
Ex : I buy ATM CE @ 100, my SL is 50 and target is 200.
3.If neither SL or target hit, exit at 3:25.
Here are the backtest results 👇👇
Would you trade this backtest result?
If you didn't know the logic, why wouldn't you trade this?
5/n
Now I just changed the rules slightly.
Instead of R:R of 1:4, now I will aim for 1:2, and here is what happens
6/n
So aiming for a R:R of 1:4 and this random strategy can be profitable.
So IMHO, the profitability of this system is due to it's R:R, and not theta or delta or vega.
Now let's relate this to 9:20 straddle.
Why 9:20? Why not strangles? Why not ITM options?
7/n
IMO, solely because one is quick in booking the loss making side and letting winners run.
Below attached is the BT of 9:20 straddle, SL 25% each leg
8/n
9/n
Say every data point is bearish, and some random spike took away
10/n
My main motive is to understand why am I being profitable on this trade,
11/n
My intention here is to say that I am not comfortable trading this way because it does not suit my temperament, if it does suit you, go ahead.
If my tweet makes you doubt your system, is it even worth trading it?
12/n
If you are such a trader who does not want to understand why the profit is coming into your account, and just want to take random trades because it is profitable in an excel backtest, go ahead.
13/n
14/n
Kudos to them
But my reason of not trading it is because I dont want to feel helpless when my own money is on the line.
15/n
More from All
The best morning routine?
Starts the night before.
9 evening habits that make all the difference:
1. Write down tomorrow's 3:3:3 plan
• 3 hours on your most important project
• 3 shorter tasks
• 3 maintenance activities
Defining a "productive day" is crucial.
Or else you'll never be at peace (even with excellent output).
Learn more
2. End the workday with a shutdown ritual
Create a short shutdown ritual (hat-tip to Cal Newport). Close your laptop, plug in the charger, spend 2 minutes tidying your desk. Then say, "shutdown."
Separating your life and work is key.
3. Journal 1 beautiful life moment
Delicious tacos, presentation you crushed, a moment of inner peace. Write it down.
Gratitude programs a mindset of abundance.
4. Lay out clothes
Get exercise clothes ready for tomorrow. Upon waking up, jump rope for 2 mins. It will activate your mind + body.
Starts the night before.
9 evening habits that make all the difference:
1. Write down tomorrow's 3:3:3 plan
• 3 hours on your most important project
• 3 shorter tasks
• 3 maintenance activities
Defining a "productive day" is crucial.
Or else you'll never be at peace (even with excellent output).
Learn more
How to be 5x more productive.
— Ben Meer (@SystemSunday) August 1, 2022
A best-selling author\u2019s 3-3-3 Method:
2. End the workday with a shutdown ritual
Create a short shutdown ritual (hat-tip to Cal Newport). Close your laptop, plug in the charger, spend 2 minutes tidying your desk. Then say, "shutdown."
Separating your life and work is key.
3. Journal 1 beautiful life moment
Delicious tacos, presentation you crushed, a moment of inner peace. Write it down.
Gratitude programs a mindset of abundance.
4. Lay out clothes
Get exercise clothes ready for tomorrow. Upon waking up, jump rope for 2 mins. It will activate your mind + body.
