Stock-Age: Stocks, Options and Dividends oh my!

So with regards to my structured trading model I talked about a few pages back, I'm super glad I realized this in time, but I feel stupid for not realizing it during the past 2 years while I was keeping records. Apparently it's not until you actually put money on the line that it focuses the mind to make the model efficient.

So my model was super conservative with regards to targets to keep a very high win rate. For example, in the picture below two weeks ago my model gave me a buy signal at the time of the green arrow, and my 75 cent targets were hit the following day on the red arrow. However, due to the unidirectional movement of the Russell 2000 I didn't get another signal for the entire week. This situation happens quite often that I sit out for 5-10 days while the Russell moves continuously in one direction or another. By setting conservative targets I give up all those gains from the unidirectional move. Nearly as worse, whenever I sit out during a huge run my model's results deteriorate because the average amount of signals I get per day drops, as does my average profit per day, all despite not being involved within a trade.

However, it turns out if I merely close out my position upon the next signal my win rate drops down to about 50% but my total profitability improves by over 200%, which due to the exponential nature of the model means about 6 times more money per year. The average gain per win increases by 250% while the average loss increases by about half. What happens is I end up closing out a signal after a huge run of $3-5 or even higher (the month-long run after the 2016 election, for example). A closed trade after a huge run of a few dollars is worth many times the $.575 profit gained from my previous model after a successful signal that hit my $.4 and $.75 targets. The results of the new model from non-volatile periods that don't result in huge runs is not much worse, just about 20% worse.

The new model's rules are a lot more uncomfortable to enact since I don't close out the position when I have hit profitable targets, but I'm excited about it if I can keep my discipline about me.
 
The new model's rules are a lot more uncomfortable to enact since I don't close out the position when I have hit profitable targets, but I'm excited about it if I can keep my discipline about me.
If you like math, models and tuning win % and profit/loss, let me suggest tasty trade to you. It's entirely probability based trading based on market efficiency. They have a ton of published research on the site, and do something like 10 hours a day of live video content.

They do completely ignore charts though, so that might take a while for you to adjust to.

edit: here's an old video that is a good example of the kind of stuff they do https://www.tastytrade.com/tt/shows/market-measures/episodes/sell-puts-or-buy-stock-05-24-2016
 
If you like math, models and tuning win % and profit/loss, let me suggest tasty trade to you. It's entirely probability based trading based on market efficiency. They have a ton of published research on the site, and do something like 10 hours a day of live video content.

They do completely ignore charts though, so that might take a while for you to adjust to.

edit: here's an old video that is a good example of the kind of stuff they do https://www.tastytrade.com/tt/shows/market-measures/episodes/sell-puts-or-buy-stock-05-24-2016
I've researched them quite a bit, and they seem to be a sham to give business to TDAmeritrade. I've seen a lot of video analysis that shows their system just won't work, because it produces too few signals, has too little open interest, the spreads on options are simply too large, and the losses their system suffers are more severe than they let on, and the gains not as great as they say. Their system also can wipe out your entire account in a stretch of an unfavorable market environment.

This guy lays out the problems with it.

Honestly I don't see how anyone gets options strategies to work, it seems a 50 cent move in the underlying against you hurts you more than a 50 cent move in the underlying towards you. My system only has the 1 to 2 penny spread in the Russell 2000 leveraged etf working against me.
 
I've researched them quite a bit, and they seem to be a sham to give business to TDAmeritrade. I've seen a lot of video analysis that shows their system just won't work, because it produces too few signals, has too little open interest, the spreads on options are simply too large, and the losses their system suffers are more severe than they let on, and the gains not as great as they say. Their system also can wipe out your entire account in a stretch of an unfavorable market environment.

This guy lays out the problems with it.

Honestly I don't see how anyone gets options strategies to work, it seems a 50 cent move in the underlying against you hurts you more than a 50 cent move in the underlying towards you. My system only has the 1 to 2 penny spread in the Russell 2000 leveraged etf working against me.
I'll check out your video but your take is way off. First of all, they aren't even affiliated with TD anymore. They started their own brokerage company and cut commissions by 50-80% of what TD charged and more compared to other companies.

As for your other question, I've been trading options exclusively for about two years and my account is doing just fine.

And regarding your question about a 50 cent move, that's where I think you might actually enjoy learning about. There are lots of options metrics, known as Greeks that can tell you ahead of time what would happen what will happen to your position.

Edit: just watched the video and the dude a) doesn't seem very bright b) his results make no sense to the point where I think he just made them up c) tasty trade doesn't suggest an entire portfolio of a single strategy (in his case he only sold strangles) so it's not even a decent comparison to what anyone would do in real life
 
I jumped in on the ULTA salon train around 215...plan on riding this back up to 300 hopefully. At least 275...got oversold on good earnings. It's been choppily moving back up...just need to get above some of those moving averages again.

I usually don't like stops but in this case I did around 210. Try to keep any loss minimal.

I've had Merrimack pharmaceutical on my watchlist for a while and never pulled the trigger. It's up over 800% today :(
You are lucky not to be in it. It's lost so much value on it's way down and reverse split today...that's why it is up.
 

BeforeU

Oft hope is born when all is forlorn.
Been out of the game for a week due to personal reasons. Man USD is just taking hit, when will it stop. I lost almost 6k CAD in last 3 months.
 
Welp got liquidated while sleeping. Lost 380 euros on EUR/USD, betting the wrong way. I'm not even mad I know it's part of the game. I wanted too much too quick with too little knowledge and got burned. I'm going to watch and learn more now before I do anything.
 
Welp got liquidated while sleeping. Lost 380 euros on EUR/USD, betting the wrong way. I'm not even mad I know it's part of the game. I wanted too much too quick with too little knowledge and got burned. I'm going to watch and learn more now before I do anything.
Do you trade this in spot forex markets or with futures contracts?
 
took a bath on GE hitting my stop. I think I'm done with individual stocks for a while. basically did really well during earnings season in May on all my stocks and got greedy with this one when it looked like it was attractive, in spite of all loud warnings.
 
took a bath on GE hitting my stop. I think I'm done with individual stocks for a while. basically did really well during earnings season in May on all my stocks and got greedy with this one when it looked like it was attractive, in spite of all loud warnings.
trade small, trade often
 
Hey investa-gaf, is there a place where it explains the meanings of all financial terms/products?

Are these terms purposely created to confuse?

Like stocks,shares, securities, equities, derivatives, futures,options,fixed income,coupon, interest, exchange traded otc, clearing house, brokerages.

Some of them seems to do the same thing, but have different names. The more it obfuscate, the easier to to scam?
 
Hey investa-gaf, is there a place where it explains the meanings of all financial terms/products?

Are these terms purposely created to confuse?

Like stocks,shares, securities, equities, derivatives, futures,options,fixed income,coupon, interest, exchange traded otc, clearing house, brokerages.

Some of them seems to do the same thing, but have different names. The more it obfuscate, the easier to to scam?
Most things not really. I mean, when you get into plumbing for the first time, you probably don't know the names of each different pipe also. Investopedia is a good source. But if you just start out, probably best to stay away from the more complicated products and stick to the basics.
 
I been reading investopia and wikipedia, and i still can't get my head around some terms. Its like the financial planners purposefully added layers onto layers, to create a "new" product or new markets. You have brokers and then you have another inter-dealer brokers, middle man of a middle man
 
It's less a conspiracy to scam people than it is a bunch of traders and finance nerds coming up with all sorts of terms to justify their behavior post hoc, then thrown into a marketing blender. Lots of concepts and products get developed as a way to navigate around the laws and SEC regulations, too.

For the average investor, the amount of terms or financial instruments you need to be familiar with is quite small. And if you're not throwing around heavy amounts of money, paying for a financial planner isn't ideal anyway.
 

Ether_Snake

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DIS and NKE reaching attractive price targets for me. Not planning to do stock picking though, so still not buying.
 
iPhone X is already priced in after they said its not going to be delayed on their earnings call. Its going to sell gangbusters. The only hurdle will be manufacturing it. They will sell as fast as they make.
Then I guess 2% drop in stock since yesterday is a negative reaction to the new Steve Jobs auditorium ?
 
GBTC has dropped from like 900 to 500 and still is around a 50% premium to Bitcoin.

Cryptocurrenies having a tough go of it right now.

Apple stock has held better than I thought it would post conference. I think the drop is purely due to the late release of the Iphone X.
 
Should have bought 300 more when it dipped to 150-155...oh well better something than nothing.

The past week the combo baba+meli+oled+nvda has done wonders to my portfolio. Today was expecting a fall with the missle over Japan but apparently it's already old news...
 
Sold Facebook today with a small win.

Going to invest the money into the "iShares STOXX Global Select Dividend 100".

The strong Euro eats too much of my earnings, so my portfolio is going to be more balanced and I had too much Tech anyway (Alphabet, Amazon, Facebook).
 
If I have ~200k, how do you guys suggest I should split it?

I am thinking of buying mostly ETFs but would it be terrible idea to invest in some individual stocks like AAPL, BABA, AMAZON and GOOG?
 

Ether_Snake

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WTF, Google Finance is getting rid of portfolios, hopefully it gets replaced by an equivalent.

If I have ~200k, how do you guys suggest I should split it?

I am thinking of buying mostly ETFs but would it be terrible idea to invest in some individual stocks like AAPL, BABA, AMAZON and GOOG?
Buy ETFs instead.

VOO for example has:

Top Holdings
Company Symbol % Assets
Apple Inc AAPL 3.65%
Microsoft Corp MSFT 2.64%
Facebook Inc A FB 1.88%
Amazon.com Inc AMZN 1.84%
Johnson & Johnson JNJ 1.68%
Exxon Mobil Corp XOM 1.60%
JPMorgan Chase & Co JPM 1.53%
Berkshire Hathaway Inc B BRK.B 1.48%
Alphabet Inc A GOOGL 1.32%
Alphabet Inc C GOOG 1.31%
 
People still use Google Finance? It's been a shambling corpse for many years now, I'm surprised they haven't officially axed it.

If it had the support they give other programs like Sheets/Docs or even Keep, I'd use it in a heartbeat. I rather liked its straightforward layout. I hope it doesn't mean other parts of the service are next; I use Sheets that pull up-to-the-minute Finance data for things like portfolio management and rebalancing.