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<\/a><\/p>\nI stole this from Steady Options. That’s the idea of the returns of the above trend following. 14.55% avg CAGR with a 9.47% Max draw down over the period. \u00a0It’s solid.<\/p>\n","protected":false},"excerpt":{"rendered":"
Looks like a bad day a’ brewing for the markets.<\/p>\n
I spent the last few days sick in bed really contemplating my plan going into this week. Having read a lot of really good analysis (like the one I posted earlier), \u00a0I planned on adjusting quite a bit on any bounce move with the\u00a0presumption of another leg down. I did just that, not in such a way where I was trading\u00a0discretionary but in a way to start moving towards getting out of several trade types I no longer want to to do and to position my overall portfolio in an appropriate way (overall deltas etc).\u00a0\u00a0I am feeling pretty good on this huge gap down today. \u00a0I had entered a small amount of April TLT\/SPY about 2 weeks ago, I closed out the majority of that yesterday having become sick of the trade and having taken advantage of the bounce in SPY and I also closed off all but maybe 3-5% of the March SPY portion (a small handful). I also adjusted and rolled my protector\/anchor spy appropriately. \u00a0All in all, feel like I used all information to weather this small correction. \u00a0We probably got the TLT\/SPY March trade down to a manageable 15% loss as compared to SOs 41% loss!<\/p>\n
The April MIC is obviously affected by volatility right now but we’re managing the trade\u00a0like a boss. I had entered 15 debit spreads yesterday on the bounce to get the delta closer to about +10. Today I entered another 15 on the fall (I definitely over paid a bit this AM \u00a0but it was falling fast). I paid 7.00 for 1200\/1180s with RUT@1208.5 \u00a0It’s now 1209.23 and the MID is 6.80.<\/p>\n
Current Greeks<\/p>\n
Delta: 23<\/p>\n
Theta: 83<\/p>\n
Vega: 370<\/p>\n
The trade is currently positive by about 1%.<\/p>\n
Soon come, I’ll probably just be managing protector and MIC trades with the occasional earnings trade. \u00a0Keeping it simple. \u00a0Keeping it rule based. The SPY\/TLT trade is out for me as is momentum. Don’t get me wrong though, momentum based strategies (or trend following) is a very very good strategy, \u00a0a place where 99% of the population should put their energies. I put a shit ton of time into learning about it, read about 5-6 great books, been following and listening to a lot of great podcasts etc. It’s got its place but I am a leverage guy, I like to leverage and I can’t sustain even minimal draw downs. \u00a0So it’s just not for me. \u00a0I’d highly recommend it to just about anyone that, well simply put, is not me. I leverage, I manage and I understand risks. It’s got buy and hold crushed. You’re getting 14-16% returns and you’re getting max drawdowns in the 12% range. Rotational momentum strategies is the place to be if you’re a regular investor\/trader who wants to do minimal trading (once a month. \u00a0The momentum strategy I followed would rotate between the top 3 of the following ETFs<\/p>\n
TLT, VNQ, LQD, GLD, VEU, VWO, IVV, VB, IEF, DBC, BWX, JNK, IJS, IVE, EFV<\/p>\n