Prediction ONLY

Darcy,

In Survior I and II GW teaches to buy 6 months out for both. It is different when selling calls/selling puts (and snipers). I try to do exactly as he teaches as I have not taken Survivor III or advanced courses so until I get to that level I will just keep on doing what I have learned. I would trade the PUTS the same as once I get the exit criteria I will be out.

I see what you are saying for the PUTS vs CALL as far as time goes. I might start practicing trading PUTS with virtual money buying less time to see how it works.

NFLX is not looking good and honestly looking back I dont think I completely have 3 pieces of hard evidence (live and learn!).

Thanks for the input, always like hearing from others!

-CLT1987

Yep, you are correct. All things held equal puts will have a higher premium factored in than calls due to the option pricing models. The market falls faster than it rises so there is a bit of higher risk premium built into the puts. Why GW decided to change the amount of time or why puts are the same as calls I do not know. My guess is that we use to use an action chart with the goal being that we had to be right "right now". No room for error. "If it backs up get out". Now we get in on big charts with defined entry criteria, no action, and exit when big charts tell us we have exit criteria. We give the position room to breathe. He started suggesting that 6 months of time was not a bad idea back in my 2005 1-5 retake. "Preferably next month, more time is better, six months is the best choice. You should never arrive in the current month". He had a student that started buying at least that much and went months without a loss. Guess GW did some research and decided it helped. It also affords you the opportunity to manage the position (sell against it, buy the opposite side, or be patient if needed). On the call side several months out gives you a chance to recover from a 911 type of an event (strong stock that was only beating down by very bad national news - has nothing to do with the stock). Still can't opine on the put question :-(

I will throw this out and is just my humble opinion. If anyone has followed the teachings from early 2000s to mid 2000s to today you will see a natural progression, growth, and maturity with how he teaches. He appears to have started as a short term swing / momentum "have to be right - NOW" trader using a 55 minute chart to more of a position trader using longer term charts and trends. He went from kicking a box down the hall if an earnings trade went against him or bragging how good he is when he did well to a more relaxed and patient trader. His focus used to be all the different ways he knew to trade and make a buck to a more streamlined approach using big charts. The goal always being to focus on getting better at the entries and exits while being calm during the trade. Buying time gives you more options since no one really knows what will happen over the next 1 to 4 weeks. If the puts are too expensive then maybe buying less contacts is the answer.

Finally, I think everyone needs to keep in mind that as GW has grown and matured as a trader/teacher the rules have changed a bit along the way. I attribute that to personal growth. What might be considered breaking the rules in the old 1-5 might be allowed under certain conditions in the old RTP. What was against the rules in old RTP might be allowed today in new Survivor given certain circumstances. I can tell you that the hard and fast rules taught in Survivor I & II are intended to teach mechanics. Once you progress beyond I & II you will have permission to do things a bit outside the box as your skills develop. It simply means that you have a different level of education / experience and are allowed to do different things.

Wish you all the very best in your trading endeavors!

c



Edited 3 time(s). Last edit at 04/21/2015 12:26PM by Darcy2.

I've been noticing for a week or so now, what seems to be a second shoulder on the SPY. I'd like to know if anyone else suspects the same or am I miss-interpreting? If you look at the daily, the left shoulder started in late Nov last year and we are rounding the right shoulder. You have to admit the market is rounding into a downtrend. What do you think? Does it not qualify?

Hey Dan,

I don't see the H&S on the SPY but there certainly is one on the NAS. Paying attention to that one real close. I think the market is going to drop a billion points tomorrow. Haha. Just kidding, I am short this market though....I just wish central banks would shut up for a bit!!!

FM

I am short as well. Need a down day tomorrow!

Well it sure looked like the makings of an H&S but you shouldn't hope for a Billion Point drop. That's just cold man!
Well it looks like SPY's gonna bust throught the ceiling [gyazo.com]
When you look at the big picture, you can see that's it's got no choice but up! [gyazo.com]



Edited 1 time(s). Last edit at 04/23/2015 10:15PM by danyzuko.