Don't Trade Direction Do This Instead

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[@EliasAractingi]

when you go against the trend, premiums are juicier. This is why contrarians make more money for the same win rate

[@richardberman825]

this was to be my comment also. I wonder if the guys can respond or verify if this is true in the long run.

[@TheLKStar]

Trade options for a while, you'll see there's frequently some skew. Usually on the trend direction, except when an oversized move just happened.

[@AString95]

S&P puts have more juice than calls. So that’s not really true.

[@sethaldrich6902]

@@richardberman825 yes its true. Greater the risk, the higher the reward

[@EliasAractingi]

@@TheLKStar I have been trading options for longer than a while and my experience, confirmed by the above results, is that premiums are juicier against the trend. Besides, if the market has been historically bullish, a contrarian will have sold more calls than puts, so is not benefiting from the put skew relative to the trend trader

[@Deathsneeze007]

Great study guys. Thank you!

[@Edu-hx9sz]

Nice one. I really like your studies

[@echo3527]

From my experience one of the best ways to be effective is building a position as the price moves across a range. Short when the premium is high. Hedge when VIX goes up.

[@BalazarsBrain]

The "turtle traders" did very well with momentum trading. More of a Babe Ruth approach where you're swinging for the fences and eventually get a home run.

[@jaykay5823]

I think analyzing the economic trend. Defining trading parameter. Then timing and executing the trade will likely have the probability of winning on your side rather than limiting oneself to either contrarian or momentum trader. Personally, I don’t think having a bias is good for a trader

[@eccentricsmithy2746]

Just curious if these tests are actually valid, every single trade is different in the mind of the trader. The mindset is different, the thought process is different, their reaction is different. There is a HUGE variable with the person trading. Would you get the same results and percentages with a different trader than the person who ran the test??

[@lazchapman5907]

How about traders who traded completely neutral every day for a decade. being short units was disallowed.

[@ChaceBonanno]

This essentially shows how directional bias affects returns. As always, permabulls make the most. Markets go up more than down. I don’t get why these statistical traders just disregard that stat and try to use probabilities to predict theoretical price movement and have directional bias.

[@shammusomalley8986]

trade Tom Demark. nines and thirteens guys

[@akshay9602]

1:28 Bro forgot about 2008 crash and COVID crash. If you had sold puts during these crash then your account would have been wiped out

[@AString95]

Unless you hedge. Hedge when it’s cheap.

[@user-ue9qu6es9q]

Slide#2 mentions four types of investors yet the title of the video covers only two? Since the market always reverts to its upwards higher highs as it has for the past 100 years isn't type#1 Bullish always going to be the winner? Being contrarian brings to mind the "broken clock is always right twice a day" analogy does it not?

[@sigmareaver680]

Markov chains. Need I say more?

[@Nickc86]

I agree but that would lead me to believe momentum is better

[@johndah5247]

Guys who understand this ? I always struggle to get their points.

[@luckylanno]

The definition of momentum trader seems like a bit of a strawman. It seems like picking a sequence of up or down moves would've been more realistic...