When something looks too good to be true it usually is.
“Usually” IS usually, but so far this year not this time. This day-trading strategy developed last November – dubbed in earlier posts here “The Fool’s Game” – has had 31 days like to day since the start of this year.
A trending day.
I define a trending day as any day the SPY calls or the SPY puts or a combination of both gain more than 100% on the day trade. All trades are solely long. Today was up above up 125% despite the 56% loss on the calls at the beginning of the day as puts ran hard into the close (see today’s color-coded charts below).
Think about that for a moment…31 days of 100% or more, a $10,000 or more profit on each $10K traded. As they say, “that’s a lotsa money!”.
Good thing too because on the 178 trading days so far this year that did not trend, the strategy has lost money. The biggest draw down was 640%. That is not a typo, $64,000 trading $10K every day.
Obviously day trading options, any options strategy, has to be with no more than a fraction of anyone’s total capital.
I’ve learned some market rhythm day-trading the closest in-the-money strike on the nearest expiration I never knew before. Friday’s are truly freaky gaining 48% of all the money for the strategy on the year, with Monday Monday being good to me too, racking up 28% of the profits; Wednesday follows with 24%, Thursday with 15%, and Tuesdays absolutely suck, barely in the black at 1%.
And no matter what this takes persistence, discipline and years of experience.
Did I forget to mention the staggering total amount trending days have made so far this year over and above the losses on the non-trending days?