0DTE Traders - Set Your Stop Losses HERE For Higher Profits | 0DTE Options
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Really nice piece of research. Thank you guys for putting this together. Would be interesting to see what happens in a combo world where the PT and SL are the same percentage. Ie 50% for both and/or 25% for both. My gut tells me that the higher P&L for SL only is due to the discrepancy of the TP being half the SL.
demo vid for each type?
Tom seems to not understand how valuable is for Combo management having 30% less cvar than 25% profit management for almost the same PoP and average PnL. That means for every position that you manage at 25% profits you can have a 43% bigger position combo managing with the SAME tail risk. 43% bigger PnL for almost the same PoP and no additional tail risk. That's A LOT. When doing $10 OTM Iron Condors it gets even better, with less than half CVar for slightly less PoP and bigger PnL in the combos. You can double your position (hence double your average PnL) while having the same tail risk. Doing 25% profit management instead of combo because "it's just easier" is an imprecise statement given how much more you can make on average with bigger trades for the same risk (which means you could trade less positions to profit the same amount of money and that's way "easier")
Sorry can you explain this more? I think some of the words got muddied
@@baroncurtin1453 see, if you gauge your risk by CVar, consider you have 2 types of trade managements and they have the same probability of profit and average profits, but in the second type of management you have half the CVar of the first one. You could potentially double you average profits with the same CVar of the first type of trade management by just doubling the position in the second type of management. Of course if you can stand the CVar in the first place
Pretend we’re children and explain more simply? Or direct us to a good source to research it please.
@@petadventure22 Children don't understand options, so I refuse to do it haha you just need to search for CVar, probability of profit and average PnL, watch the video, and then you'll know what I proposed here.
Would appreciate a detailed explanation of what do to
Interested follower, not a 0dte trader so much. Have wondered about the loss reduction of closing trade at 1/2 the time to expiration [edit: i.e. close at noon or after lunch on 0dte] (per your recent study) combined with take profit at 20 or 30% or what gives good return relative to cap and time risk. Thanks for all the great info over the years and keep smiling!
Would be great to see next how different combos set-up compare, I normally do 50%PT and 100%SL
Is combo means, 25% profit or 50% stop loss of the credit received?
Is it like after your entry you place stops ( 25% profit and 50% loss )
Thanks
Thank you so much for including "combo" management. That's exactly what I've been doing and it works best for me (I bet for many of us as well). Thanks for listening to our suggestions. I hope it will be included in these 0 DTE studies from now on so we can compare to Hold Till Exp and managing @25% max profit
Do you auto set 25%TP and 50%SL on every trade?
@@philelmo you can auto set to do that on some brokers, yes. I prefer to watch it closely though
@@caiobortoli roughly how far (delta) and how wide do you normally sell?
@@philelmo roughly 30 delta short (half a standard deviation) and 4-6 delta long (1.5 standard deviation). I like to set my spreads wide so they can be as close to a naked strangle as possible
@@caiobortoli appreciate your reply, thanks!
When you do these backtests, when do you ooen positions? Right when the market open bell rings? I mean the price is pretty whipping in the first few minutes... or do you wait 5,10,15 minutes?
When they say $10OTM, are they referring to SPX? If 4900, you would get 4910/4940 and 4890/4860 IC?
Same question, because a $30 out of the money zero day would be psycho on SPY
@philemo I believe you are correct. And yes, SPX.
Mr. Jones let's go!!!!!!
What is the combo strategy
Say your exit is a bracket order with three mutually exclusive triggers: (1) x% time has passed (x=100 being expiry), (2) y% PT is reached, (3) z% SL is reached. A sound research would be studying different (x,y,z) value combinations.
Can you guys run this same study on options for ES?
Is 50% optimal? Can you backtest 1x, 2x, 3x with the same PT? 😊
Victor Jones!!
The $10 OTM Combo, is $116 Net Avg P/L. Is that per contract?
Awwwww YEAH!
Isn't the low PnL on the "25% PT" exit rule indicative of the target being too low? How about a "50% PT" exit rule?
It would be logical to study different combinations of the bracket order setup, e.g., 25PT/50SL, 50PT/50SL, 75PT/75SL, 75PT/100SL, etc.
I'd take the 50% SL if one can trade like a machine, with no emotion. Almost there...