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#13 - Blueprints vs. Checklist - When To Use Each One For Trading: Hey everyone and welcome back. On today’s daily call, we’re going to talk about the difference between blueprints and checklist. This is one that I like talking about because I think conceptually, it’s a really good thought process for how you...

#13 - Blueprints vs. Checklist - When To Use Each One For Trading: Hey everyone and welcome back. On today’s daily call, we’re going to talk about the difference between blueprints and checklist. This is one that I like talking about because I think conceptually, it’s a really good thought process for how you...

A partire dalThe "Daily Call" From Option Alpha


#13 - Blueprints vs. Checklist - When To Use Each One For Trading: Hey everyone and welcome back. On today’s daily call, we’re going to talk about the difference between blueprints and checklist. This is one that I like talking about because I think conceptually, it’s a really good thought process for how you...

A partire dalThe "Daily Call" From Option Alpha

valutazioni:
Lunghezza:
6 minuti
Pubblicato:
Oct 5, 2017
Formato:
Episodio podcast

Descrizione

Hey everyone and welcome back. On today’s daily call, we’re going to talk about the difference between blueprints and checklist. This is one that I like talking about because I think conceptually, it’s a really good thought process for how you should approach trading because ultimately, everyone is looking for step by step and there are certain things you can do step by step in trading, but many things in trading is not step by step. Where we often see this actually is with people who come to us at Option Alpha and are members and have some sort of like military background because that’s how they were just trained. It’s not right or wrong. It’s just that they have military type background and in most cases, it’s like things are done by a checklist. In fact, one of the podcast you can listen to, I think it was like Show 107 that we did with a forum member, MACDDaddy, he even says the reason he does a lot of things in a checklist format is because that’s what he did in the military when he flew planes. He had a checklist for everything. There are certain things that have a checklist, but more often than not, you’re going to use blueprints as just like your guideline for what to do or what potentially you could do in different situations. I think when it comes to when you should use each one of these, I think your overall strategy should be a blueprint strategy. What I mean by that (because I think about it as a blueprint) is I want to be selling options. That’s the overall theme. That doesn’t mean that I only sell options. That would be a checklist type strategy where I only sell options. No, it’s a blueprint. I want to sell options. Does that mean that I’m only going to sell options and never buy? Of course not! Does that mean that I could buy options? Sure! We’ve often done directional trades where we just buy some option spreads. But blueprint stuff should be your entries every week. It should be the types of trades or the types of ETFs in your account. That’s all blueprint. You target a cluster or a subset or a sector of trading, but that doesn’t force you or pigeonhole you into only trading those things. To give you another example, I’ve had people email me and they say, “Kirk, please review my trading strategy here, my bullet points which lets me know right away that it’s a checklist, not really just like a blueprint. It’s just like this is what I’m going to do. It said things like – Only trade SPY, IWM and FXE every other day.” Well, what if there’s not a trade to be made? Are you still going to trade because your checklist says you’re only going to trade those three things every other day? That’s more of a checklist type strategy that actually hurts you versus having a blueprint that says like, “When possible, I’m going to trade one or two or three of these seven ETFs and I’m going to take the highest implied volatility one first. I’m going to take the low-hanging fruit.” That to me is more of a blueprint type strategy where you have a set of guidelines, but there’s some wiggle room in there to make smarter decisions based on what the market outcome is. I think that that type of thought process hopefully can help you as you’re starting to maybe either build or rebuild or improve, enhance your trading strategy moving forward. Use more of the blueprint type strategy, the framework type strategy for doing things. Checklists are really good and when you should use checklist are things like expiration checklist. When you get into expiration week, it’s good to have a checklist of what to go through. You want to remove positions for example that are in the money, deep in the money and at risk of assignment. You want to close things that are profitable and very close or well beyond your profit targets. That’s like a checklist type thing that you can do. Also, position sizing is something that you can do as a checklist. That is either something that’s either yes or no. “Is the position size under 5% of my total risk?” Yes or no?
Pubblicato:
Oct 5, 2017
Formato:
Episodio podcast