Cycle Trading

[Duma]

Watched an interesting Tasty Trade segment today which featured a baby boomer who was a passive investor in the past and lost 50% of his account twice (2000,2008) just like a lot of us did. He was featured because he is now managing his own $200k IRA and making about 15% a year, which to my surprise Tom said was very good. I really expected the returns to be higher.

There was nothing in the video in the way of how he actually decides which and when to put on a trade.

Here are a few of the key points from the video.

* Spends about 2 hours per day trading, studying

* Holds about 25 positions (max 1% each of account) and makes about 1,000 trades a year. This is about 4 per day. (Pretty active trader to me for only 15% return)

* Trades credit spreads, strangles, iron condors and rolls out positions a lot.

* Always uses a 50% profit stop. (Done this a lot myself)

* What Tom really liked about the strategy was that it is repeatable and scalable. (Never really thought of this before, but I certainly see the logic. I am thinking about this now in my case).

* Watches delta's to help define/reduce risk.

* Stocks he trades are very correlated to S&P. Looking now for other investments that are less correlated. (This is why I usually just trade TQQQ and SSO since most stocks just follow market).