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Is it possible to remove the direction from trading?!?
Updated
This title is crazy enough for ordinary traders to be dismissed and not read!
Yes, it is possible to remove the direction from trading by using directional neutral strategies. These strategies are designed to profit from both up and down markets, regardless of the overall trend.
One common directional neutral strategy is to pair trade. This involves taking two positions that are expected to move in opposite directions. For example, a trader might buy a stock that is expected to outperform the market and sell a stock that is expected to underperform the market.
Another common directional neutral strategy is to trade volatility. This involves buying and selling options or other derivatives that profit from changes in volatility. For example, a trader might buy a put option on a stock that they believe is overvalued, in anticipation of the stock price falling.
Directional neutral strategies can be more complex to implement than traditional directional strategies, but they can also be less risky. This is because they are not reliant on the market moving in a particular direction.
Here are some examples of directional neutral strategies:
Long-short portfolio:
This involves holding a portfolio of both long and short positions in different stocks or sectors. The goal is to generate profits from the relative performance of the different stocks or sectors, regardless of the overall market direction.
Market neutral portfolio:
This involves holding a portfolio of assets that are expected to have a low correlation to each other. The goal is to generate profits from the relative performance of the different assets, regardless of the overall market direction.
Volatility trading:
This involves buying and selling options or other derivatives that profit from changes in volatility. The goal is to generate profits from the movement of volatility, regardless of the overall market direction.
Directional neutral strategies can be used by a variety of traders, including hedge funds, institutional investors, and retail traders. However, it is important to note that these strategies can be more complex to implement than traditional directional strategies. It is also important to have a good understanding of the risks involved before using directional neutral strategies.
Here is 2 example of such trade Ideas published publicly and generating +55%(TLT), and +201%(QQQ) so far! Both trades were based on the Long Strangle Option strategy at the right time to benefit from the upcoming volatility in the market!
But How did I learn to do that?
After reading 3 important books:
I realized the trading strategies of professional traders like Ed Thorp, Nasim Taleb, and Jim Simon have some common features. They do not predict the direction of the market but instead, focus on finding and exploiting mispricings. They also use non-biased strategies.
Read these 3 books, and it will unlock the opportunities in the market that you can not see before reading these books!
If you do not like mathematics! forget this post!
Yes, it is possible to remove the direction from trading by using directional neutral strategies. These strategies are designed to profit from both up and down markets, regardless of the overall trend.
One common directional neutral strategy is to pair trade. This involves taking two positions that are expected to move in opposite directions. For example, a trader might buy a stock that is expected to outperform the market and sell a stock that is expected to underperform the market.
Another common directional neutral strategy is to trade volatility. This involves buying and selling options or other derivatives that profit from changes in volatility. For example, a trader might buy a put option on a stock that they believe is overvalued, in anticipation of the stock price falling.
Directional neutral strategies can be more complex to implement than traditional directional strategies, but they can also be less risky. This is because they are not reliant on the market moving in a particular direction.
Here are some examples of directional neutral strategies:
Long-short portfolio:
This involves holding a portfolio of both long and short positions in different stocks or sectors. The goal is to generate profits from the relative performance of the different stocks or sectors, regardless of the overall market direction.
Market neutral portfolio:
This involves holding a portfolio of assets that are expected to have a low correlation to each other. The goal is to generate profits from the relative performance of the different assets, regardless of the overall market direction.
Volatility trading:
This involves buying and selling options or other derivatives that profit from changes in volatility. The goal is to generate profits from the movement of volatility, regardless of the overall market direction.
Directional neutral strategies can be used by a variety of traders, including hedge funds, institutional investors, and retail traders. However, it is important to note that these strategies can be more complex to implement than traditional directional strategies. It is also important to have a good understanding of the risks involved before using directional neutral strategies.
Here is 2 example of such trade Ideas published publicly and generating +55%(TLT), and +201%(QQQ) so far! Both trades were based on the Long Strangle Option strategy at the right time to benefit from the upcoming volatility in the market!
But How did I learn to do that?
After reading 3 important books:
- The man who solved the market (Jim Simons)
- The man for all the markets(Ed Thorp)
- Fooled By Randomness (Nassim Taleb)
I realized the trading strategies of professional traders like Ed Thorp, Nasim Taleb, and Jim Simon have some common features. They do not predict the direction of the market but instead, focus on finding and exploiting mispricings. They also use non-biased strategies.
Read these 3 books, and it will unlock the opportunities in the market that you can not see before reading these books!
If you do not like mathematics! forget this post!
Note
Another Example Published on August 25 Straddle for TLT with +68% profit Note
Another example! Note
+100% in less than 1 day without betting on direction!Note
+67% without predicting the direction Note
+51% in 1 day without predicting the directionNote
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+85% Note
+22% in 1 day Note
+14% in 1 day Note
+21% in one day and the show must go on! Note
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+31.5% in 1 day without betting on direction! Note
GLD+101% in 1 week without betting on Direction Note
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A review of the above posts! Note
I did it again Note
ARKK +32% Note
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QQQ Note
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+65% profits in 4 days Note
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