To expand on my recent post. John will definitely correct me or explain it better if the theory is correct as these are his systems, but… The bearish butterfly thrives off of large market moves in the beginning of the trade. But if you move quickly under the market in a environment that is knowingly creating 20 point swings in a day then you are going to do yourself a disservice. The trade gets whipsawed and you lose in either direction. by being slow on your rolls or adds then you allow the crazy market to fall back into your position then flatten your trade or exit. If the market continues to skyrocket away from you then you were definitely better off not adding. I personally am in April still due to late entry and very slow add after 1040 was breached. finally rolling today and holding max loss at 1110 this will still allow the market to fall and easily hit profit target. The late adds allow you to buy the butterflies cheaper and instantly give you a bigger hump behind the market. Sometimes a position out of the money that has profit in it if the market moves make faster and more money then always trying to keep high theta at the money/ spot price. As a disclaimer I trade M21 which changes the game for me. but before I traded individualized plans for different months I have always made nice profits with slow add BB trades. In general I liked to let the market sit for 2 to 3 days before adding and definitely always bought into up day and up 5 minute bar. I hope I explained things better. I draw things better rather than typing them.
This forum is for students of the Bearish Butterfly trading strategy to share information.
Why RUT is rising aggressively?
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