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re: Options Trading Thread
Posted on 12/3/22 at 1:08 pm to Jag_Warrior
Posted on 12/3/22 at 1:08 pm to Jag_Warrior
I found some more discussion on it, and you don't enter into it as an 8 legged trade. You enter into the iron condor first (in the first minute or two of trading), then the double calendars about 2-3 minutes into the trading day when the liquidity starts to get better.
The problem is with the backtesting you use a $5/share stop loss on it, but that stop loss is on the entire position. I'm just not sure if it's even possible to put a stop loss on a trade like that, or if you'd have to do a stop loss on the iron condor and the double calendars separately. But there could be a situation where the iron condor is at a gain and the double calendar at a loss, so stand alone stop losses probably won't replicate what the combined stop loss is supposed to do.
In any event, I did some more tinkering with the delta on the double calendars and the iron condor:double calendar position ratio and got the win ratio up to 96.4% on the backtesting software, crazy. I just don't know how translatable that backtesting is into real life though, especially on a complex trade like this.
The problem is with the backtesting you use a $5/share stop loss on it, but that stop loss is on the entire position. I'm just not sure if it's even possible to put a stop loss on a trade like that, or if you'd have to do a stop loss on the iron condor and the double calendars separately. But there could be a situation where the iron condor is at a gain and the double calendar at a loss, so stand alone stop losses probably won't replicate what the combined stop loss is supposed to do.
In any event, I did some more tinkering with the delta on the double calendars and the iron condor:double calendar position ratio and got the win ratio up to 96.4% on the backtesting software, crazy. I just don't know how translatable that backtesting is into real life though, especially on a complex trade like this.
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