"Tarek - Given your response, you obviously understand C2 stats and their limitations. That’s why I was puzzled by your analysis which used those figures - especially after knowing C2 doesn’t support spread credit/debit trading. Also, I believe we have a difference of opinion as to the amount of risk my strategy employs."
You bring up some very valid points. C2 is incapable of handling spreads and I didn’t touch up on that as my purpose of my posts is to understand and to analyze the methodology rather than the execution of the orders. The lack of an efficient spread execution platform will certainly rob you from many good fills depending of course on the speed and the changes in the bid/ask price at the time the order execution and thus, affect your bottom line. So I totally feel with you .
"Though you don’t rely on anyone to feed you signals, you do rely on a strategy that is likely not unique. Relying on signals isn’t much different than this - picking the “strategy” that I think I can improve on, and using my own set of criteria by which to filter it."
I totally disagree with you on that point. The methodology is quite unique and original. Since spread, straddle, and strangle trades all tend to have a winner and a loser side, Pinnacle managed to turn many of those losers into winners and that is quite unique on its own. Anything over win % of 60 on both sides of the same stock, and you have an unusual edge. But when you have a win% stat. of 68, and on so many trades and many years under different market conditions, then there’s something quite unusual about the methodology, with statistical significance that defies mathematical odds. I myself was not expecting these results. They exceeded my wildest expectations, but I will not complain much
The joy of trading, for me, is in how to improve things… and creating the automated processes by which to do so. Eventually (likely by the end of this year), I’ll be using a superset of my strategy to also initiate trades… and at that point I’ll offer my own futures system (open to subscribers). Until then, I’ll continue to make money perfecting broken signals by cashing out of them while they’re still in the green.
And the same holds true for me. Trading can be quite joyful when the trader develops a deep understanding of what it really takes to win consistently simply because trading is like any other profession, it takes time to master it (lots of it), in addition to mastering ones self. However, the learning curve when it comes to successfully trading options is on a level of its own and can be quite steep. The reason is simple; there are many variables to solve in addition to direction, starting with Volatility and ending with T.D. (and 7 others in between).
"C2 is incapable of handling spreads and I didn’t touch up on that as my purpose of my posts is to understand and to analyze the methodology rather than the execution of the orders."
To understand the methodology, you need to look at the underlying trades (which include credit spread instructions) rather than C2 data. The system cannot be auto-traded via C2 due to lack of spread capability. But manual trading is not very difficult - enter in a spread order once a month, followed later by a stop order.
Even with that data, most of the methodology remains hidden underneath. I do these options plays as a result of not being able to trade futures in my 401K/IRA accounts, and I use futures-derived information to select my trade. That includes an analysis of more than a dozen international markets and their volatility, to stave off a replay of the Feb 27th international ripple. All in all, the “meat” of the methodology is atypical, other than the spread analysis itself.
"The methodology is quite unique and original. Since spread, straddle, and strangle trades all tend to have a winner and a loser side, Pinnacle managed to turn many of those losers into winners and that is quite unique on its own…"
I have not attempted to dissect Pinnacle, nor even study it… and spoke out of assumption rather than fact. I stand corrected.
"trading is like any other profession, it takes time to master it (lots of it), in addition to mastering ones self. However, the learning curve when it comes to successfully trading options is on a level of its own and can be quite steep."
Through automation which includes multi-tiered analysis and time pockets, I intend on eliminating the “mastering one’s self” part. In the 1980’s, I started with stock options. I worked across the street from the Pacific Stock Exchange in downtown Los Angeles. I now find the pace of futures (not to mention the quick fills) more suited to my taste, and to controlling risk by “hit and run” profit taking and 24 hour monitoring.