The 10 commands of trading
- Never trade alone, always trade with others.
- Avoid undesired behaviour that makes you rich.
- Never predict, always react.
- Always plan for three scenarios: up, down and sideways.
- Always know the probability of each scenario.
- Either be exposed to risk as short as possible or as long as possible. Never in between.
- Never trade in unpredictable securities.
- Always trade the expectation of the expectation ad infinitum.
- Avoid acting too rational or too stupid. Always trade in the zone between rational and stupid.
- Use as few technical indicators as possible.
- BONUS: Learn a valuable skill to increase your trading capital
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The Wheel: Bayesian model to select the right stocks and time the selling of puts and calls
The Wheel is a well known strategy for selling naked puts and covered calls. It is called “picking up dimes in front of a steamroller”. The reason The Wheel is described as such lies in the fact that this strategy gains a lot of small winnings that are often only to be lost to one…