Randomwalktrading review

[status1]

That technique for getting a "good" price is a gimmick

I understand it's a gimmick and I am sure it works well when the price goes just low enough to get filled on a long call and than it goes back up
That would be good in case it gaps down for some reason and than recovers It's not going to be filled at better than the mid it's just better for the trade if after it was filled it moves in your favor
It's kind of like when Steve G places a BWB order and places the price much lower than the bid and waits for the market to come down to fill his trade price

Of course if the market keeps going lower it will hurt the trade but at least you got in at a lower prices so it may be easier to adjust and recover
That's the main thing I was hoping to learn

On the other trades he was reviewing he had a lot of adjustments and one of them he was planing to close today on the last day of expiration which I don't really like because you could have to deal with early assignment which is why I mainly trade with SPX

 

[Chuck Moore]

If you're looking how to adjust and recover you may not learn much. As I said, they were slow to adjust, meaning they let it get into trouble expecting the market to reverse based on the probabilities established at entry. That, IMO, is way too late which may cause a bunch of other adjustments to compensate and before you know it you've got a structure you may not be familiar with.

I prefer setting up a trade where I don't have substantial downside risk, for example a BWB or Condor with $25,000 of risk with a profit potential of $1 or $2K, so I don't have to adjust too much. And I don't depend on probabilities...a lot of that theory is based on reversion to the mean which doesn't happen in trending markets...I'd rather have a plan on when and where to adjust based on what the market is doing and my own risk tolerance.

 

[status1]

Thanks for the advice

 

[Marcas]

I drop my 2 cents (market was good for me today - I was lucky).

I’m familiar with Random Walk. Not a paid member but from time to time I have access to video recordings. I also purchased some materials from Ed.
I do not follow RW trades though. For what I remember there was a setup I liked where you put uphill flies on both sides and wait for the market to move. I think Ed presented this on Areomir as well. Don’t spend much time on RW website and am not aware of any issues.

Ed also comes from Dan Sheridan’s ‘stable’, which it is a warning sign. The reason I get involved (so to speak) anyway is that his trading/teaching is influenced by Scott Rubble and he had some of his materials for cheap.

Is RW worthy the time, money and effort? It depends. In my case I don’t look for sources to follow to make money (although I do not mind). My primary goal is to learn. If I was exposed only to DSheridan's teachings (speaking in very broad term, not at Dan himself) I’d be very kin to expose myself to RS.

Said that, I don see RW as a perfect place. I agree with what Chuck More said.
Chuck: That technique for getting a "good" price is a gimmick
Status1: I understand it's a gimmick and I am sure it works well when (…)

Status1, I guess you do not understand. What Chuck means, all about this technique is for show only - many educators do the same (or maybe I’m missing something).
Just stop for a moment and think how orders are filled. Price is a price, you can wait for price to come to your level or use price at hand. The main thing is not the technique but to know where the price is. I believe Rubble had a presentation about it lately. If you know the price you can make better decision, if you don’t know how to find a price you may use some technique that makes you feel good.

I understand your disappointment after contact experience with RW. It is hard to run company single handed (I don't konw, I'm guessing) and I agree with you that one expect better from a bussiness, especially right after making a promo presentation (I didn’t see it). If you are looking randomly for some learning sources with good customer experience – you may skip over RW, if you are targeting RW for specific reason – be persistent.

I do not recommend RW nor try to discourage you. You should know better what you are after.

 

[status1]

Thanks Marcas for the comments
I understand what Chuck Moore was saying but I don't think it was just for show otherwise he would not have placed the conditional order
The mid price is still the mid price it's just a way to approximate what that price is going to be when the market moves lower

Most of the time the way I saw it presented here is the order is executed when the underlying hits a certain level than you add 10-15 cents to the limit of the ask price i believe to get the spread filled Most of the time that is used as a stop loss so you don't really care what the price of the spread is you just want the trade closed

This one is done directly on the spread price so it may or may not fill depending on how low the market goes so that is why he estimated where the market may drop and adjusted the spread price accordingly otherwise it's just a guess of what price it may fill at a certain market level This would be done as an opening trade so it means you saved a little on the entry price not that you got filled at the better than the mid price

Let's say the price before trading opens is $1.60 for a $10 wide but with this technique you can buy the same $10 wide for $1.20 It's still a mid price it's just at a lower level and that's pretty much what happened Not sure if he actually got filled but his prediction came pretty close
In his presentation yesterday he set up a RR on AAPL and the price for the $10 wide was $1.63 now I see the price as $1.22 at the close but I think it went a little lower during the day so I think he got filled on that so he saved about $200 on his entry price otherwise he would be looking at a -$200 loss if he would have entered at the original price

 

[SergB]

Not sure if he actually got filled but his prediction came pretty close

This is where Paper Trading comes into play. He will get a fill in the paper trading and will send an alert that the trade is official, but you may not get a fill at that price and as often happens the market reverses (today we also had a some reversal). At that moment you left pretty much with choices: start chasing price and get the fill much worse; use different strikes to get the same fill (and your position will be divergent from the official) or skip the trade all together...

 

[status1]

Well if the trade reverses after it was filled meaning going back up that would be a good thing but I understand what you are saying

I would probably either wait another day to see if it gets filled otherwise I would skip the trade I am mainly interested in the adjustments as these could be used with other strategies as well If I knew how and when to adjust than the actual opening fill would not be that important because I could manage the trade from that point

 

[srk]

If you're looking how to adjust and recover you may not learn much. As I said, they were slow to adjust, meaning they let it get into trouble expecting the market to reverse based on the probabilities established at entry. That, IMO, is way too late which may cause a bunch of other adjustments to compensate and before you know it you've got a structure you may not be familiar with.

I prefer setting up a trade where I don't have substantial downside risk, for example a BWB or Condor with $25,000 of risk with a profit potential of $1 or $2K, so I don't have to adjust too much. And I don't depend on probabilities...a lot of that theory is based on reversion to the mean which doesn't happen in trending markets...I'd rather have a plan on when and where to adjust based on what the market is doing and my own risk toleran

On your typical BWB (lets assume on the spx), what is your DTE, size of the butterfly (upper long (call side if iron butterfly) size and lower long (put side if iron butterfly) size) , and where do you place the short strikes in relation to the ATM price ?

Regarding adjusting the BWB, i agree with your philosophy that some adjustment needs to be made when the price reaches the short strike. Depending on the market circumstances, and my own flawed technical analysis, I have done one of three actions, depending on the DTE---- roll the butterfly down, roll the lower longs up or roll the upper longs down. I have found the easiest and least commission intensive is to roll the upper long down. However if the implied volatility has shot up from the time of opening, then rolling down the entire butterfly is a good option too.

 

[Marc1]

It's a shame Ed closed down his library of trade journeys. It is really informative to see how he builds up a trade from a singular Venus or Debit Spread. It's a trading philosophy I had not seen from anyone else, and I have been trading for well over 30 years...

 

[srk]

There should be an industry standard for all options advisory services to disclose their trading performance (including spillage and commissions).

Lot of these services give either the paper trades (without spillage) or without commissions, and some of them dont disclose any of their past performance or "close" the ones which are not doing well, and only disclose the ones which are doing well.

It is a quite sad state of affairs, and a lot of early small traders fall prey to it. Especially in the setting of "high probability trades" which do well for a while and then dont do well depending on the unfavorable market circumstances, and then lose the proverbial battle of bulldozer against the penny pickers.

It is quite illustrative to look at the "iron condor advisories" which did well for several years, and then got wiped out, and there are very few left now.

 

[status1]

As I said, they were slow to adjust, meaning they let it get into trouble expecting the market to reverse based on the probabilities established at entry. That, IMO, is way too late which may cause a bunch of other adjustments to compensate and before you know it you've got a structure you may not be familiar with.

To your point he had a trade in NDX that he was reviewing on Thursday that expired this Friday Not sure when the trade was placed but the first put debit spread was placed at 10700 I am guessing that was around the beginning of June when NDX went to the low of 11k he than added a put credit spread to turn it into a short fly and lock in a loss of -2250 than added a fly to turn it into a long fly with a loss of -3000 than not sure if it was at the same time or later he added a long call at 12450 some 1700 points away but he never closed the initial fly I guess there was no point to close it at that point since he already locked in the loss and maybe thinking it would come down again to that area but that means his indicators are not working too well or ignored what the indicators were projecting

He added another fly and managed to make a profit but had to wait until the last day of expiration which is cutting it to close IMO
He also added another call debit spread at the 13400 for 12 Aug in case the one that expires starts to loose money on the upside to kind of roll the losses further out in time

I was supposed be on another webinar at 11AM today but it doesn't look like that will happen probably because I am not on the 2 week trial and that first webinar was maybe just a teaser to get me to subscribe but I am not all that enthused after the problems with the website and the way the trades are handled

 

[SergB]

To your point he had a trade in NDX that he was reviewing on Thursday that expired this Friday

I was in three trades (SPX, RUT, NDX) expiring Jul-22. All three would suffer the maximal loss, I had to do adjustments myself to limit the loss to some extent. It did not look like Ed offered anything to minimize loss if the settlement will be in the "valley of death". I played with small margin to learn the trades and the loss is still unpleasant. If I played with the margin in original trades (about ~5K), that would be painful.

 

[Marcas]

It's a trading philosophy I had not seen from anyone else,

This is true and exaggeration.

True bc it is a 'philosophy' of trading. Those looking mainly for some signal to place a trade are often missing the whole point.
I was thinking about it and leaning to opinion that new traders are mostly deaf to talks of practitioners of this 'philosophy trading'. They are simply not ready, dont have necessary experience to grasp the full meaning. All they sick and able to to grasp is simple 'rule' to win the trade. I think this is fine, just an unavoidable phase in trading development. Unfortunately many stop right there. It's also part of finding one's own style but only small part.
Ofc this is very general point of view. Each case is different.

Exaggeration, bc there are available sources for retails other than RW. I do not know details of RW trading but from Aeromir's presentations and few class recordings I've seen, I think RW is in a spot between 'rule based trading' and 'philosophical trading' or 'zone trading' - I don't have good name for any of those methods. Sources I mentioned are not as easy to step on as entry level trading (regardless of time factor - if one deas the same thing for 15 years and not advancing, he is still on entry level). Also there are many different styles of this 'philosophical trading', or let's just call it trading, and it requires time to practically figure out waht suits you.

 

[status1]

If I played with the margin in original trades (about ~5K), that would be painful.

I guess with 100k paper account loosing 5K is no big deal
Seems like the idea of limiting risk by adjusting the trade got lost along the way or that only works when the market is in your favor

Personally I would not have traded NDX because it can move hundreds of points in a day even SPX and RUT can easily get out of hand in this bear market
The bigger the index the harder it is to control IMO

 

[srk]

I guess with 100k paper account loosing 5K is no big deal
Seems like the idea of limiting risk by adjusting the trade got lost along the way or that only works when the market is in your favor

Personally I would not have traded NDX because it can move hundreds of points in a day even SPX and RUT can easily get out of hand in this bear market
The bigger the index the harder it is to control IMO

I have been getting better fills on the NDX than the RUT. For the RUT, the lower volume is making the market makers want more and I typically lose about 5-10 cents/contract on a butterfly spread fill.

SPX obviously is the best with fast fills very close to mid price. However, the higher implied volatility of both RUT and NDX makes them appealing for an option seller.

Citadel in particular has been filling most of my trades on the NDX instantaneously , wonder if they have some agreement with the Nasdaq on this.

 

[status1]

While you may get good and fast fills that may not protect you in a gap down or fast moving market unless you predicted the direction correctly

 

[Mark17]

It's a shame Ed closed down his library of trade journeys. It is really informative to see how he builds up a trade from a singular Venus or Debit Spread. It's a trading philosophy I had not seen from anyone else, and I have been trading for well over 30 years...

I didn't know he had a library of trade journeys, but I agree in that I've seen a few spectacular presentations by him over the years where he has gone over "layering" trades. It made me want to buy the Layering course. However, I doubted whether or not it was repeatable. It's easy to take one historical trade and present it brilliantly. Whether you can count on a similar series of events is another story altogether, and what % of the time a similar series of events happens is something I see very few people focusing on.

 

[Mark17]

That technique for getting a "good" price is a gimmick. It doesn't work the majority of the time and when it does, how do you know that was the best price at that moment? It's always in the Market Makers hands. You could have given up .05 or .10 on the displayed Mid (which isn't always what the Market Makers are willing to sell/pay for) and gotten filled on the trade you liked at the time. Most of the you have to wait, sometimes days and even when you do get hit on your "good" price it may be where the market doesn't fit your desired trade structure anymore. If you think the market is going to come back to your "good" price why don't you put on a trade that will make money on that move?

...

There is a lot of Scott Ruble material on the site because he was one of the founders of Random Walk and left due a disagreement on how to move RW forward.

I agree with good prices as gimmick. As I continue to get burned time and time again, I slowly am tempted to believe more and more that entering a limit price at the mark with some offset is the best way to go.

I've wondered about RW for a long time ever since the mysterious books by JL Lord that were sold for hundreds of dollars. I thought SR was the founder/owner? If he left then did ET buy the business from him or are there still original co-owners left?

 

[Mark17]

Ed also comes from Dan Sheridan’s ‘stable’, which it is a warning sign. The reason I get involved (so to speak) anyway is that his trading/teaching is influenced by Scott Rubble and he had some of his materials for cheap.

What do you mean by the warning sign, Marcas?

 

[NoMoWork]

I too am unimpressed with his web site. Most of the content is very dated. Same issue with emailing their Admin email address, no one responds. Ed seems like a nice guy, buy most of his trades are hard to follow because he seems to get lost in the weeds with all the possible adjustments he offers. I've subscribed but will most likely cancel soon if I can figure out how to do that.