Trading Desk: The Trader’s Edge

Some options traders like to downplay the importance of dependability or “win rate.” They come up with all kinds of numbers like George Soros only hitting 30% of his positions or world-class funds barely doing better than a coin flip. They say it’s all about the percentages: do the wins make enough to make up for the losses?

They aren’t living in my High Octane Trader world where there are no losses since the end of January to require compensation. That’s a 100% win rate. It’s possible. We’ve done it for the last six months.

That’s 23 profitable trades in a row. Average gain: 16.83%. Even if you just grabbed ONE of those trades and skipped the rest, the odds suggest that you beat the S&P 500 by at least a couple of points.

Sooner or later, the streak will end. For now, we’re on top of our game. The streak won’t stop until it stops. And once we’ve caught this kind of lightning once, catching it again gets a lot easier.