Last Nov. 22nd, I had the great opportunity to present my strategies at the Las Vegas Traders Expo. I had my wife with me who sat at the back of the room to tell help me with the lights, sound and overall technicals of the presentation. At the end of the seminar, he was pleased to see people coming out with nice comments, but one in particular caught her attention: “this is too good to be true”.
At first the comment brought a smile to my face because I know very well that it IS true, my strategies have given me returns of 30% in 2006, 70% in 2007 and this year promises to be above 40%, even with the decline of 50% in the major indices. Upon reflection, however, I had to ask myself, how did I fail in convince the guy that made the comment, that my claims are legitimate and that he too, could benefit from my experience of the last three years. I offer my own experience as evidence that the PCCRC techniques I use should work for anyone, particularly because I use very stringent rules. I also considered that even stringent rules may not be sufficient in real life, so I offered the results of a paper trading account which I started a 1 1/2 years ago, and traded real time under the scrutiny of the participants of my private group. Still, it seems like none of that is not enough to convince people that this stuff works, and it is going to produce results practically all market conditions, keeping you out of dangerous markets, if you follow the rules.
I would understand that someone would have misgivings about trying my techniques if I asked for an upfront fee of thousands of dollars, like many “trading education businesses” do, but I have described my techniques in much detail in numerous articles that date back to 2005 in the present blog. All you need is the determination to try the strategies out, without spending one penny, in a paper trading account, or even using back testing software such as Optionetics’ Platinum. You can make your judgment without risking one penny. If you still think that you need a helping hand, then you could join my private group and have access to dozens of video tutorials that describe visually, with examples that I entered real time for my paper trading account, for a small contribution, so that I can pay for my own costs. I even have a weekly webinar with a selected group where I describe the entries to my paper trading account, real time. Yes, once a week, for one hour, that is all it takes to keep the paper trading account going with good returns. I would say that this is perfect for amateurs that have a regular job and that are not ready to go into trading as a profession.
They often say: “If it is too good to be true, it probably is”, as a phrase to forewarn people about the dangers of con artists that would take your money and run. In my case, you are risking nothing, and could in fact gain a lot from the experience. If you discover, eventually that my techniques are nor for you, you can certainly benefit from the in depth look at the effect of the Greeks on option pricing, for example. You’d learn a lot about risk management, and even the Elliott wave theory.
There is a scene in the movie “Pay it Forward” in which a journalist has his old car totaled in front of his eyes at the scene of a crime. A lawyer, of all people, walks up to him and gives him the keys to his brand new, sports luxury car. In disbelieve, the journalist asks why would you do this, are you out or your mind? he simply could not believe that someone would be that generous. The lawyer, with a very cool demeanor replies: “Just Pay it Forward”. Believe in the generosity of others, because if you do, then it won’t be so hard for you to do likewise, and if you do, then there will be more generous people and less evil people willing to kill, steal or cause harm to others. That, I don’t think it is too good to turn into reality.
P.S. If you'd like access to a streaming video of my presentation at the Las Vegas Trader Expo, just send me an e-mail at Paperprofit1@mac.com
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7 comments:
Hi Juan,
In order to use PCCRC strategy, what softwares are needed and also I dont't know much about EW analysis. How much impact will that have for using PCCRC.
Thanks,
RV.
I would recommend Optionetic's Platinum (check Optionetics.com). However, you may find it expensive. The thing is, you can backtest the PCCRC or any strategy for that matter, and see what kind of results you get under different market conditions.
On the other hand, I strongly recommend the Think or Swim platform. You need a broker that can handle the PCCRC in one single ticket, anyway, and TOS does a great job of it. In addition, TOS has many capabilities under the Analyze tab, including risk graph and "what if.." conditions such as artificially changing I.V., price and time to expiration to see what to expect.
I DO not think you need to learn the Elliott Wave to theory to trade PCCRC, in fact you don't need much technical analysis at all. However, it was my knowledge on Elliott wave that let me see that the bear market was at hand, and force me to think of a trade with a bearish hedge. You should have at least a working knowledge of the Elliott wave, whatever option strategy you use, but it is certainly not a requirement with the PCCR.
Dear Juan,
I would just like to leave an encouraging note to all who visits your blog. I have been trading options for almost 2 years without real advance. Sometimes I win, sometimes I lose.
Like all traders, when we are trading with our real hard money, we sell when there is little profit (and boast about it) and we hold when there is huge loss (and keep quiet about it). There is no way a non-professional can trade and profit consistently as we simply do not have the tool and gut to do it.
Trading will return you to where you started as you can make 100 correct guesses and 1 wrong guess will kill years of hard work. This is exactly what happened to you on your AAPL trade years back, right? I traded credit spread, debit spread, gaps, short, long and you name it, I did it.
It was until when a friend introduced your blog to me that things started to change. I studied in depth the way PCCRC is structured. My I can tell anyone in the business that this strategy will not fail as long as you keep the ROE intact. To me there is actually only 1 ROE in PCCRC, and that is LOW IV (not because of M&A though).
My way is I will only play stock when the IV hits 30% in the back month, and the bid/ask spread is no more than 20cts. These stocks are always available; we just need to some patience to find it. Then I will go deeper into confirming the ratio. Although you advised 1122 ratio, I sometimes do a little adjustment to see which of the Greek I would like to put more emphasis on. PCCRC is a 3 horse pulling a carriage like you taught me. But sometimes Theta and sometimes Delta may be the stronger horse and the other 2 are back up.
Generally, I play 1122 (sometimes even 1133 if I am aggressive and confident) when stocks are 52wks high with good forecast. (This is your favourite play, right?) Sometimes I will play 2233 or 3344 when the stock has not been moving for 3-6 months period.
I have played PCCRC with real money for 4 months. I do not have such a good discipline like you, (10% and 2% rule) because I am really confident when I play PCCRC, and the way it is structured there is no way you can lose 30% of your money. I am currently up close to 140% from my initial 5k investment (now stand very proudly at 12k). As I recollect, I made only 20% a trade a month, and roll it over consistently 4 times, I landed at 140% after compound. This strategy is very scalable! If can do it with 10k, you can do it with 100k.
To me, to most important thing is the amount of time I spent on trading the market is much shorter, typically only 1 hour after market start and another 1 hour during lunch time when I am placing orders. The rest of the time, I just log in and see if I need to do any adjustments to the ratio, no more than 20mins. I used to worry about the stock moving adversely against me until a point where I cannot sleep at night. Well, the past four months I never had a problem with it.
I would like to say a big thank you to you. Things have certainly changed for me.
For the rest, please take heart and learn PCCRC thoroughly and put it to your trades, do not rush, do not fear. See you at the top!
AC
AC, I a proud of you!
I had the same experience of frustration between 2000 and 2004. In a way it was my own negativity that got in the way of my confidence.
Back in 2000, I intuitively knew that there should be a structure of options that could allow me to enter large amounts of capital without worry. It took time, but I finally found it in McMilan's book sometime in 2005.
Imagine, since you don't care where the stock moves, you can place 10% of your available capital only risking 2%. That is so much better than buying stocks since you can manage not a lot more than 10 stocks in a portfolio, yet a stock can fall 30% or more overnight, with the PCCRC such an event would be a blessing.
I very much appreciate your post because people DO question the veracity of my claims (I don't blame them, I think the same way). But the good thing about this blog is that all you have to do is read! the strategies are there!
Finally, one word of caution about volatility, which is really high these days. The markets are telling us to stay our. As volatility declines, things will change, but for now finding PCCRC candidates is a difficult task. Also December is notoriously slow, and that will bring volatility too.
Hopefully, the new year will bring out good news in some stocks and, at least in those stocks, volatility will be attractive enough to enter PCCRC's.
Thanks for your comments AC!
Don't forget to Pay it Forward.
Juan,
Thanks for the link to the Vegas presentation yesterday. It makes sense now. I have been burnt real bad by this downturn, to the tune of having lost all my 30K savings in stocks and options. I have a last chance now with 5k and i hope to do it right this time. How i wish i had found this earlier :).
If you don't mind, may i ask,
1. What AC means by 1122, 1133, 2233, 3344 above ?
2. I couldn't find any pccrc candidates meeting the price, volume criteria, let alone the IV/SV threshold. Can you confirm that this is the case nowadays so i can validate if i am on the right track ?
Recording my pledge here to pay it forward.
Thanks much,
Satbir
AC means the proportion of shorts and longs in the PCCRC.
The proportion I use is 1 short for every 2 longs. You may also say
-1c,-1p,+2c,+2p
I have found several candidates lately, but I agree that IV has been too high lately.
If you are unsure of yourself, consider joining my group. I have webinars 2x per week along with all the answers to specific questions you may have. Other members of the group are very helpful too.
All I ask is a small token contribution to pay for may costs.
Everything else is offered as part of the Pay it Forward philosophy.
Send me an e-mail if you'd like to join us.
Paperprofit1@mac.com
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