
Riskcuit Strategy
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Lesson 6: Conclusion

Lesson 1: Introduction
I can remember it like it was yesterday, I first learned about capital markets over 10 years ago when I was 18, and was instantly hooked on the idea of trading. I then spent the next few years losing money as I tried to learn everything I could about trading. I bought every book I…

Lesson 5: Kurtosis – Like Volatility, But Different
Kurtosis is the last characteristic of distribution we will discuss for this course. To start, kurtosis is very similar to volatility, in that time is a major component in using it. If you remember back to our lesson on skew, one of the things we talked about was how, if you use a take profit…

Lesson 4: Volatility – Option Trader’s Best Friend
Volatility is simply the measure of how much prices move over a given period of time. It’s most often calculated by finding the standard deviation of open and close prices for that period of time. It can also be calculated other ways like finding the average size of highlow ranges over a period of time,…

Lesson 3: Don’t Skew Yourself
Skew is used to measure how symmetric or asymmetric the distribution of x is. And in a normal distribution, the skew is 0, meaning that the distribution is perfectly symmetrical. Whether retail traders realize it or not, skew is essentially what they are always betting on whenever the jump in the market with a stop…

Lesson 2: The Null Hypothesis
Whenever any speculative opportunity is presented before you, there is a builtin null hypothesis regarding that opportunity. That null hypothesis is, the opportunity is most likely “fair” or “efficient”, meaning that over time, you should not expect to make or lose money if you continued to take this opportunity indefinitely. Your goal as a trader…

Rolling a Trade – A Simple Mean Reversion Strategy Management Tool
One thing very common in the world of options trading is this idea of “rolling” your trade. You can either roll your trade by changing its strike, duration, or both. And the purpose of rolling the trade is to reposition yourself to increase your chance of profit again. Or keep the dream alive that the…

How to Use a Trading Model And Profit From Errors
I have written about it many times in the past but never as clearly as I want to lay it out here and it’s how to use a model in order to trade. Many people on Twitter will often post about “entry models” or “smart money” models but can’t actually articulate what the model is.…

Strategy Terms and Definitions
This post is to provide the terms and definitions you will frequently see in regards to our trading strategy.