Bearish butterfly guidelines

Discussion in 'General Discussion' started by Steve Knoxville, Jul 10, 2018.

  1. Steve Knoxville

    Steve Knoxville New Member

    Hello, the guidelines for the Bearish Butterfly of John Locke are very strict.
    You have to make adjustments based on a reference point of your lowest butterfly.
    For example, ref point 600, add 2nd butterfly when the market is past 640 (+40 points).
    Do these intervals of 40 points lets say, still work for the current market price? Because the RUT is now at 1700 compared to 400-600 a few years
    back (in 2007/2008) when the strategy was created.

    Does someone still trade the BB now profitably with the same rules?
     
  2. status1

    status1 Well-Known Member

    I have not traded the BB but I have seen his presentation
    I am not sure where you saw the 2007 presentation but here is a more recent one with 2014 prices
    https://www.smbtraining.com/blog/bearish-butterfly
    So it looks to me like he has the same rules
    This trade relies on the pull back so it's up to you to decide if this strategy is suitable for your trading style
    There is no law that is stopping you from modifying the trade to suit your style as long as you understand how it works
    That's just the basic outline but I am sure he has more details on the adjustments nuances if you take his course
     
  3. ACS

    ACS Well-Known Member

    The rules will still work because even though the index price is much higher, the daily movements are still fairly similar.
     

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