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new to the forum, m3 or heart friendly?

Discussion in 'General Discussion' started by will, Oct 27, 2015.

  1. will

    will Well-Known Member

    Hello everyone. I'm a new member to the forum and I have been very impressed with the content on here. I figure I'd ask some advice. Basically I did the sterotypical thing of making a lot of money trading iron condors in a favorable market, just to lose most of it with the recent correction. I took that as an opportunity to learn a lot more about options trading. Read a few books, watched a lot of videos and did some backtesting with option vue. So here I am. I've had some pretty favorable results backtrading the heart friendly, but was considering buying the m3 course from locke. I was hoping someone could give me some real world results or experience comparing these two methods. Thanks any advice is appreciated.
     
  2. GreenZone

    GreenZone Well-Known Member

    Hi Will

    You'll find that the majority of the trading community here tends to primarily use the John Locke trades as their core trades, and maybe one or two others.
    The M3 and Bearish Butterfly trades from John Locke are great trades.

    Other trades you may want to research and backtest are the weirdor and the Rhino, which you'll also find within this community.

    I've seen the Heart Friendly Butterfly course in the past.
    I ran a couple of quick backtests and didn't find that the trade did very well.
    I then moved on to other trades.
    If you've had success in backtrading the HFB, I would be interested in seeing what results you've been getting.
    I don't personally know any traders currently doing the HFB with live trades......which may in itself perhaps say something about the viability of that trade.
     
  3. Andrei

    Andrei Well-Known Member

    I am not very familiar with HFB strategy, but I have tried many approaches (with very mixed results) before I finally found JL's strategies. M3 is just one of several, but it is the foundation to more advanced approaches he is teaching. Once you are comfortable with M3, you may want to expand your horizons to BB, Rock, M21, etc. John teaches how to trade in general and not just individual strategies. Thus if all you want is to perfect one "put-it-on-take-it-off" trading approach you probably be OK with either HFB or just M3. If you plan to add to it and learn how to balance and trade various approaches, you should start with M3 and from there.
     
    TheSpeculator152 and GreenZone like this.
  4. will

    will Well-Known Member

    Thanks for the replies. I did notice a lot of members using locke's systems. Seems to provide real world results. I've watched a few of his videos, and his trades make sense to me. I'll go ahead and get the m3 and start testing it out. Eventually working my way through the rest of them. My goal is to learn how to trade, not just use systems with rules.

    As far as the heart friendly goes, I'll try to post some results. I'll have to make a spread sheet though. It will be all backtesting though, no live accounts.
     
  5. David Stewart

    David Stewart Well-Known Member

    Okay, my two cents, the HFB is a perfectly good strategy, I traded it I think 4 or 5 times winning every time. Although to be perfectly honest I deviated significantly from the guidelines as I don't think trying to follow guidelines in general will be successful. For example one of the trades took place during the "temper tantrum" in 2011 when the FED first talked about eliminating QE. There is no perfect strategy and never will be. That's the only thing that you can take to the bank. In fact I prefer in general selling ATM options which the HFB does. I do sell OTM options also using the Kelly Criterion for my risk control. There is no magic at all with the lockee trades. You either know what you are doing or you don't. I don't trade the lockee trades at all anymore and do perfectly fine. The Lockee strategies are way, way, way oversold in my opinion. If I was a new trader and could go back in time I would sign up for the mentoring program with Tom Nunamaker. He is an unbiased, very experienced and knowledgeable trader with experience with a multiple of strategies and throughout a multiple of market cycles. Lockee is a former used car salesman, does that not raise the warning flags just a little bit? Again this is just my opinion but in all honesty having studied with all these folks, SMB, Sheridan, Lockee as well as others, I think the Capital Discussions mentoring program is probably the best deal out there. I would request either Tom or Jim though as a mentor, nobody else. Again nothing against any of these other entrepreneurs but Tom and Jim are in my opinion more neutral and hence more able to look at the whole picture and guide a new trader along the path to excellence and financial success.
     
    Tps and TheSpeculator152 like this.
  6. will

    will Well-Known Member

    Thanks for the awesome response. I've been studying up on locke as everyone seems to recommend him. I bought the m3 program and figured out the bb by myself. I backtested both of them and decided to go with the bearish taking my profit at 5% which really increased the win rate. I was on the fence about the rock program and m21 program. Lockes trades do draw down a lot in certain situations.
    I've been watching videos on capital and I'm really liking the road trip trade. Similar to an m3, but less fiddling around. I'll look into your advice on the mentoring.
     
  7. David Stewart

    David Stewart Well-Known Member

    Yes, again to clarify, I would recommend JL's M3 program for purchase as I think it is well worth it. But for mentoring and for a more neutral approach then I would consider the Capital Discussion's material going forward.
     
    TheSpeculator152 likes this.
  8. will

    will Well-Known Member

    Have you traded lockes m21 program? He claims 200% or more yearly return. I wonder if anyone is really getting that.
     
  9. David Stewart

    David Stewart Well-Known Member

    If you think that simply following a rule based system will generate those kind of returns than you simply don't get it and hopefully you will get it someday. The financial markets have some of the smartest people in the world playing. Do you really think that a rules based system will beat them? Granted I will give you that being a retail trader has some advantages, mainly the fact that we don't have to trade huge positions to generate profits where as huge hedge funds would change the market drastically by just entering his or her buy and sell orders. For a review of that please see the greek guy (I forget his name) who tried to expose the Maddof scam years ago. There's a documentary on it that is just fantastic by the way. I think his name was Markowitz or something like that. No strategy will beat the market consistently, that is a fact and is an immutable truth. Whatever someone may have gotten on a percentage basis in the past is not relevant today. Too much emphasis is placed on back testing among posters here. It is an excellent technique to practice, but actually has absolutely no relevance to what you will expect to gain in the future. That is simply the reality of the marketplace and will never change. Does anyone here really think that the marketplace is a static entity that can be gamed? Well I'm here to tell you that the marketplace is constantly changing, just look around you, is a recession coming, a collapse in China, an earnings recession in the SPX? No one can tell you the answers to these questions. Technical analysis is useless for these questions. Yes, they may tell us support and resistance but I've seen these numbers absolutely blown thru and I don't take much value in these numbers although like most of us I am aware of them. Lockee strategies looking backwards thru time are simply not at all relevant to what you can expect to see in the future.
     
    Aryan and Tim R like this.
  10. will

    will Well-Known Member

    Obviously you can't follow a rules based system in every market environment, I get that. I figure you start with some simple systems to gain understanding and experience, then move on. Maybe you or someone else could shed more light on what the m21 is, I believe it takes market conditions, volatility and technicals into consideration. I don't think it's rules based, more conceptual. Again I don't have experience trading this system, I was just wondering if you out anyone else has experience with the m21. I appreciate you input and advice.
     
    Last edited: Jan 8, 2016
  11. David Stewart

    David Stewart Well-Known Member

    The M21 is simply using technical analysis to determine entry and exits. That is perfectly fine with me. However I would simply state that predicting market direction is not possible. So if you believe it is possible than go ahead and send JL the money for his guidance on these issues. If you really believe in the tooth fairy than I would simply ask you this: Where is the SPX, or RUT, or AAPL, whatever going in the next 5 weeks? We can all make an educated guess, but no matter what sources I use to make my guess, technical, ATR, Fundamental whatever, I would say that none of us knows for sure. Read Taleb, Sinclair, Connally (The Rotten Heart of Europe) I can go on and on, let me add Aaron Brown (I read 4-6 hours a day) whoever, it makes no difference, nobody knows and no one will ever know. Risk management and position sizing (and luck) will ultimately determine your success or failure in my opinion.
     
  12. will

    will Well-Known Member

    Gotcha. I do believe to a certain extent you could plan your trade around market opinion to try and maximize your trade without completely ruining your position if you're wrong. I mean the road trip trade hopes the market will move back or stay still,so in a way that's opinion, right? Not arguing with you, just picking your brain for info.
     
  13. David Stewart

    David Stewart Well-Known Member

    Of course, you need some kind of opinion, just don't get married to it :)
     
  14. TheSpeculator152

    TheSpeculator152 Well-Known Member

    @David Steward, thanks for sharing your perspectives across posts in this thread. Being new to this domain, I am, just like @will, looking for guidance. That being said, my understanding of the M3 is that it teaches one how to trade by the Greeks instead of blindly following guidelines. That is also what others have recommended here:

    http://forums.capitaldiscussions.co...an-options-mentoring-smb-u-or-john-locke.366/

    Wouldn't you say that's good place to start?
     
    Last edited: Jan 11, 2016
  15. David Stewart

    David Stewart Well-Known Member

    Sure, The M3 is a good place to start if you think that type of strategy will resonate with you.
     
  16. Andrei

    Andrei Well-Known Member

    David, some comments on your assessment of John Locke's approach. (I trade two of his strategies, but not exclusively and some in modified form). I think it is important to be clear about what JL is offering in his approaches to trading. I agree that no "rule-based" strategy can be a "sure winner" all the time. But at the beginning of his M3 presentation John states just that. M3 does not have rules it just has guidelines. I my opinion this is why mastering M3 is very valuable for learning how to trades: it is a framework, not a set of rules.
    I have a similar observation regarding M21, I think JL makes it clear that TA only works because enough people believe that it works and that he does not try to predict market direction, just assess probabilities of certain events. Based on your market assessment design your own trading plan. His general philosophy is that having market opinions can improve returns for Theta positive strategies but it is not at the core of his approach.
    Finally you comment in one of your other posts about John being a "former used car salesman" is completely uncalled for. I think John is very open about his approaches and he is unique in opening up his trades to all traders in his Monday morning updates including T-Logs and all.
    Thus there is no "secrete sauce", you can choose to pay for his mentoring, pay for his courses and find another mentor or just collect free materials from this site and youtube and attend his Monday's updates for free.
     
    RayM, Gail, Capt Hobbes and 4 others like this.
  17. Tps

    Tps Guest

    everything david said is true, so no need to jump down his throat.
     
  18. Andrei

    Andrei Well-Known Member

    I don't think my comments qualify as "jumping down anybody's throat". And I don't think that "everything David said is [entirely] true". But I am sure he appreciates your vigorous defense..
     
  19. Tps

    Tps Guest

    Andrei - you've had a tough month. Go take a long walk on the beach and get some fresh air.
     
  20. Andrei

    Andrei Well-Known Member

    Thanks, nice to know you care...
     

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