Remove | Item | Quantity × Price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|

Your cart is empty |

Jack Schwager: How were you able to make consistent gains trading options?

John Bender:To make money in options, you don't need to know what the price of a stock is going to be; all you need to know is the probability distribution. If the Almighty came to me and said,"I won't tell you where IBM is going to be 1 month from now, but you've been a pretty good boy, so I will give you the probability distribution", I could do the math....

John Bender of Soros Fund Management & Quantum Fund from "Market Wizards" by Jack Schwager.

## EdgeAnalytix's paradigm:

### ..On Backtesting....

Minimize curve fitting and over-optimization by using 2-3 filters at most. Each filter has to have a significant effect on the backtesting profile. As an example, if adding filter "x" changes the average pnl of a backtest from $10 to $15 and another filter "y" changes it from $15 to $16, then X is retained for further consideration while Y is tossed out. Once a set of filters is completed it is then subjected to further tests such as walk-forwards, etc.

Evaluate the value of a filter by comparing it to a "baseline fiilter". As an example, if we are backtesting a moving average strategy using a long at-the-money butterfly, we would initially backtest a daily butterfly purchase then compare it with the moving average filter.This comparison "somewhat " isolates the butterfly spread vs. filter performance.

### .. On Scanning....

Unlike most scanners that focus only on option data such as implied volatility, EdgeScans uses technical indicators such as RSI, moving averages to match a probability distribution of the underlying with an optimal option strategy. Now, traders can use EdgeScans to discover explosive chart setups for long gamma trades, or soon-to-be dormant markets fit for short premium strategies. A list of tickers that satisfy your criteria are texted or emailed to you throughout the trading day. Email us for pricing.