VTS Community

As I mentioned yesterday it’s a good time to get into another Iron Condor.  We just had to wait for a little bit of price recovery so our center point isn’t too close to a recent low and we’ve done that so it’s time.  My recent questionnaire revealed to me that roughly 20% of the community is following the Iron Condor Strategy so I realize I’m only speaking to a minority with this but there is a slight change in the way I’m presenting the signals.

I’ve added a new column on the far right of the trade signal picture that says “Maximum Stop-loss” marked in red.  There’s a couple things to know about this:


1)  I will never let a trade run past this maximum stop-loss.  It’s set at 50% above the premium collected.  So if we bring in a 3$ credit for the trade the stop-loss would be 4.50$.  Stop-gains are more fluid and depend on the remaining risk, but stop-losses will always be adhered to.


2)  Always use Limit orders for both opening and closing Iron Condors.  Because these are multi leg trades, market orders can sometimes give very poor fill prices so when we open them AND when we stop-loss out of them, always use limit orders and move your price 0.05$ increments until it’s executed.


3)  Remember we are dividing our capital into two parts to make room for having two trades open at once.  So whatever capital you have allocated to Iron Condors, you divide that by 5,000$ and that’s how many contracts you open.

–  If you have 10,000$, divide by 5,000$ and you open 2 contracts

–  If you have 50,000$, divide by 5,000$ and you can open 10

We are also getting back into a long MDY stocks position today.  I know it probably feels like a scary time with markets bouncing around +/- 1-2% daily, but it’s time.

Politics isn’t something we can successfully account for in our investing because of the randomness of it all.  It’s already impossible to know when these sudden announcements will come, but how markets will respond to such unexpected announcements is equally random.  So it’s best to just ignore the noise and trade the math.

Having said that though we are in a more uncertain environment right now so we will definitely pay attention and be ready to move back into safety positions on a 1 day notice.  Staying nimble and being ready to exit positions is the single greatest weapon against extended market drawdowns.  It’s impossible to see them coming ahead of time and if something happens it’s normal to take a hit in the first day or two, but it’s definitely possible to mitigate the damage by exiting quickly and moving to safety.

The questionnaire also revealed by a 3:1 margin that most of you are bearish.  I have my doubts about this market as well, but it’s important to put those aside and just trade the signals as they come.  I try to invest without emotion as if I’m a robot.  The market signals say it’s time to dip a toe so it’s time, regardless of how I feel about it.


Current VTS Total Portfolio Solution Allocations

10% VTS Conservative Vol Strategy  –  Optional replacement for lower risk tolerance investors

10% VTS Aggressive Vol Strategy  –  Optional replacement for higher risk tolerance investors

50% VTS Tactical Balanced Strategy

20% VTS Iron Condor Strategy

10% VTS Discretionary Strategy

Temporarily paused:  VTS Tactical Volatility Strategy


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