After a decade in the markets, I have come to believe in three things…

After a decade in the markets, I have come to believe in three things…

After a decade in the markets, I have come to believe in three things:

1. The options chain acts as a leading indicator for the underlying stock.
2. Trading is like dating in the sense that there are 3-8 reasons that get you in, and 3-8 that get you out.
3. “Last move first,” as demonstrated by the world-renowned chess master Joshua Waitzkin, is the best way to master anything complicated.

The options chain can be a useful tool for traders looking to get a sense of the expectations and sentiment of other market participants. By analyzing the options chain, traders can see the level of demand or supply for a particular stock and make informed decisions about their trades. I see alot of tools that are derived from the same thing. People think they have multiple indicators but the correlation between them is too high and often redundant.

Trading can be somewhat similar to dating in that there are often multiple factors that influence a trader's decision to enter or exit a position. These factors can include fundamental factors, such as earnings growth or valuation, as well as technical indicators and market trends. Everyone should have their own 3-8. And the 3-8 that gets you in, should be different than the 3-8 that gets you out.

The “last move first” approach, as demonstrated by chess master Joshua Waitzkin, involves starting with the most challenging and least understood aspects of a subject and working backwards to build a solid foundation. This approach can be effective in mastering anything that is complex and nuanced, as it allows a trader to fully comprehend the details and nuances of the market and develop a more effective strategy. In the context of trading, this might involve starting with the most challenging and least understood aspects of the market and working backwards to build a solid foundation of knowledge and skills. For me, this goes back to point #1 and weaving volatility skew by tenor into your go/no go trading checklist.