1. The Great Debate The Path to Riches Trade Delta
By Ken Hodor

2. Common Comparison Delta Theta With scaling you only need to be close
Make money
With scaling you only need to be close
Make money

3. Difference Comparison
Delta
Theta
0.30 * 1 per day or greater
>5 times more bang for $
$85 margin
Capable of using more capital more efficiently
Make more money…quicker
@30 delta only per day
$200 margin
Make less money

4. Trading Delta Start trading Delta on stocks and options
Excellent preparation for trading
Forex 100 to 1 leverage
Futures 20 to 1 or higher leverage

5. Turn $10,000 into $1 Million
How I Made One Million Dollars Last Year Trading Commodities
By Larry Williams
Traded Delta

6. Jesse Livermore Trading Rules
Enter trade in direction of the general market
Only when market confirms direction
Exit when trend has ended
Never average down
Never meet a margin call –get out of the trade
Go long when new high…sell short when new low.

7. Improve Odds Stochastic 80% RSI 80% Scale into position
All at once is arrogant –no one knows the future
Use 4 scales
However exit if violates longer-term trend
Use emergency exit

8. Stochastic trading
From:

9. GG 46 July ‘10 Call

10. GG Delta vs Theta Trading Results

11. Expectancy Trade Delta Trade Theta Greater than 1 Less than 1
Expectancy (Retail) = 1.38
Expectancy (IRA) = 2.36
Expectancy (Forex) = 10.2
Less than 1

12. The Expectancy Formula
From our game example:
Our Winning Percentage (W) = 33%
Our Losing Percentage (L) = 67%
Our Average Profit (P) = $250
Our Average Risk (R)--Loss = $100 W P
(0.33) x 250 E = - L - E =
0.67 R
100 - E =
0.83
0.67 E =
0.16
From Rick Edwards Expectancy presentation on XSProfits.org

13. IRA Probability of Win 82% Average Win $ 378.00 Probability of Loss$
Probability of Loss
18%
Average Loss
$ (122.00)
Expectancy
2.36

14. Retail Trading SSO Probability of Win 73% Average Win $ 84.00$
Probability of Loss
27%
Average Loss
$ (37.00)
Expectancy
1.38

15. Forex Probability of Win 83% Average Win $ 3,144.00
$ 3,144.00
Probability of Loss
17%
Average Loss
$ (250.00)
Expectancy
10.21

16. Forex ROM(Return On Margin)

17. Emotional Characteristics
Trade Delta
Trade Theta
Reward/Risk > 2
Patience waiting for entry and exit
Trade any instrument on any market
Trade any time frame
Minutes, Hours, Days…
Capable of full back-tested automation
Reward/Risk <= 1
Patience waiting for small gain
Trade only liquid optionable markets
Trade weekly or monthly
Cannot be back-tested

18. Delta Trading Summary Trade any instrument on any market
Greatest leverage of time and money
Like horse shoes…only better
Just need to be close to direction
Take profits while horseshoe in mid air
You do not have to wait 5 times longer or end of month
Use Optimal f or Kelly Bet to size position

19. Conclusion “Stand on the shoulders of Giants”
The way to true wealth is learning to trade delta