Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Teresa Lo who wrote (10673)	5/9/1999 9:46:00 PM
From: David Wright	Read Replies (1) \| Respond to of 14162

I took a look at your site. Some very good information there, and I will explore it more. Your basic premise is to trade with the trends, which, of course, makes a lot of sense. I have always felt that any form of trading, whether day trading, Covered Call "trading", or whatever, is much harder to do if you are trying work within a trading range on a stock that is down-trending. However, when doing CC's, I will do it, because our primary focus is on capturing option premiums on stocks with good fundamentals. Even when it is down-trending overall, there are many good techniques to keep the CC money machine going. Again I prefer not to...and don't usually have to in this bull market. But...the day will come when we have a bear... "For years, I used to use RSI, MACD and momentum, but in the end they are all oscillators (RSI, DMA oscillator, rate of change, momentum,stochastics, MACD, etc.), which are to be used specifically for sideways markets, and NOT for trending markets. Their value is in warning of divergences." A nit to pick with your post..first I quote from your site.."One needs to know the limitations of mechanical indicators and use both an oscillator and a moving average to properly diagnose the market". Stochastics is an oscillator, and MACD is moving average based, not an oscillator. I think they make a great combination, just as others have found RSI (an Oscillator) and Bollinger Bands (moving average based) a great combination. Most our discussion on this subject was related to which set was more responsive to our needs as CC "traders". Different strokes, for different folks. It would be interesting if you would relate your experience and theory to what we do as CC writers. Thanks.