Why Trade Mechanically Vs Subjectively?
By Ryan, CEO & Head Quant
Mechanical options selling strategies tend to outperform emotional trading by removing the subjective element from the decision-making process. Emotional trading can lead to impulsive decisions, which can result in poor trades and losses. On the other hand, mechanical options selling strategies are based on objective, rule-based systems that are designed to generate profits in a consistent and systematic way.
One of the key advantages of mechanical options selling strategies is that they are based on a set of rules and conditions. These rules and conditions are based on market data and historical patterns, and they help to identify profitable trades. This means that the strategy is not influenced by emotions and is less likely to make impulsive decisions.
Additionally, mechanical options selling strategies are designed to be consistent and systematic. This means that they are based on a set of rules that are applied consistently, regardless of market conditions. This can help to reduce the impact of emotions on the trading process and increase the chances of success.
Another advantage of mechanical options selling strategies is that they can be backtested and optimized. This means that the strategy can be tested on historical market data to ensure that it is profitable under a variety of market conditions. This can provide a higher level of confidence when implementing the strategy in live trading.