I often get requests for simply providing an option to trade; hence we have our Pick of the Day. It works well and we are very proud of its success. And this pick is also provided by a human who manually analyzes the market and selects a particular option to trade on market open.

Some programs, however, let a computer program make the selection and delivery. While they may be mostly positive, ‘mostly’ is the operative word here. What do you do when the stock falls outside the parameters required of the computer program? Just because a computer makes the pick does not make it right. And when do you recognize it may be a bad trade, when it hits zero? Black box trading can be right 99% of the time, luring you in to a false sense of security. So you go full in and then Bam! It whacks you with a loss!

Black box type trading has its place. If you are unable to watch markets all day, perhaps this may be your best alternative. Day Trade SPY’s Pick of the Day is very profitable but we also like to encourage users to study the ‘Repairing Trades’ module so you can fix any bad position, should the need arise on those rare occasions.

I also suggest that instead of simply taking a computer’s pick, to instead, learn what moves markets so you can make intelligent decisions on your options yourself. It’s very liberating when you understand what drives options and that there really is no mystery behind any of it. Even losses will be easier to handle when you recognize where you may have stumbled.

Got the black box blues? Master the methodologies behind the trades instead!


~ Hugh Grossman, Head Trader at Day Trade SPY

February, 2020