LD Lossdog Research
strategy

Undefined Risk Trade

2 matching records.

Trade idea

Trade idea Undefined Risk Trade

The trader prefers undefined risk trades over defined risk trades because they offer more flexibility for adjustments and rolling, which is easier to manage. These trades also have shorter holding periods due to faster decay, allowing the trader to reach their profit target more quickly. This is particularly advantageous for high volatility stocks, where undefined risk trades can provide a richer edge.

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StrategyUndefined Risk Trade
Time horizonShorter holding period, typically faster decay.
Entry / triggerWhen the trader is willing to take on more risk for potential higher returns and prefers flexibility in adjustments and rolling.
Target / exitTo reach the profit target faster due to the shorter holding period and faster decay of undefined risk trades.
Invalidation / stopIf the trade moves against the trader's expectations and the risk becomes too high.
SpeakerSpeaker
Risks
  • Higher risk due to undefined risk profile
  • Requires more active management and monitoring
Undefined Risk Trade
high confidenceVerify in video at 42:32 ↗
Trade idea

Rivian undefined risk trade

The speaker recommends starting with cheaper stocks like Rivian to get used to undefined risk trades. This approach allows traders to build confidence and reach profit targets faster. The speaker emphasizes the importance of managing risk through position sizing and suggests that undefined risk trades offer a higher probability of profit compared to defined risk trades.

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Strategyundefined risk trade
Assetstock
Time horizonNot explicitly stated, but the speaker suggests starting with cheaper stocks to build confidence.
Entry / triggerIdentify stocks that are a little bit cheaper, such as Rivian, to get started with undefined risk trades.
Target / exitReach profit targets faster with undefined risk trades.
Invalidation / stopNot explicitly stated, but the speaker suggests using defined risk trades as a starting point.
SpeakerSpeaker
Risks
  • Market volatility
  • Potential for larger losses compared to defined risk trades
longEquitylongUndefined Risk Trade
medium confidenceVerify in video at 19:58 ↗