I’ve been hearing about max pain in options trading lately. Tried to understand it but still confused.
Does anyone use this concept in their trading? How reliable is it for predicting price movements?
Wondering if it’s worth incorporating into my strategy or if it’s just another theory.
Max pain’s been hit or miss in my experience. Started using it last year for Tesla trades.
Sometimes it’s spot on, other times way off. Noticed it works better closer to expiry.
Wouldn’t base my whole strategy on it, but it’s a nice extra data point. Combine it with volume and support/resistance levels for a fuller picture.
Always have a solid exit plan regardless.
Max pain burned me hard when I first tried it. Lost 40% on SPY puts thinking it was foolproof.
Now I use it as a general guide, not gospel. Last month it helped me time an AMD call exit for a 63% gain.
It’s not perfect, but combined with other factors, it can give an edge.
Max pain: supplementary indicator, not primary strategy.
• Accuracy varies
• More relevant near expiration
• Combine with technical analysis
• Use for context, not sole decision driver
Backtest thoroughly before implementation.
Max pain’s useful, but don’t bet the farm on it. I’ve seen it work and fail over the years. It’s just one piece of the puzzle.
Look at the big picture - technicals, fundamentals, market sentiment. Max pain can hint at where the price might gravitate, especially near expiration. But market makers aren’t the only force at play.
I use it as a sanity check, not a primary indicator. If my analysis aligns with max pain, great. If not, I dig deeper. Remember, no single metric tells the whole story. Focus on risk management and a solid overall strategy instead of chasing theories.
Used max pain on AAPL trades. Helped me time exits better, but not perfect. Won 62% of trades last month using it with RSI. Still keep stops tight though.