Debit Spread POMDP‑Inspired Strategy by MNeidhardt
By MNeidhardt
Performance Metrics
- Author: MNeidhardt
- Symbol: NYSE:YELP
- Timeframe: 1 day
- Net P&L: +41.04 USD (+0.00%)
- Win Rate: 53.2%
- Profit Factor: 1.279
- Max Drawdown: 34.35 USD (0.00%)
- Total Trades: 158
- Sharpe Ratio: −539.334
Description
Comprehensive Strategy for TradingView-Based Call and Put Debit Spread Options Using POMDP for Signal GenerationDebit spreads limit risk to the net premium paid while capping potential profit, ideal for moderate price predictions.Pine Script in TradingView enables custom indicator integration and strategy automation for options trading.Partially Observable Markov Decision Processes (POMDPs) optimize decision-making under market uncertainty by modeling states, actions, and observations.Training a POMDP policy involves defining market states, actions, and observations from technical indicators, then simulating and refining the policy.Automating the strategy via agents or TradingView alerts can execute trades when conditions align with the POMDP-generated signals.