The Outlier Trading Podcast Inside Profit Mechanisms and AARs The Outlier | Trading Podcast Unplugged
Dec 18, 2025
This week, Shrey J, an early-stage trader and community member, dives deep into the essentials of trading. He and Erik explore why profit mechanisms are crucial, highlighting the gap between theory and execution. Shrey shares his personal experiences and learns how critical it is to measure underlying profit mechanisms before trading. The duo discusses strategies, including trend-following and utilizing options effectively. They also break down the After Action Review process, emphasizing portfolio metrics and personal target mindsets to enhance trading decisions.
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Profit Mechanisms Drive Returns
- Profit mechanisms are the real sources of returns, not option structures themselves.
- Identify how a trade actually makes money before choosing sizing and management.
Start With The Mechanism, Not The Option
- Start by brainstorming how an asset can make money, then research and measure that specific profit mechanism.
- Track the mechanism on the underlying price first before adding option structures.
Practice Makes Execution Mechanical
- Repetition and pre-execution work turn decisions into simple execution, like Steph Curry's free throws.
- Do the background research and practice so live choices are mechanical and confident.