The Crown Method
A defined-risk options practice, built from Nicholas Crown's public teachings and fused with Druckenmiller's macro discipline. Rules first, then test, then paper — live capital last.
The three questions
Every trade answers all three. No answers, no trade.
1. View — what am I expressing? Directional, neutral, or volatility.
2. Timing — how fast should it happen? The option's duration has to match.
3. Risk — what am I isolating? Direction, decay, or vol crush.
The setups
The regime gate is mandatory, not optional. Bearish setups only trade when the broad market is risk-off (SPY below its 200-day average). The first backtest showed a strong risk-off edge — but the larger 114-trade clean test could not replicate it (60.5% win rate vs the 67% the 50%-target/2x-stop math demands), so the failed-rally setup is rejected until it proves itself again. The gate stays mandatory because trading against the regime has never worked.
A — Failed rally
B — Rich volatility, no catalyst
Directional
Risk rules
Defined risk on every trade — spreads only, max loss known at entry. Risk 1–2% of equity per position; never more than five concurrent. Stop-entry, not stop-loss: price must confirm before you enter. Exit credit spreads at 50% of max profit. Manage by 21 days to expiry. Never hold a loser hoping.
The testing ladder
1. Backtest — 100+ occurrences per setup, 2+ years of data.
2. Paper trade — IBKR paper account, 30+ simulated trades per setup.
3. Live — smallest size. Scale only after three green months.
The Druckenmiller fusion
Stanley Druckenmiller: thirty years, no losing year, roughly 30% annualized. His contribution here is posture, not picks — macro regime first, preservation of capital, concentrated conviction, cut fast when wrong.
The fusion isn't an enhancement — it's the strategy. Without the regime gate the method loses money. The gate's directional value (filtering worse trades) held up in testing; its profitability did not — see the backtests page for the honest numbers, including the setups that failed.
— Regime gate: risk-on, risk-off, or transition. Setups only trade with the regime.
— Fourth question: what would prove me wrong, and how fast would I reverse?
— Sizing: 1–2% base, up to 5% on high conviction — always inside defined-risk spreads.