The description provided by ET says that journals are supposed to be for "personal thoughts and anything else related to your quest of becoming a better trader," so I guess that makes journals the best category for this thread.
My quest to become a better Forex trader has, by and large, reached its final destination (or a new beginning). Having fully fleshed out my system, my plan is to begin trading it full-time this week, or the following week at the latest. But as I was reading someone else’s journal and realized they were referencing options, it occurred to me that now would be as good a time as any to look into this trading venue I have always avoided and know virtually nothing about.
I’m under the impression that options can enable an investor to adapt or adjust his or her position according to any situation that arises, and to hedge the risk of other market transactions, so they are probably worth looking into, even if I end up never trading them. At least I will not be rejecting their use out of ignorance.
It was suggested that I should work my way through Option Alpha and Tasty Trade to get started, but first I’m going to check out three booklets I downloaded online. The first book said that an option is defined as "the right, not the obligation, to buy (or sell) an asset at a fixed price before a predetermined date," which seems to be a bit inaccurate to me in the sense that I’ve always understood an option to be a contract.
The second book appeared to be a bit more careful with its language, describing an option as a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.
So the first thing I want to know is, how are the specific prices at which the underlying assets are sold determined?
One book starts with a bunch of rigmarole about criteria for successful investing, pre-planning every trade, discipline, and risk profile charts—all of which I skipped. Another gets started right off the bat with how to draw profit and loss diagrams.
Nonetheless, I plan to initially zero in on the nature of the contracts themselves, given that I probably know better than anyone how I learn best.
In developing the Forex system I use, I was told that my ideas were wrong, nonsense, false, and mistaken. Upon mentioning that I was shooting for a success rate of from 80% to 90% or better, one contributor to this forum remarked, "Please not the dreaded 'success rate' again. I've achieved 90% success rate for a long period many, many years ago and lost money. Think on that."
I was told that what I ought to do was read books by the likes of Chande, Van Tharp, and Ciana. But all of that notwithstanding, I went on to develop the system I had in mind just as I envisioned it. Upon its completion, I took a look at a couple of the publications written by the previously cited authors and concluded that, had I bothered reading them when they were recommended to me, it would have been an almost total waste of my time.
Given these kinds of experiences, I tend to study the things that interest me in whatever manner strikes me as being best for me personally, and it will probably be the same when it comes to options. So again, the first thing I plan to do is conduct a search to find out how the specific prices at which the underlying assets are sold are determined.
LESSON #1: An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a given date.
My quest to become a better Forex trader has, by and large, reached its final destination (or a new beginning). Having fully fleshed out my system, my plan is to begin trading it full-time this week, or the following week at the latest. But as I was reading someone else’s journal and realized they were referencing options, it occurred to me that now would be as good a time as any to look into this trading venue I have always avoided and know virtually nothing about.
I’m under the impression that options can enable an investor to adapt or adjust his or her position according to any situation that arises, and to hedge the risk of other market transactions, so they are probably worth looking into, even if I end up never trading them. At least I will not be rejecting their use out of ignorance.
It was suggested that I should work my way through Option Alpha and Tasty Trade to get started, but first I’m going to check out three booklets I downloaded online. The first book said that an option is defined as "the right, not the obligation, to buy (or sell) an asset at a fixed price before a predetermined date," which seems to be a bit inaccurate to me in the sense that I’ve always understood an option to be a contract.
The second book appeared to be a bit more careful with its language, describing an option as a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.
So the first thing I want to know is, how are the specific prices at which the underlying assets are sold determined?
One book starts with a bunch of rigmarole about criteria for successful investing, pre-planning every trade, discipline, and risk profile charts—all of which I skipped. Another gets started right off the bat with how to draw profit and loss diagrams.
Nonetheless, I plan to initially zero in on the nature of the contracts themselves, given that I probably know better than anyone how I learn best.
In developing the Forex system I use, I was told that my ideas were wrong, nonsense, false, and mistaken. Upon mentioning that I was shooting for a success rate of from 80% to 90% or better, one contributor to this forum remarked, "Please not the dreaded 'success rate' again. I've achieved 90% success rate for a long period many, many years ago and lost money. Think on that."
I was told that what I ought to do was read books by the likes of Chande, Van Tharp, and Ciana. But all of that notwithstanding, I went on to develop the system I had in mind just as I envisioned it. Upon its completion, I took a look at a couple of the publications written by the previously cited authors and concluded that, had I bothered reading them when they were recommended to me, it would have been an almost total waste of my time.
Given these kinds of experiences, I tend to study the things that interest me in whatever manner strikes me as being best for me personally, and it will probably be the same when it comes to options. So again, the first thing I plan to do is conduct a search to find out how the specific prices at which the underlying assets are sold are determined.
LESSON #1: An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a given date.
