Anyone using an Options Advisor service that has been successful?

[TraderZones]

Quote from Jerryflyguy:

Trader, I think I follow, but can you expound a bit more.. why would success [or lack of a significant loss] in paper trading be not concidered as a success in general terms?

a large number of reasons. You will find serious traders here pretty much saying that paper/sim trading is only the first step in a long line. But a few of many reasons it is not success:

1) a few months is way too short. Most newbies/paper traders do not ever "blow out an account or two", which is part of the education process for many traders.
2) paper trading does not properly account for slippage, commissions, fees and a lot of other things
3) the emotion of trading money is entirely different from paper trading
4) disruptive market events can blow out a leveraged trader. A paper trader often just treats these as a minor irritation.
5) tick by tick reality is a lot different than checking the results when the trade is over.
6) you cannot account for a lot of money/potrfolio/trade management realities when
7) Perhaps 0.2 to 0.5% of traders will ever be longterm lucrative. Most paper traders think they will be part of this group, even in the face ofvery long odds.
8) Your account size has a lot to do with your success. A person with $500K will usually do far far better than someone with $K. To a paper trader, this is usually not even a consideration.
9) and a lot of other things you do not realize until you have been trading for a number of years.

 

[Jerryflyguy]

Trader, have you used the ToS to paper trade? I have no problem blowing money on slippage, commisions [which are over charged in the paper side vs what they list on their site], exchange fee's etc... they are all included in the paper trading.. and I only get fills on markets that are moving. I've missed buys on calls in smaller cap options due to lack of movement on them.. [open interest of a few hundred] I agree that trading for a couple months w/ paper doesn't carry a whole lot of weight, however I've been trading real $$ [not day, but actively buying my own picks for three years] and while I have had some blow outs [lost $12k on one stock in particular due to 'too much love'..] I've had some success's as well..

Anyway, I'm on a mission to learn more and get more active in my trading.. and get more accurate if possible.. reduce the loser's and increase the winners...hence the questions..

 

[ET-trollbuster]

Quote from Jerryflyguy:

Trader, have you used the ToS to paper trade?

she doesnt trade. she trolls et spouting how trading is stupid => all traders are doomed losers. 6000+ posts of the same spew. lifeless, emotionally unstable. sad situation

 

[TheGoonior]

If you have an advisory service that gives good stock picks, why do you need to find a different service for options? (I'm assuming your service was swing trading, rather than day trading, as it's much tougher to day trade options). You'll have results from your service which means you know the general time frame of your trades, so there's no reason you couldn't trade the same picks with options (assuming they are optionable and liquid).
You can make use of simple strategies and possibly even make your trades less risky and more profitable. Of course you will need to learn about the various nuances of options (greeks, etc.), but if you're considering using an options service, I would hope you would be educating yourself anyway, rather than just taking calls at faith.
My $0.02.

 

[Jerryflyguy]

Goonior, I have a reasonable list that has had some success.. to date since I've been on the list it's only had to sell two stocks at a loss, not all have become significantly profitable yet.. but we have had a pretty good run, as far as since earlier in the year when I signed on.. I have always taken their picks and evaluated them myself.. and from their list.. I pick my pick's [and some aren't from their list]

The stock picking service has nothing to do w/ options however, and I'm looking to expand my investments in that direction.

One of the negatives of the service [for me] has been the lack of in-depth explination of the picks they send out.. The service was a buy and hold type advisory service... it certainly wasn't a short term thing..

I've been educating myself on options and have a fairly good grasp of the greeks and various spreads a person can use, now I'm looking to expand this to buying calls and puts and figuring out at what strikes to buy them at etc.. having the insite of an 'expert' and watching their pick's and the results would shed some light [at least a prespective] on how others do it. I've back tested several stocks that I own and have found that I'd have done alot better [and no worse] using options but the range of profits was infuenced by which strikes were purchased etc. Know which strike to buy based on it's Delta and Theda is the trick that I haven't completely nailed, but I'm working on it

I'm one of these people who likes to look at things from many many sides and then after I feel I've a well rounded perspective.. I leap.. I have no intention of blindly following anything or anyone.. but having some direction can bring some things into focus that simply might get missed or not realized for some time...

I feel that watching someone else's picks and seeing why they are picking them can give some insite into why one trader might be more successful than another. Anyone can go and watch the open interest of various stocks and follow the herd... I'm more interested in finding why the leader picked that strike rather than just following the flow.. [which I don't nesc believe is the same as buying the trend]

Best regards..

 

[hlpsg]

Quote from Jerryflyguy:

but in being a member on a advisory list, I'd get to see what they are looking at and the how's and whys of their pick's and expect that this would further my education while giving me a edge over my current skill level. [/B]

Good call at purchasing Hulbert's, a smart choice. Just wanted to address the above thoughts. It'll ony be education if what they're teaching you actually works. If what they're teaching you doesn't work and you adopt their thought processes and also pick up ideas from there that are actually wrong (and they stick for a long time), it's actually detrimental to your learning progress. That's something to keep in mind.

When I was just starting out in options, I heard someone here say that you shouldn't trade options till you can successfully swing trade stocks. That idea stuck with me a long time. Is it true? Not really, it depends on what kind of trading you do.

 

[hlpsg]

I think Papertrading is more useful for a trader with some experience with the real thing (perhaps he's testing a new strategy), than a new trader. He knows what to look out for, what's realistic, what's not and account for that.

I think Papertrading can be a fruitful process if one adopts certain common sense guidelines.

E.g., account for the typical slippage into your fills.

Commissions are accounted for now in TOS even for Papertrading, so that's not really an issue. You could also calculate it yourself if you wanted to.

I get similar emotions even when Papertrading, when I'm doing it as a test for a new strategy. I.e. I do feel similar feelings if the trade moves against me.

What Papertrading cannot account for are the liquidity problems when the market is really moving. Also it's easy to throw away a trade when things go against you instead of staying and fighting till the end when real money is on the line.

 

[Jerryflyguy]

Thanks Hlpsg, I think anything we follow has the potential to show us the right path.. or the wrong path. The difference is if we blindly follow or if we sit back and evaluate past cause and effect. I agree that bad habits or thought process's can arise from following a bad lead.. This is primarily why I was looking for a list w/ a reasonable track record. We all know that stuff can move against us w/ really no GOOD reason.. earnings come out that are up but nothing happens [or it even moves down as we've seen in recent months].. anyway.. I'll keep my head down... read more books and watch more vids... in time I hope to get a better grasp.

Btw, I've also got to say that I'm often as tense trading my paper as I am when I'm making calls/trades in my real accnt. My methodology is simply that if I can't make it fly on paper [consistantly] then there is no point in putting money behind it.. I find that liquidity is reasonably portrayed w/ paper on TOS... I've had no fills when the market wasn't moving as much as it could have... and possibly my REAL order might have got filled... haven't ever tried to sell into a real knife or try to jump on a 'flyer' trend yet.. but from my limited experiance w/ it, I'm happy thus far.

Best Regards..

 

[hlpsg]

Quote from Jerryflyguy:

My methodology is simply that if I can't make it fly on paper [consistantly] then there is no point in putting money behind it..

That is a very wise thing to do. I seldom practice what I preach though. When a new idea occurs to me that I'm really excited about, I papertrade it for one month then throw real money at it, sometimes to learn about its pitfalls later on, or that I did not anticipate all the risks accurately. If you can be disciplined enough to paper trade till you've worked out all the kinks, it's a great idea.

I find that liquidity is reasonably portrayed w/ paper on TOS... I've had no fills when the market wasn't moving as much as it could have... and possibly my REAL order might have got filled... haven't ever tried to sell into a real knife or try to jump on a 'flyer' trend yet.. but from my limited experiance w/ it, I'm happy thus far.

I suspect TOS did something to improve their papertrading account. In the past I'd get false triggers from limit orders setup to trigger when the underlying hit a certain price, and it'll get triggered even when the underlying did not hit that price.

Now, even on papertrader, you will not get filled at mid prices most of the time if you're selling certain types of spreads.