How to make money trading in this market?

First get an account at a reasonably priced brokerage firm like interactive brokers, second don't daytrade options the spreads will kill you, third if you do trade options realize that the market will do what you don't expect it to so the more ridiculous a trade seems the better it probably is and the safer something seems the more dangerous it is, cut your losses small on stocks and let your winners ride obvious advice but hard to do in practice when you think you are right, realize that you have no idea what you are doing until you have traded for a few years and you have a decent chance at sucess
 
Quote from burtonridr:

Ok, so I just jumped into the trading game after being laid off. I have a small amount of play money to work with, which is just fine. But looking at these charts, almost everything took a slight up trend through december. I'm guessing over the good holiday shopping feelings. Then from january until now we have been about level to slightly trending downward.

I cant make heads or tails about what is going to happen. It seems short term things are going to run up a little. However, I'm taking things on a day by day case.

So my question is, on a down day, what are some strategies I can use to make money day trading with options. I'm fairly new to options and it seems as though you can make as money when the stock goes down, as you can when the stock goes up. But I'm probably missing something. So are there some strategies I can study?

Thanks,

Eric
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My sincere advice is to forget trying to make money trading. Just from your post, there are several signs that you'll be another sheep to the slaughter. You would be far better off following the good advice in the first two replies to you on this thread. Dust off your CV and get out there and find a job in the field you are qualified for. An amateur trader wannabe is about as likely to make a living as a 5'9 kid who wants to play in the NBA.

If for some reason you do persist in throwing your money away in the market, I will give you one bit of market advice: whenever you find yourself saying this "I cant make heads or tails about what is going to happen", then the correct response is simple - DO NOTHING. Do not have on any positions when you don't know what is going on. Only have positions on a minority of the time, when you understand what's happening. The trouble is, as a beginner you will almost never understand what it happening, it will take 2-3 years for you to pick it up and that is if you have an aptitude for it - the average person wouldn't pick it up even after 5 years.
 
As usual, there is no shortage of people telling the OP that he cannot do something.....

burtonridr, you mention options--read Larry McMillan's Options as a Strategic Investment. It's a tome, so I suggest getting pretty comfortable with just the first six chapters. Then cruise over to cboe.com and look at Dan Sheridan's videos on option trading.

Yeah, yeah, I know, by the time you read and study all that stuff, the current set of opportunities will have passed and everything about the markets will have changed. That's okay, though. You are correct that with options you can make money in any kind of market. So try to be a bit patient.

It is key to understand volatility. I can't stress that enough. Volatility will be your best friend if you understand it.

Options, unlike stocks, require a large investment in time, effort and paper trading to understand and trade successfully. One technique for learning is to paper trade every technique you read about that interests you for a while, then decide whether you are really comfortable using that methodology. Set up a big paper trading account and a small real trading account. You will end up paper trading a lot of stuff that you don't ever end up trading for real. I think it's important to do some real trades, though, since one never can attach the emotion to bits and bytes that one does to real money.

Needless to say, there is a lot of leverage in options trading and one needs to get familiar with how the prices behave, how volatility and time to expiration affect them, and how the time to expiration and distance from the strike changes the rate at which option prices change. It's quite different from trading stocks.

Liquidity is key; b/a spreads are outrageous with options. I encourage you to trade indexes. If you want to trade small while getting the hang of things, use etfs. Take a look at rut or ndx, or the equivalent etfs. If you are trading etfs, dia and spy also have good liquidity. If you want to trade equity options, choose heavily traded issues remote from earnings dates.

Unfortunately I don't think there are any shortcuts in options trading. The learning curve is steep--but by no means impossible.

Good luck. Post again in the options section if you have questions.
 
Well here is something you could look at: go to youtube and type in S&P trader. The man puts videos up almost daily laying out his system of trading S&P eminis using support and resistance levels, macd and some other TA stuff. If you are looking to develope a system of trading, the videos are quite informative and the support and resistance levels he publishes every week are useful in understanding why the market made certain moves. You could easily buy calls or puts using his information for entry/exit points.
 
drcha - the reason for the pessimism is because you need genuine passion and commitment to have a chance of succeeding in this kind of field, and from his posts he doesn't appear to have it. He's coming across as a dabbler, not someone with the drive, hunger, and obsession with the markets required to be successful.

From his later posts at least he is keeping his stakes low, but let's be honest here - he'd be better off just paying down the rest of his debt and finding another job which he enjoys, than he would be by dabbling in the markets. It may sound patronising but it's the truth, just as it's the truth if an NBA regular tells a lazy 5'9 guy who can't jump to find another line of work.

I would love to be proven wrong but as a trader I wouldn't bet on it.
 
Quote from burtonridr:

BTW today I traded BAC stocks for a few hours and came out ahead $62

I bought 200 shares of BAC at $5.80 then held them until $6.04.

Then rode the downside from $5.97 to $5.82

So I grossed $62 and paid $60 in trading fees lol

Yesterday I did much better and had a net of about $50

The cost of trading is gonna kill me with only $1000
-------------------------------------------------------------------------------
How can one trade 200 shares at $5.80 per share on a deposit of $1000? This has to be a cash account.:confused:
 
Quote from Redneck trader:

Yes Sir I can do that

I use
1.) Multiple timeframes (long, medium, short)
2.) A chart of a correlated market – with the long time frame
3.) Candlesticks (But other than the basics – I do not have any patterns memorized)
4.) A couple of EMA’s,
5.) Horizontal lines
6.) Level II
7.) Time of Day
8.) Nothing else



Depending on the type of day; Inside/ Upside/ Downside;

I buy near support/ or sell near resistance with stops identified above and below these areas

I buy / short on trends with stops on the opposite side of my EMA


Also depending on type of day – I either enter with my full position or scale in on pullbacks

losses - I either exit, or exit and reverse when it’s not working (depending on my assessment)

profit - I exit, scale out some, or stay in at consolidation points (depending on my assessment)


This is my entire set up, and I trade it successfully


Now Sir please tell me how can he possibly use this information to any benefit



Redneck
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do you really need to ue emas and level 2 data?? :eek: :cool: Lol

You could simplifiy it alot which would probably give you less small losing trades.


Abd that wont help the guy tough cos you havent actually gievn him a trading method or stratergy that he can actually use day by day, and shown him how to identify the strong key S&R levels...,
you have simply tol the bloke a list of stockmarket indictors and reminded him that as long as he has his trade in the direction that the market moves in he will make money!
:D
 
Quote from burtonridr:

Thanks Spanish! I will check that stuff out. Out of all the commodities I have the best grip on oil.

Just need to research futures trading a little. :)
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You like that stratergy then mate?? :)

And if you want to pickup all the basics of trading oil as well as a few other markets you are welcome to join the little community in my trading journal ''5% t 10% profit per day trading'',
where theres a group of us who discuss the fundamentals n news of the market throughout the day,
and every night i post what the key levels that you need to watch for the next day on both the upisde and downside,
+quite a few live trade calls daily. :)
 
Quote from spanish89:

do you really need to ue emas and level 2 data?? :eek: :cool: Lol

You could simplifiy it alot which would probably give you less small losing trades.


Abd that wont help the guy tough cos you havent actually gievn him a trading method or stratergy that he can actually use day by day, and shown him how to identify the strong key S&R levels...,
you have simply tol the bloke a list of stockmarket indictors and reminded him that as long as he has his trade in the direction that the market moves in he will make money!
:D
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Thank you for such astute hokum

I’ll take it under advisement

Regards
 
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