I am interested in what approaches that you followed that you now define as crap and what people you followed that you now define as charlatans. This might inform us all from your experience.
HowardCohodas Index Options Credit Spread Trading Journal
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You got it.
"Delta neutral premium selling" is only a trade and not edge by itself. It is a loser game in long term consider you are playing negative expectancy game by paying commission and slippage.
if you know options like atti or dmo,you can squeeze a lot of juice out of them,if not, you better be good at calling market direction...condorito on page 147,suggested looking in the mirror,Howard ,see if that guy looks stubborn to you,if you can see that,change it,it'll speed up your learning curve
I think it's great you made the point on this thread. I personally knew a guy in Chicago that made millions selling premium over 3-4 years and then lost it all, he then sold a building he owned, and took bank loans, to lose it all again shortly after, he was imprinted like a duck on that strategy, nobody could talk him out of it. According to what I've read Niederhoffer blew a lot of funds in similar fashion.
The fact that you can go on a long time making spectacular returns, never losing it seems, till one day the market gets into the fat tail...
Others I knew got a fat tail event shortly after they started, and blew up inmediately. I guess those were the lucky ones, because they didn't get to blow the family money or investors', etc.
HoCo enters his trades as directional trades, and converts to ICs after. That's the one thing that peeked my interest, and that, maybe, can save his approach.
Was the guy just selling puts or something with no stops or other protection? Also, was he compounding his gains? If he made millions he should have squirreled some of it away. That's what gets me about guys like Jesse Livermore. He made millions in the 20's and lost it all (IIRC two or three times). Why not put at least some of that into a nice safe bank account?
He was selling strangles in grains, bonds, currencies. He bought some real estate with profits, which he then borrowed against to "recover". He didn't recover. Last I heard he lives on the income of some rentals that he inherited and had the discipline not to sell.
It is very evident, if you pay attention, that swans, ducks, chickens, and other feathered animals, have become much more frequent than before. There is a mini bubble and or mini burst almost every week in some market or another. Too much hot money looking for big returns IMHO. The good news is that small guys can learn to front-run it. In other words, looking to trade the tails should be highly profitable, in theory. I.e. Trade the trends
against the wrongly positioned herd (educated guess) and exit before the reversal, guarding your tail at all times, or something like that.
Different people have different character.
Most "successful trader" will pocket some money in the safe if they make several millions, but this also imply most "successful trader" will not take excessive risk to make them become a legend and exceed other "successful trader". The concept behind this is quite simple - I already make enough money for the rest of my life, why should I take more risk and possible loss all of them?
The tendency to take excessive risk is the unique character of Jess that make him the most successful trader in this era, although he lost everything and take his own life in his old age, a pretty sad story.
Eudamon
Trade the trends ( short ones ) I like that idea and trading against the crowd. As an amateur that is what I´ve evolved to so far.
One of the problem things I find, is with just a $10,000 account, the rules about not being allowed to trade more than 4 trades in 5 days. I believe but not sure you have to have $25,000 in there to do more?
Doesn´t matter anyway, I wait for a monthly OEX trade and been playing with SPY experimentally. I find you can scalp the SPY daily. The commissions are more than the net return, but what the heck if you can do it regularly, like every day. The SPY experimenting is still ongoing. I want 20 wins in a row scalping, before I do it with real money. Still I stare at this experimenting scalping and wonder why they put that rule in there? I don´t want a margin account, I only want to trade available cash.
SPY scalping isn´t big money, but if you can get the wins right, on direction, or fading the crowd, it is a nice income stream.
The rule as I read it, locks you down if you trade 4 trades in 5 days. So that basically limits me to 3 trades in a 5 day period and I have to save one for the OEX should it get volatile. So only two scalping SPY trades a week. Sort of mulling that over. See if it is worthwhile?
Trade the trends ( short ones ) I like that idea and trading against the crowd. As an amateur that is what I´ve evolved to so far.
One of the problem things I find, is with just a $10,000 account, the rules about not being allowed to trade more than 4 trades in 5 days. I believe but not sure you have to have $25,000 in there to do more?
Doesn´t matter anyway, I wait for a monthly OEX trade and been playing with SPY experimentally. I find you can scalp the SPY daily. The commissions are more than the net return, but what the heck if you can do it regularly, like every day. The SPY experimenting is still ongoing. I want 20 wins in a row scalping, before I do it with real money. Still I stare at this experimenting scalping and wonder why they put that rule in there? I don´t want a margin account, I only want to trade available cash.
SPY scalping isn´t big money, but if you can get the wins right, on direction, or fading the crowd, it is a nice income stream.
The rule as I read it, locks you down if you trade 4 trades in 5 days. So that basically limits me to 3 trades in a 5 day period and I have to save one for the OEX should it get volatile. So only two scalping SPY trades a week. Sort of mulling that over. See if it is worthwhile?
falconview, what broker imposes this rule?
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