HowardCohodas Index Options Credit Spread Trading Journal
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Rodney
Presume you have not been around long. Howard and I have been kibbitzing as amateurs trying to learn trading as a profession since his beginning. It has been a journey of discovery. We continue to discuss each others learning process. I was trading credit spreads most of 2010, but lost twice catastrophically. Since then I moved to straight buying and it is a work in progress at the moment.
As a late comer, you may not be aware. For Howard he knows what I´m talking about. He went from funny money to real money trading faster than me. I just graduated to the real money.
Results so far:
8 months in trying to learn spread trading methods. Mostly credit spreads. Lost my shirt. Luckily funny money.
4 months in funny money straight buying of options with a return of 197%.
So far only 3 weeks in REAL MONEY and bit nervous about it. But so far, one trade, 5% of account size.
Method to Eudamon: Keep it simple! Pick a method, any method off the internet, play with it by eliminating any losing trades. Keep refining until you find the crux of the matter to give you a 100% winning trade. Eliminate all wishy washy trades, gambling trades and this appears to only allow you to trade rarely. But when you do, so long as it wins, then increase TRADE SIZE by compounding.
I´m an amateur, what the heck do I know? Don´t even understand how to use the GREEKS in option trading. Just got my own ideas. I´m thinking that one trade a year, that will always make a bit of profit, is better than a hundred trades a year, in which the losses wipe out that profit. Eliminate the losses and I will have a trading system. End of this year will tell. Right now, too early to tell. Just fumbling and stumbling along.
Presume you have not been around long. Howard and I have been kibbitzing as amateurs trying to learn trading as a profession since his beginning. It has been a journey of discovery. We continue to discuss each others learning process. I was trading credit spreads most of 2010, but lost twice catastrophically. Since then I moved to straight buying and it is a work in progress at the moment.
As a late comer, you may not be aware. For Howard he knows what I´m talking about. He went from funny money to real money trading faster than me. I just graduated to the real money.
Results so far:
8 months in trying to learn spread trading methods. Mostly credit spreads. Lost my shirt. Luckily funny money.
4 months in funny money straight buying of options with a return of 197%.
So far only 3 weeks in REAL MONEY and bit nervous about it. But so far, one trade, 5% of account size.
Method to Eudamon: Keep it simple! Pick a method, any method off the internet, play with it by eliminating any losing trades. Keep refining until you find the crux of the matter to give you a 100% winning trade. Eliminate all wishy washy trades, gambling trades and this appears to only allow you to trade rarely. But when you do, so long as it wins, then increase TRADE SIZE by compounding.
I´m an amateur, what the heck do I know? Don´t even understand how to use the GREEKS in option trading. Just got my own ideas. I´m thinking that one trade a year, that will always make a bit of profit, is better than a hundred trades a year, in which the losses wipe out that profit. Eliminate the losses and I will have a trading system. End of this year will tell. Right now, too early to tell. Just fumbling and stumbling along.
Howard,
I have been looking at your journal and have some questions and comments.
Entry Points:
If entering at 60 days gives you more opportunity for rolling winning spreads, does it at the same time introduce the risk of having more losing spreads?
Do you start with more PUTs spreads than CALLs when the market is trending up and vice-versa when itâs trending down. If so, is it intentional or just a side effect of following the entry point rules.
Spread Management:
What happened in the down month? In hind-sight, what could you have done different; aside from the obvious of not entering the losing spread where you did?
Did volatility increase during the down month? If so by how much?
Have you ever considered buying back the Short-Option on a losing spread and letting the Long-Option possibly gain value if the market continues to move in the same direction?
Have you considered rolling losers instead of just closing them?
Deciding when and where to close losers seems a little bit like deciding where to put a trailing stop order on a stock. Close too early and the market could turn around and go back the other way and now you just closed an eventual winner. Close too late and lose more money.
How much âoutsideâ information do you take into consideration: current events, market trends, support and resistance, etc. or would looking at that allow more emotion to affect your decisions?
The Dashboard:
Did you develop the Dashboard yourself?
Where Iâm at:
I am pushing myself to learn as much as I can about options. I feel like I know what the pieces of the vehicle are, but I donât know how to put them together or how to drive it once itâs built. The strategy that I plan to master first is credit spreads -> Iron Condors. I will be attending a workshop on May 13-15 which uses Iron Condors as the first strategy that they teach.
In the beginning of my options experience I dabbled with selling Covered Calls and then moved on to selling Naked Puts as a method of buying and selling stocks that I wanted to âtradeâ. But I now want to do more risk management. I already know that just because a broker tells me that I have more cash or margin available to buy more spreads not to bite off more than I can lose in one month. Once you find a system that works 80-90% of the time I assume that is hard not to. But an investor has got to set rules and stick to them.
I have been looking at your journal and have some questions and comments.
Entry Points:
If entering at 60 days gives you more opportunity for rolling winning spreads, does it at the same time introduce the risk of having more losing spreads?
Do you start with more PUTs spreads than CALLs when the market is trending up and vice-versa when itâs trending down. If so, is it intentional or just a side effect of following the entry point rules.
Spread Management:
What happened in the down month? In hind-sight, what could you have done different; aside from the obvious of not entering the losing spread where you did?
Did volatility increase during the down month? If so by how much?
Have you ever considered buying back the Short-Option on a losing spread and letting the Long-Option possibly gain value if the market continues to move in the same direction?
Have you considered rolling losers instead of just closing them?
Deciding when and where to close losers seems a little bit like deciding where to put a trailing stop order on a stock. Close too early and the market could turn around and go back the other way and now you just closed an eventual winner. Close too late and lose more money.
How much âoutsideâ information do you take into consideration: current events, market trends, support and resistance, etc. or would looking at that allow more emotion to affect your decisions?
The Dashboard:
Did you develop the Dashboard yourself?
Where Iâm at:
I am pushing myself to learn as much as I can about options. I feel like I know what the pieces of the vehicle are, but I donât know how to put them together or how to drive it once itâs built. The strategy that I plan to master first is credit spreads -> Iron Condors. I will be attending a workshop on May 13-15 which uses Iron Condors as the first strategy that they teach.
In the beginning of my options experience I dabbled with selling Covered Calls and then moved on to selling Naked Puts as a method of buying and selling stocks that I wanted to âtradeâ. But I now want to do more risk management. I already know that just because a broker tells me that I have more cash or margin available to buy more spreads not to bite off more than I can lose in one month. Once you find a system that works 80-90% of the time I assume that is hard not to. But an investor has got to set rules and stick to them.
Falcon, none of the brokers have delayed quotes when you open an account so ToS nor OptionsXpress have a delay when trading.
Well thats interesting Mike. I wonder the difference between Options Express and Tos then? Doesn´t really matter, I have adapted my trades to working with what I perceive as a ten minute delay.
Thankyou for the advice though.
Thankyou for the advice though.
No broker has a delay unless you are looking at a paper trading platform perhaps. If you open an account all of the brokers will give you real time quotes.
I´ve been doing some amateurish research. I define my own ideas as being velocity and pressure. So trying these in google this morning I found something interesting called a Velocity Real Time Guage. NASDAQ OMX are selling it I guess.
Two circles. I wanted to run it for a couple of months and see what came of it. Don´t trade NASDAQ, but thought it might be workable on the indexes? Anybody tried it, the web page seems to be 2 years old.
Two circles. I wanted to run it for a couple of months and see what came of it. Don´t trade NASDAQ, but thought it might be workable on the indexes? Anybody tried it, the web page seems to be 2 years old.
No trading today. Market too quiet. So doing a bit of research trying to improve things.
Interest took me to EUROPE and something called the Euro First 100 ( EURF100 ). I wanted a chart of it, but can´t seem to find it? Anybody ever look at this thing? Sure be nice if I could pull it up on my standard chart reading free stuff.
Interest took me to EUROPE and something called the Euro First 100 ( EURF100 ). I wanted a chart of it, but can´t seem to find it? Anybody ever look at this thing? Sure be nice if I could pull it up on my standard chart reading free stuff.
most new traders lose money because they grab a profit too quickly, and stay forever in a trade that is going against them. Markets trend and chop, you can make money on a trend following system that is right only about 30-40% of the time, why because the big money is made on the big trends. There was some guy on here bragging he made 700% or something, his return $770 dollars. 
http://www.guardian.co.uk/books/201...r-by-gregory-zuckerman-review-heather-stewart
http://www.guardian.co.uk/books/201...r-by-gregory-zuckerman-review-heather-stewart
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