I hate this situation

farmerjohn1324 · Mar 8, 2022

smallfil said:
I tried Forex and did not like the very high leverage. Way too high risk in my opinion. Stock options is what I buy, calls and puts so that, worst case scenario is I lose 100% of the option premium. That is the most I can ever lose but, my upside is unlimited on calls, limited gains up to zero in the case of puts. With this leverage, earning 100%, 200%, 300% is possible risking only $100-$600 per contract. Other times, you will get 50%, 80% 90% which is fine too.

How long does it take your options trades to materialize, on average?

farmerjohn1324 · Mar 8, 2022

VEGASDESERT said:
your first clue that something was not right is when you gained 5k in less than
a week on a 40k account.

Why is that? Too high leverage?

I was just making common sense guesses based on movements towards risk havens (and AUD) in the wake of Russia invasion.

smallfil · Mar 8, 2022

farmerjohn1324 said:
How long does it take your options trades to materialize, on average?

It depends on how the trade is going along. There are times, I have huge gains within a week to 10 days. Other times, it takes 1 month or 2 months. Usually, I am out of my trades at the 2 month date. On the other hand, if I lose say, 50% or more of the options premium, I will cut my losses and close the trade. If my mental stop loss is hit, I will exit the trade, even if there is only a small, tiny loss. I am more concerned about keeping the losses small. I can take a lot of small losses knowing, one huge winning trade, wipes out all those tiny losses.

Scataphagos · Mar 8, 2022

farmerjohn1324 said:
If I were to set a Stop-Loss to exit the trade before it gets too bad, then that would subject me to random market noise as opposed to fundamentals.

1. Forget fundamentals
2. Learn Technical Analysis so that you know where the best risk:reward plays are
3. Avoid leverage until you're well experienced
4. Trade with stops. If you can't exercise mental stop, place a hard one when you place your trade.

smallfil · Mar 8, 2022

farmerjohn1324 said:
Why is that? Too high leverage?

I was just making common sense guesses based on movements towards risk havens (and AUD) in the wake of Russia invasion.

Forex is like 100/1 leverage if I recall correctly. That is too high of a leverage in my opinion.

farmerjohn1324 · Mar 8, 2022

smallfil said:
Forex is like 100/1 leverage if I recall correctly. That is too high of a leverage in my opinion.

This is max 50:1, but differs by pair.

easymon1 · Mar 8, 2022

FJ, don't pay any attention to them. Who needs a system. Let 'er rip Skip! Devil take the hindmost. It's only money.

Scataphagos · Mar 8, 2022

farmerjohn1324 said:
This is max 50:1, but differs by pair.

You speak of "50:1" leverage like it's "normal". I've been trading a long time and I've rarely had my leverage at 2:1... and I'm still here. However "pairs" are a bit different in that they bet differential. Then again... BOTH sides can go against you at once, as you well know.

farmerjohn1324 · Mar 8, 2022

Scataphagos said:
You speak of "50:1" leverage like it's "normal". I've been trading a long time and I've rarely had my leverage at 2:1... and I'm still here.

I have to aim for 100% annual ROI in order to match what I do otherwise.

farmerjohn1324 · Mar 8, 2022

easymon1 said:
FJ, don't pay any attention to them. Who needs a system. Let 'er rip Skip! Devil take the hindmost. It's only money.

I'd love to ... But then I'd lose my whole account once every week lol

I just made $2000 since I made this post! By which I mean that I'm now only down $23k.