Looking for Advice
- Thread starter Pathus
- Start date
Since the first time I heard about options, I became fascinated by them. One could never learn enough on this subject..
Based on my experience, chances are you will blow a few accounts over a period of some years.
If after all those loses, you still are interested and can afford it, then you might have a chance in becoming a multi millionare someday.
A few rules and realities for you to ponder.
If you buy options, you have one in nine chances of making
money (+200% or more ) on your initial investment.
If you sell options for premium you have a 8 in nine chances of making money (from 1 to 20%mx per trade) but your risk can be unlimited and the spread and commisions take a huge chunk of your predetermined income.
If you are like me, supposedly intelligent, smart, tolerant to high risk, aggresive and very assertive, then it will problably take you longer to consistantly make money trading options.
I believe to trade this type of high risk/leverage instrument being smarter is a handicap. Simply following the rules, not getting greedy and playing by the book can payoff, which is difficult to do when you want to be smarter than the next guy....
I am not the slower, play by the book type, I like speed, so learning how to tame the option beast without sacrificing my style has been a very humbling experience.
I don't like to follow all the rules all the time, and I trade based on what the charts are teling me and what is happening.
My charts are my bible and trade what the charts tell me regardless of everything else and everybody else is saying.
Including when it doens't make any sense, even to me, my charts still rule.
I blew several 10 to 30K accounts through the last 5 years.
Last year finally I proved myself right and had my first
profitable year, with a more than 10,000% ROI.
I got lucky. And I know it.
At the end of last year I made speculating in options my full time endevour.
If this is the path you are looking to venture in, prepare to have to study an incredible amount of books, have a second source of income until you are consistently making money trading options and of course, be prepared to blow several 7K accounts as part as your training costs.
Good Luck !
Based on my experience, chances are you will blow a few accounts over a period of some years.
If after all those loses, you still are interested and can afford it, then you might have a chance in becoming a multi millionare someday.
A few rules and realities for you to ponder.
If you buy options, you have one in nine chances of making
money (+200% or more ) on your initial investment.
If you sell options for premium you have a 8 in nine chances of making money (from 1 to 20%mx per trade) but your risk can be unlimited and the spread and commisions take a huge chunk of your predetermined income.
If you are like me, supposedly intelligent, smart, tolerant to high risk, aggresive and very assertive, then it will problably take you longer to consistantly make money trading options.
I believe to trade this type of high risk/leverage instrument being smarter is a handicap. Simply following the rules, not getting greedy and playing by the book can payoff, which is difficult to do when you want to be smarter than the next guy....
I am not the slower, play by the book type, I like speed, so learning how to tame the option beast without sacrificing my style has been a very humbling experience.
I don't like to follow all the rules all the time, and I trade based on what the charts are teling me and what is happening.
My charts are my bible and trade what the charts tell me regardless of everything else and everybody else is saying.
Including when it doens't make any sense, even to me, my charts still rule.
I blew several 10 to 30K accounts through the last 5 years.
Last year finally I proved myself right and had my first
profitable year, with a more than 10,000% ROI.
I got lucky. And I know it.
At the end of last year I made speculating in options my full time endevour.
If this is the path you are looking to venture in, prepare to have to study an incredible amount of books, have a second source of income until you are consistently making money trading options and of course, be prepared to blow several 7K accounts as part as your training costs.
Good Luck !
For the most part, your success with options strategies will depend on your success in predicting the movement, or lack of, the underlying security.
Read that last sentence 10 times.
If you are not an experienced trader, and if you don't have confidence in your ability to profit from trading the underlying itself, then options will only accelerate your losses.
Conversely, if you ARE a successful trader, then stick with the underlying where you won't be paying for the ridiculous spreads and decay.
There is no magic bullet.
================
Pathus;
Truth teller told you the truth;
for sure dont add the decay & leverage of options, while learning to trade.
All of Jack Schwager, William o Neil are amoung the best books.
Also like ooccasionl options myself ;
but the option seller has the advantage during a sideways trend also.
And timing is more critical even with ITM options.