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My Options Play
- Thread starter Multioption
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Iwon't be here most of next week. Leave this morning. However, I thought I should clarify something. I am not a chartist that looks for patterns such as head and shoulders, triangles, coils...etc. I look at charts but only for tape reading which I see as different than patterns. I don't try to find a particular pattern. I just interpret each bar with it's volume in the context in which it is found. Some of the things I look for are: Is the range large or small? Where is the open. Where is the close? Is it an up bar or down bar? Is it a larger or smaller range than the day before? What has been the immediate trend (what is immediately to the left) Is there a gap on this bar? What did the volume do on this bar. The bar show me "what" happened. The volume shows me "how" it happened. Volume is what shows demand supply/pressures. Why? because volume is the "value" of price. Volume shows the footprint of the "smart money" or "deep pockets". Yes, price can go up on low volume but it also (if not most of time) makes sustainable moves on volume. The volume bar must also be interpreted in it's context just like the price bar. Volume and the close (this is one thing the close is useful for) are a good indicator of what the "deep pockets" are doing but there are rules to interpret their involvement. You must ask is this volume bar more or is it less than the previous volume bar.
I repeat I am not looking for price patterns in the classsical since that Jiler talks about in his book and the myriad of TA techncians. Trend lines mean little to me other then helping me to see the present trend in which I find a particular bar. Triangles, flags, coils and springs (to use some of the classical terminology of an era gone bye) mean nothing to me. I decided long ago that the patterns and similiar patterns aren't the best way to trade. I need a better edge than that to trade. Some folks can do quite well with patterns I suppose but they are not for me. I see too much subjectivity. One sees a triangle. Someone else looking at the same chart see another pattern. Look at the following post especially the first 2 or 3 pages to see the subjectivity in pattern trading. It is a bit funny to read these post. I believe later on in the thread arguments are made for or against patterns trading ..etc Interesting thread.
http://www.trade2win.com/boards/showthread.php?t=13496&page=1&pp=10
Have a good week trading next week. Won't be home most of next week.
I repeat I am not looking for price patterns in the classsical since that Jiler talks about in his book and the myriad of TA techncians. Trend lines mean little to me other then helping me to see the present trend in which I find a particular bar. Triangles, flags, coils and springs (to use some of the classical terminology of an era gone bye) mean nothing to me. I decided long ago that the patterns and similiar patterns aren't the best way to trade. I need a better edge than that to trade. Some folks can do quite well with patterns I suppose but they are not for me. I see too much subjectivity. One sees a triangle. Someone else looking at the same chart see another pattern. Look at the following post especially the first 2 or 3 pages to see the subjectivity in pattern trading. It is a bit funny to read these post. I believe later on in the thread arguments are made for or against patterns trading ..etc Interesting thread.
http://www.trade2win.com/boards/showthread.php?t=13496&page=1&pp=10
Have a good week trading next week. Won't be home most of next week.
Thanks for asking - I did the worst I could have done. I set a sell limit order for $5 on the calls instead of a trailing stop as I could not be there for the day. They must have come just short of that, then went down for the day. When I checked in an hour before close, stock was at $400.86, calls at $1.10 bid, so I sold before risking closing them worthless below $400. I had bought them a week ago Thurs. for $4.40, when stock was $397. This last week has been relatively flat in stock price movement (volatility), so I can now see how they dwindled in value, as you explained to me in another post. I'm finding I don't know near enough about options to be losing this kind of money, when most others are making money. With only a few hundred dollars left in my acc't, I'm very discouraged, again, and will be quiet in my trading til I'm a good bit more sure of what I'm doing. I'm finding most of this thread's activity is selling options, not buying them, and Pinabetal doesn't deal with them at all, which is telling me I'm not where it's at. I don't know how to find info or charts on fluctuating options volatility for a particular underlying, or a comprehensive display of the greeks, let alone learn all the implied risks of writing. There's some info on my IB's TWS, but I don't know how to use or read it. I have a lot of research to do if I'm going to continue, so I'd better get at it. I must say, making money at this is much more work than I thought. After having lost money continually over the years entrusting my money to RRSP fund managers, I vowed to do it myself and prove that it's not that hard to come out ahead! Hmmm...Quote from cnms2:
How did you manage your GOOG trade today? Was it profitable? Did you close it in the morning or later?
Sorry to hear that. I reiterate my suggestion to study the books I recommended in my postQuote from Rob on Business:
Thanks for asking - I did the worst I could have done.
... I'm finding I don't know near enough about options to be losing this kind of money, when most others are making money.
... I have a lot of research to do if I'm going to continue, so I'd better get at it. I must say, making money at this is much more work than I thought.
...
http://www.elitetrader.com/vb/showthread.php?s=&postid=883079#post883079
as well as the course I recommended in my post
http://www.elitetrader.com/vb/showthread.php?s=&postid=888931#post888931
From both Tharp's and Elder's books study carefully the money management (position sizing) chapters. They recommend that you should not risk more than 1-2% on any position you open, and not more than 6% on all your open positions. Doing so even when you go through a string of losses you'll still remain in the game. You'll not learn anything about options from these two books.
McMillan's book is the options bible, but for a pretty good introduction you can start with 21st Century's free course.
Quote from Rob on Business:
......... I'm finding I don't know near enough about options to be losing this kind of money, when most others are making money.........
Don't be fooled by the posts.
There has never been a successful live journal on option trading, stock trading, Forex, etc., including this journal. When "most others are making money" its all after the fact and can not be verified.
I have made most of my trading money using Leaps.
When I try to reduce my costs by trading shorter term options my trading is inconsistent and my winning ratio is reduced.
Leaps have one major advantage over stocks that I have been able to do on several occasions.
By using them as surrogate for stocks, you can reduce your leap cost to zero with a few good trades or scalps as I like to call them.
When you can reduce your cost to zero, you have no money invested, no risk, no loss, but you still have the underlying leap until expiration.
I have done this with PFE, SIRI, SUNW, LU to name a few.
Leaps also split when the stock splits like BZH split 3:1
So my Leaps bought at 6.00, after the split, my cost was 2.00.
Yes, you are paying for time value and bid/ask might be higher but I am not in it for the short term, so I don't care.
My objective is to reduce my cost to zero and then I can use that money somewhere else.
Its kind of like having a bunch of free and clear houses that you are collecting rent on, and you will get the appreciation, if any, when you sell, but you did not pay 100% for the cost of the house.
You only paid an option premium.
Comments.
When I try to reduce my costs by trading shorter term options my trading is inconsistent and my winning ratio is reduced.
Leaps have one major advantage over stocks that I have been able to do on several occasions.
By using them as surrogate for stocks, you can reduce your leap cost to zero with a few good trades or scalps as I like to call them.
When you can reduce your cost to zero, you have no money invested, no risk, no loss, but you still have the underlying leap until expiration.
I have done this with PFE, SIRI, SUNW, LU to name a few.
Leaps also split when the stock splits like BZH split 3:1
So my Leaps bought at 6.00, after the split, my cost was 2.00.
Yes, you are paying for time value and bid/ask might be higher but I am not in it for the short term, so I don't care.
My objective is to reduce my cost to zero and then I can use that money somewhere else.
Its kind of like having a bunch of free and clear houses that you are collecting rent on, and you will get the appreciation, if any, when you sell, but you did not pay 100% for the cost of the house.
You only paid an option premium.
Comments.
Finally APA has done its worst.
I lost $8,350 on the short leg/trade.
Without adjustment, I could have closed the position at $2,400 loss.
I'll continue to post my picks and see how far the remaining 8.5k will go by December ending.
Thanks for your contributions!
I lost $8,350 on the short leg/trade.
Without adjustment, I could have closed the position at $2,400 loss.
I'll continue to post my picks and see how far the remaining 8.5k will go by December ending.
Thanks for your contributions!
Finally APA has done its worst.
I lost $8,350 on the short leg/trade.
Without adjustment, I could have closed the position at $2,400 loss.
I'll continue to post my picks and see how far the remaining 8.5k will go by December ending.
Thanks for your contributions!
I am sorry to hear that. I am sure that you will make a big comeback. Those who deny that , I recommend them to read the following book:
The reminiscences of an stock operator.
I have done those adjustments in my trades too and I have been beaten by them but still if such a condition happens again, I might do the same. Like I shorted once a stock at 13 and I was sure it should go down to 12 but it went up to 13.50 and then I sold naked put for 12.50 for adjustment in panic and then the stock went to 14 , and I was happy that I sold those puts to reduce loss. Then the stock nose dived to 12.70 and I happily covered my short and kept my PUTs as I could not believe that it will go down more after what I saw, but it went down to 11 and I was burnt by my adjustment !!
Multi: Why don't you split your trades into two different stocks? Like instead of buying 40 calls of APA you could have bought 20 of APA and use the rest to do another trade. That way you will reduce the loss but I know that you will also un-sharpen the chance of having a big run.
I lost $8,350 on the short leg/trade.
Without adjustment, I could have closed the position at $2,400 loss.
I'll continue to post my picks and see how far the remaining 8.5k will go by December ending.
Thanks for your contributions!
I am sorry to hear that. I am sure that you will make a big comeback. Those who deny that , I recommend them to read the following book:
The reminiscences of an stock operator.
I have done those adjustments in my trades too and I have been beaten by them but still if such a condition happens again, I might do the same. Like I shorted once a stock at 13 and I was sure it should go down to 12 but it went up to 13.50 and then I sold naked put for 12.50 for adjustment in panic and then the stock went to 14 , and I was happy that I sold those puts to reduce loss. Then the stock nose dived to 12.70 and I happily covered my short and kept my PUTs as I could not believe that it will go down more after what I saw, but it went down to 11 and I was burnt by my adjustment !!
Multi: Why don't you split your trades into two different stocks? Like instead of buying 40 calls of APA you could have bought 20 of APA and use the rest to do another trade. That way you will reduce the loss but I know that you will also un-sharpen the chance of having a big run.
Thanks hajimow. I can't do multiple trades due to my technical approach; at least for now. I search for trades manually, starting from intraday to the daily and weekly, I also switch back and forth from the weekly to intraday. I can't lose the original start-up capital - 10K, but getting to 100K by December ending is now a pipe dream. I will continue to post my trades for the fun of it!Quote from hajimow:
I am sorry to hear that. I am sure that you will make a big comeback. Those who deny that , I recommend them to read the following book:
The reminiscences of an stock operator.
I have done those adjustments in my trades too and I have been beaten by them but still if such a condition happens again, I might do the same. Like I shorted once a stock at 13 and I was sure it should go down to 12 but it went up to 13.50 and then I sold naked put for 12.50 for adjustment in panic and then the stock went to 14 , and I was happy that I sold those puts to reduce loss. Then the stock nose dived to 12.70 and I happily covered my short and kept my PUTs as I could not believe that it will go down more after what I saw, but it went down to 11 and I was burnt by my adjustment !!
Multi: Why don't you split your trades into two different stocks? Like instead of buying 40 calls of APA you could have bought 20 of APA and use the rest to do another trade. That way you will reduce the loss but I know that you will also un-sharpen the chance of having a big run.
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