Michael
Well December for my new trading returned 12%
So far, the first day of January I´m up 7% on account ( ROI net profit) 2011
This is straight option buying, selling.
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CREDIT SPREAD TRADING EXPERIENCE ( 8 MONTHS ) 2010
Credit Spread trading turned out for me to be disastrous. In eight months, I made about $13,000 in four months each time, using roughly a $25,000 risk capital. Then I got hit and had to exit and ended up with big loss. $13,000 wins against $25,000 losses each time. It was essentially 8 months wasted.
It there is a trick to it, BRAD seems to work it okay? From my understanding he rolls over the losing hits, or near hits into the next month.
His worst year was when he got hit four months and had to rollover to next month. If he has good Bull years, it is easier and he has no hits. His annual return was anywhere from 33% to 92% per annum.
Most of those losing rollovers he tries to get out with zero gain-loss situations. This is not always possible, but he manages to work it out okay by rolling over. Then the ones he cannot break even on for losing month trades, he must deduct from his annual return. I see one year he actually had four losing months in a row, for zero returns. His wins and rollover losses breaking even.
I may look at it again sometime. I certainly liked the weekly credit spread, which never failed me at all. But right now I have two months thereabouts invested in building my new straight option buying system. The risk reward ratio is more attractive! I typically can get a 30% return against the risk capital in individual trades. Which beats the heck out of credit spreads that only return 3% to 5% normally, return to individual trade risk capital.
The trick on this so far I´ve decided is to follow Jesse Livermore´s advice and sit on my hands and do nothing. You only need two winning trades per month and sit the rest of the month reading a book, playing the guitar, or dozing in the hammock, while waiting for a trade setup. I´m not sure yet, but figure two to five trades a month is possible. My goal is 10% a month and hopefully no losses.
Happy New Year and I´m glad to be back in the trading saddle after the Xmas and New Years holidays. I was getting bored reading books and the television does not interest me much.
