Options Vs Spot Forex
- Thread starter Cotters14
- Start date
I say this with kindness 
:
I do not think your issue is the trading strategy that you are using, but rather the fact that you are risk adverse, second-think your trades, and switch your behavior as the market moves.
Regardless of how you trade, those aspects of your personality will remain and may only go away with experience.
Not that it's bad. It's better than being so gung ho on risk you bet the farm
What it does mean is you perhaps want to look at strategies where your max loss is acceptable. If you enter a trade and know the absolute maximum you can loose is so small you won't bat a lid at, then you are less likely to reverse that trade and be sad you pulled out so soon.
Simple example, if you paired each trade with a stop loss or option such that your max loss was 10$/trade. Then you are unlikely to pull out. You can go do other things, sleep, whatever, and know you got nothing to worry about.
Find your warm-fuzzy point, and trade accordingly.
:I do not think your issue is the trading strategy that you are using, but rather the fact that you are risk adverse, second-think your trades, and switch your behavior as the market moves.
Regardless of how you trade, those aspects of your personality will remain and may only go away with experience.
Not that it's bad. It's better than being so gung ho on risk you bet the farm
What it does mean is you perhaps want to look at strategies where your max loss is acceptable. If you enter a trade and know the absolute maximum you can loose is so small you won't bat a lid at, then you are less likely to reverse that trade and be sad you pulled out so soon.
Simple example, if you paired each trade with a stop loss or option such that your max loss was 10$/trade. Then you are unlikely to pull out. You can go do other things, sleep, whatever, and know you got nothing to worry about.
Find your warm-fuzzy point, and trade accordingly.
I say this with kindness
I do not think your issue is the trading strategy that you are using, but rather the fact that you are risk adverse, second-think your trades, and switch your behavior as the market moves.
Regardless of how you trade, those aspects of your personality will remain and may only go away with experience.
Not that it's bad. It's better than being so gung ho on risk you bet the farm
What it does mean is you perhaps want to look at strategies where your max loss is acceptable. If you enter a trade and know the absolute maximum you can loose is so small you won't bat a lid at, then you are less likely to reverse that trade and be sad you pulled out so soon.
Simple example, if you paired each trade with a stop loss or option such that your max loss was 10$/trade. Then you are unlikely to pull out. You can go do other things, sleep, whatever, and know you got nothing to worry about.
Find your warm-fuzzy point, and trade accordingly.
Thanks for the reply HappyTrader, I'll never take any advice the wrong way...we can all learn something in someone's comments.
My risk aversion is simply I will never risk more than 2% on a trade and usually if I get 50 pips offered up then I start to close the trade out and leave just a portion on in case a bigger move occurs. I'll never change this as it has worked well for me over the past 12 months and seen me grow my account very consistently from its starting balance.
The use of options is to try and exploit my analysis skills as I am confident in my trading ability and while I don't want that to sound cocky I often can see a level price is reaching too and I think options may suit as an additional profit option.
As another poster mentioned I think I just need to put some demo call and put options out there and see how they pan out.
For example today, I bought the USDCAD (as noted earlier this morning) risking 0.5% and made 65 pips which resulted in a 2% gain in my account.
I belive we are heading higher in this pair and so I have bought a 1.3400 call option and so I will wait and see how this payout compares (if the level is reached that is) versus my day trading strategy and see how this compares.
Maybe my niche will be with the shorter day trading strategy which has served me well in my career so far but by looking and testing I will find the answer as to whether options are a viable options for me.
Thanks again
If you expect a move, it should occur within a certain period of time. You should compare this Nov option to one nearer. I believe the nearby will gain more with a move in cad. I guess they call that Delta. The point is, if we have to wait too long for this trade to work, it's probably no longer a valid trade. Plus you're paying lots of premium for no reason. If this were a hedge it would be different. Breakouts tend to be swift and sure when they work. Probably need to define a time frame for aborting the call and moving on, saving the premium.
I made a LOT of $$$$s from options very quickly and blew most of them over night, so mixed feelings.
Just remember with options, if the price doesn't move you still lose money, avoid in anything other than strong trending markets.
IF I'd of flipped to calls my 6k account would of been 100k+ inside of a week lol i blew 20k thankfully of the profits, only started with 2k
I've been trading forex and dax since via spot account., also a hard hard game.
Just remember with options, if the price doesn't move you still lose money, avoid in anything other than strong trending markets.
IF I'd of flipped to calls my 6k account would of been 100k+ inside of a week lol i blew 20k thankfully of the profits, only started with 2k
I've been trading forex and dax since via spot account., also a hard hard game.
I made a LOT of $$$$s from options very quickly and blew most of them over night, so mixed feelings.
IF I'd of flipped to calls my 6k account would of been 100k+ inside of a week lol i blew 20k thankfully of the profits, only started with 2k
Options are sexy -- but everything in trading and in life...can be a double-edged sword.
