success rate for option traders?
- Thread starter mynd66
- Start date
At least, that's how my neutral trading system works.Most options sellers and only sellers can make money year after year after year are neutral, or slightly bearish/bullish.
This is one way to do it, another way is to be trend followers.
In both cases you never try to pick up bottoms or tops, you let them pick themselves and you do your best to leave your ego/opinion out of the door before placing trades that are based on probabilities.
In both cases money management is critical.
There 100 ways to make money and 1000 to lose it. One way is not better than another per se, it depends on many things. That's why the people who last in this biz are so few in numbers.
Most traders lack the necessary discipline and skills to make money in both up and down markets and have a gambler mentality. This year is a lesson for all. Yesterdayâs winners are todayâs losers.
For instance no one cares whatever or not a " Butterfly spread " widens toward expiration. Most traders are just in for the thrill and want to make quick money.
When you have one "lucky trader" (someone who does make a killing) there is going to be a lot of buzz and excitement and more traders will attempt to win the lottery.
And it does not matter how many time you show them or tell them, most traders just want to lose money...and they will.
I have been trading for 3 years, my first year does not show but it was + 20%. The first thing that I learned was how not to destroy my account, if you can do that , it is a matter of time, the money will come eventually.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2233872#post2233872
This is one way to do it, another way is to be trend followers.
In both cases you never try to pick up bottoms or tops, you let them pick themselves and you do your best to leave your ego/opinion out of the door before placing trades that are based on probabilities.
In both cases money management is critical.
There 100 ways to make money and 1000 to lose it. One way is not better than another per se, it depends on many things. That's why the people who last in this biz are so few in numbers.
Most traders lack the necessary discipline and skills to make money in both up and down markets and have a gambler mentality. This year is a lesson for all. Yesterdayâs winners are todayâs losers.
For instance no one cares whatever or not a " Butterfly spread " widens toward expiration. Most traders are just in for the thrill and want to make quick money.
When you have one "lucky trader" (someone who does make a killing) there is going to be a lot of buzz and excitement and more traders will attempt to win the lottery.
And it does not matter how many time you show them or tell them, most traders just want to lose money...and they will.
I have been trading for 3 years, my first year does not show but it was + 20%. The first thing that I learned was how not to destroy my account, if you can do that , it is a matter of time, the money will come eventually.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2233872#post2233872
Just for general information purposes.
I actually decreased the account I trade with. Yeah, decreased it. The reason? I wanted to get good.
When I had a larger account size I felt a little twinge of invincibility, or at least an air of allowing myself mistakes and writing them off easier as they "were part of draw down".
I feel now that if you start with a larger account some people have a tendency to relax, until the account goes TOO far down (approaches the 0 mark rather than the infinite upward mark).
So if anyone intends to get into the options (exclusively options), I would suggest to them to consider a smaller account $500 minimum and no more than $2-3K. The reason? Yeah your not going to make a killing $100,000 or something, but what you SHOULD learn is to treat each trade as a precious action, something that you CAN NOT afford to screw up on. It should force you, if you treat and approach it with the right mentality, to hone your skills with more precision because each trade MUST count.
Just a personal tid bit, my account value for options trading is $2,000 starting as of January 1st. And my style is similar to day trading stocks, in one day out the other day, so it can be done. It forces me to be very attentive to what's going on in the market, but that's all personal style (yes I have experience via equities first).
Good luck to all. Great posts.
I actually decreased the account I trade with. Yeah, decreased it. The reason? I wanted to get good.
When I had a larger account size I felt a little twinge of invincibility, or at least an air of allowing myself mistakes and writing them off easier as they "were part of draw down".
I feel now that if you start with a larger account some people have a tendency to relax, until the account goes TOO far down (approaches the 0 mark rather than the infinite upward mark).
So if anyone intends to get into the options (exclusively options), I would suggest to them to consider a smaller account $500 minimum and no more than $2-3K. The reason? Yeah your not going to make a killing $100,000 or something, but what you SHOULD learn is to treat each trade as a precious action, something that you CAN NOT afford to screw up on. It should force you, if you treat and approach it with the right mentality, to hone your skills with more precision because each trade MUST count.
Just a personal tid bit, my account value for options trading is $2,000 starting as of January 1st. And my style is similar to day trading stocks, in one day out the other day, so it can be done. It forces me to be very attentive to what's going on in the market, but that's all personal style (yes I have experience via equities first).
Good luck to all. Great posts.
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Helpful-9990
Business sucess rate overall is about 20% win,80% lose;
however the Commerce Dept says its now 30%, within 7 years.
Another edge some sellers have , maybe a fews buyers;
they run it like a business, insurance business.
However stock, and more so options are the more difficult businesses i have been in. Even the liquid ones , the small % of liquid ones.
Got an excellant business book on commrcial real estate options, but never,never could agree on a fair price for RE option, so use cash/some lending............................LOL.
RE options , typically may not be liquid.......