The ACD Method

Maverick74 said:
Max, the only advice I can give you is try to evolve. The biggest mistake traders make is in labeling themselves as one type of trader or focusing only on one product. We talk about everything here from equities to interest rates, currencies, commodities and all the spread combinations of them all. If you hang around here you are going to learn a lot about the Yen. :)
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Yeah your right, only starting to learn that now..... i got lazy over the last 3 years cause my systems stuff was paying out big, so i wouldnt do anything during the day, big mistake. Having to learn trading all over again.
 
For you FX home gamers out there, he is a correlation table for your FX pairs.
 

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Here is a snapshot of USD/JPY both historical and implied vol as well as the risk reversal measured against price.
 

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Guys, could you recommend how I can get started with learning options? There is a ton of advice out there but I was thinking of leveraging options specifically from the point of view of ACD. For instance, start of the quarterly/yearly sessions, if I get a bullish ACD bias, instead of getting long futures, maybe I can minimize my risk and take the same trade using options. I know nothing about options except the very basics. This is something I am looking to implement in the next couple of years so any help with getting started for the moment is appreciated. Once I am a little bit more knowledgeable, I will be more specific in asking the right questions.

Thanks.

PS: Just wanted to add that I am limited to trading energy commodities so my focus, for the foreseeable future, will remain energy commodities.
 
logicaltrader said:
Guys, could you recommend how I can get started with learning options? There is a ton of advice out there but I was thinking of leveraging options specifically from the point of view of ACD. For instance, start of the quarterly/yearly sessions, if I get a bullish ACD bias, instead of getting long futures, maybe I can minimize my risk and take the same trade using options. I know nothing about options except the very basics. This is something I am looking to implement in the next couple of years so any help with getting started for the moment is appreciated. Once I am a little bit more knowledgeable, I will be more specific in asking the right questions.

Thanks.

PS: Just wanted to add that I am limited to trading energy commodities so my focus, for the foreseeable future, will remain energy commodities.
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The two best books on theory are "Option Volatility and Pricing" and "Option Market Making". After you read those two, all of the Augen books are great on the more subtle aspects of option trading. I cannot stress to you enough how important it is to learn and understand the theory cold. The reason being is that once you start trading them there are drastic differences between options on equities, indices, energy and currencies and bonds. You MUST understand this. Options are multidimensional in nature and each of those underlying products are multi-dimensional in nature so combined they are very complex.
 
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