What is psychology needed for make living from trading ??

Quote from Jasonn:

I respect guys like you, but I am glad I am not you

you decided that market it complex, thus you took eons to learn it in a complex way

I on the other hand assumed market it simple, and learned it in that regard

still took me 4-5 years though :D
More...

Hi Jasonn,

as comrades, I also want to give you some story of my experience.

At first time, i also thinking like you - simplicity is the best ! I always think like that, I only want bother things that have relation with my trading, and other else (news/indicator/oscillator) i don't want to see, i even don't want to learn all of those garbage (that time i feel it's garbage :d)

But until my brother shared his experience in his trading, i found out - we must learn all of that, we must know everything that have relationship with trading (even psychology, and others that maybe not related but you feel you need to learn).

Eventhough all that won't necessary, but it must be part of our journey. At some point we will feel trading is very complicated. But after you reach the point that you already enough (not means enough to learn), we will find your own simplicity (our own mindset principle, our own very simple trading system, our own easy portfolio management,etc).

That's what my feeling brings me

Bottomline, YES - simplicity is the best (don't get complicated !) but before reach "simple" we must have a journey that might be very complicated
 
when you sell option premium in anything,you need to keep an eyeon the volatility/,u should always own a handful of cheao puts and calls for insurance,/you will make less,but your blowup days will be a lot smalller,/in this case the smaller profit would still be in your acct,/if your nervous then trade very small,but never stop working/ this business is constantly evolving and you must adapt/,it sucks taking a big hit but you said it was only 30% of your acct/ a lot of guys got wiped out on the spx opening/pros/so don't feel bad/just stay small til this mess clears a little/having small manageable positions in this market can be very profitable when we get this much movement perday/it also allows you the freedom to jump on a move/so never despair...that's my personal philosophy
 
Quote from nell:

Sorry Rimping, it seems I also agree with Jasonn !

anyway, it's a good ilustration you've been giving me-i have think that for this whole year

I always in argue with my brother about this too :) because he's the trader A, and I'm the trader B

I think there's no bad or no good with trader A or B, everyone have their own stance. Mostly, their character is :

Trader A : Reward bigger than risk, smaller winning ratio, targeting for the big bang but do very small stop loss

Trader B : Reward and risk almost equal, maybe some of them risk 3 only to get 1 in order to buy bigger probability and consistency, bigger probability ratio, range of stop loss wider


How do you think ?
More...


Thank you for giving your view.
I (of course) am more like trader A in my example. I think the real lasting money in this industry is made when you are in the big trends.
The drawdowns in example A don't occur because of too much risk. I for myself never risk more than half a percent of total equity on any trade. But if you follow 20 markets and you get stopped out a couple of times in a row it can add up of course. But the largest drawdowns occur when you give back large parts of your profits.

When those who scoop in regular profits like trader B, go broke the trader A's in this world get rich. Like this year for example. The banks that bought all those "safe" mortgage product got burned. On the other hand many good traders who got into the big moves on time tripled or quadrupled their money.

Of course the way trader B operates appeals to many more people than the way trader A operates. Trader B probably has no difficulty in attracting a lot of money. People don't realize that when such a consistent trading record is shown there really is a big risk of complete blow-up.

I recommend everybody to read "Fooled by Randomness" by Nassim Nicholas Taleb.
 
Quote from Rimping:

The results of trader A are indicative of a sound (trendfollowing) trading programm.

The results of trader B are indicative of some "magic" or a "100% sure strategy". The end result is always the same. If you don't want to have any risks the end is often a catastrophe.
More...

Trader B is pretty much the record of Buffett, Soros, or Robertson in their first decade (actually a bit lower).
 
Quote from Cutten:

Trader B is pretty much the record of Buffett, Soros, or Robertson in their first decade (actually a bit lower).
More...

Sorry Cutten. I am not sure you write this on purpose. I assume you mean to say those people you mention are more like trader A.
 
Nell,

I empathize with your situation. The IC strategy and your trading plan you have been using seems to have served you well in the past, therefore there is no reason why you it cant work for you again. I do however, suggest you refrain from any trading till you get your mental trading game sorted out. I'm a firm believer that trading is 80% psychology & 20% methodology.

Read 'Trading in the Zone' by Mark Douglas, it will put things back into perspective.
 
Quote from ammo:

when you sell option premium in anything,you need to keep an eyeon the volatility/,u should always own a handful of cheao puts and calls for insurance,/you will make less,but your blowup days will be a lot smalller,/in this case the smaller profit would still be in your acct,/if your nervous then trade very small,but never stop working/ this business is constantly evolving and you must adapt/,it sucks taking a big hit but you said it was only 30% of your acct/ a lot of guys got wiped out on the spx opening/pros/so don't feel bad/just stay small til this mess clears a little/having small manageable positions in this market can be very profitable when we get this much movement perday/it also allows you the freedom to jump on a move/so never despair...that's my personal philosophy
More...

thx for the support !

I have some question for you, how i gonna trick the volatility ?

If you said buy debit spread or strangle/straddle, how is it ? can you give me example for that ?

in my head, i think is sell 10 IC and buy 1 straddle, is it something like that ?

trade small is right, buddy ! but it still wipe my emotions. I only trade half of my capital this month, but it also blew me out :D
 
Quote from Grinder:

Nell,

I empathize with your situation. The IC strategy and your trading plan you have been using seems to have served you well in the past, therefore there is no reason why you it cant work for you again. I do however, suggest you refrain from any trading till you get your mental trading game sorted out. I'm a firm believer that trading is 80% psychology & 20% methodology.

Read 'Trading in the Zone' by Mark Douglas, it will put things back into perspective.
More...

good inspiration buddy !

Appreciate it! i will read that book and hopefully i can find some light there

thx
 
Quote from nell:

Hi guys,

I'm in my thirty right now, and wants about make living from trading. My previous work is self employed, I have some trading (the real trading) business - anyway, i have seen Stock trading is the best way and I focusing in this right now.

I just want to know, who's using credit spread as their strategy month to month and compounding them ?

I use Iron Condor, and use them for a nice whole year, until recently my accounts blew up :(

It took my whole profit + 15% loss from my whole capital. It's around $20,000 loss up to now. Damn !!

My Iron condor criteria, i always using probability of touching 90% (based on IV), if you using TOS - you will know that. Usually the range between strike price and current price is about 10% And target for 6%-10% profit only.

Most of the time i let it expired worthless, because with my target only 6%-10% it hard for me to close it 10 days before expiration and else I already do a backtest, I calculate month to month highest close-lowest close and it rarely exceed 10% ranging.

If it's close/touch to my strike price, most of the time i roll it down around 5% of the strike price to lower the loss. I never let it go below my strike price whatever the market issue is. And most of the time is works

I usually trade with index RUT/SPX/NDX - and some IWM/SPY/QQQQ/DIA/DJX.

I have a nice profit during 8-9 months and I compound it step by step, I think i already get around 50%-60% profit because of my compound. Yes, there's some lose, but entirely my portfolio was good, if I loss 1-2, i still win on the other.

My blue print plan is, I know within 1 year - I will loss 1-3 times eventhough my Iron condor is high probability strategy, I already prepare to risk 30% of the margin of each stock, and based on my calculation - it still give profit for a whole year.

But this month, i blew up - i only use half of my money, but I loss around 70%, it sucks man !! It's because panic selling (only in a week, most of index go down more than 10% and it makes me to close/roll down my put spread). Honestly, I put my emotion too that time, and let fear controlling me.

The things right now, I'm about to make living from trading. But the time I want to start, my accounts blew up. I confuse right now, i decide to not trading anything from now. But who's paying for my living cost ?

The best way is i trade again, but with my current mindset and my emotion i need time to gain more confidence and clear my mind.

What is the best credit spread strategy that give consistent profit (eventhough it's small) with high probability ?
What do i need to trading for living ? I know I must eliminate emotion and to be discipline, i already apply that.

I have loss my confidence right now, but i still believe i can make living from trading

What must i do right now ?
I want to ask some advice with you guys, most of you more professional and more experience.I only need positive advice, please do not give any comments if you are only want to pick a fight and just to make me down. My future depends on this.

I think i need input from you, especially those who already do trade for a living from your own pocket money (not a broker/fund manager/etc), I want to learn from you as I about to start.


Hope get the best from you !!
More...
First, to make a living the most important thing is to have enough funds in your acount.

Even a mediocre trader can make a living of a $million+ account.
(100k/year = 10%)

It would be very hard to make a living of a $10k account.
(100k/year = 1000%)

If you want to make money selling options forget about spreads and condors.
Sell naked options or strangles. DON"T OVERPOSITION, and don't overtrade; options are medium-term strategies.
 
You must log in or register to reply here.
Back
Top