What is psychology needed for make living from trading ??

[lynx2004]

Quote from Rimping:

If you want predictable, steady returns, the end is always a blow-up.
Read: Fooled by Randomness (Taleb)

Trader A:
year 1: 35%
year 2: -15%
year 3: 75%
year 4: 104%
year 5: -20%
year 6: -5%
year 7: 15%
year 8: 28%

Trader B:
year 1: 21%
year 2: 20%
year 3: 18%
year 4: 23%
year 5: 21%
year 6: 21%
year 7: 22%
year 8: 22%

Both traders make on average 21% per year.
Which trader is the safest? It is trader A and not B. Trader A is likely to go on like this. Trader B in one bad year will lose 98% and then it is over.

Good point. I believe this to be true also. Trader B seem to have capped the upside and believes his/her risk management is sound and also believes he/she has a formula to systematically take money out of the markets. What happens to such systems? Anyway, I believe Trader A is the one to bet on for the long-run even with the higher volatility of returns.

 

[ammo]

Quote from nell:

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

first of all,when you have a strangle,straddle,condor ,iron condor,box and a lot of other strategies,you can always lift a leg temporarily and put it back out,oex short 545 /50 call sprd, $3 and short the 535/30 put sprd $2,you could be long the 615/20 call sprd for 35 cents and the 470/75 put sprd for 35 cents,now if the market moves in one direction for 300 points your going to lose less or make more, thats the easy way. Another way is .... If you watch the uvol/dvol comparison chart and the uvol is flat lining and the dvol is going steadily up,you can see from this pattern that we are in a down TREND day,you could buy a few of your 535 short puts back and put it back out at the end of the day ,or cover your long put and close out your call sprd

 

[nell]

Quote from crgarcia:

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.

the things about naked options is there's maximum risk. and minimum ROI.

I still don't get it, why people just selling naked options while they can do vertical spread and give lots of benefit for that ?

Do you know the comparison ? please let me know as i want to know too how this naked options works

thx

 

[eagle]

You discovered it some day in the past by yourself, right.

Quote from TraderZones:

You see, compounding works in both directions. It is the most powerful force on earth for making your money disappear also!!!