I already know all the basics but I keep getting caught on the wrong side of the fence. Dont get me wrong I have made some profitable trades but now that I have entered the options market I have been getting burned left and right. I know the smart thing would be to find a different market but since I have a small account I thought the options market would be the fastest way to build up my capital. What other options do I have? NO JOKES
When to get into a trade
- Thread starter pjmalcolm1
- Start date
Futures Market !
And the main thing with starting to trade Futures is to just survive and try to lose as little as possible. I have been at it over 5 months now full time. And over 9 months of continual study of it. And as each month goes by my surviving is turning more into thriving as I get a feel for YM each and everyday trading(live) and watching it.
The number one thing thAT has turned me into a profitable eminis trader the last 3 months is learning to trade "counter intuitively " to what the herd is doing. Thinking and executing like the noobie retail trader will get you to the poor house very quickly. The catch is too hang around long enough where with your experience you can think like a noobie retail trader and get in the head of the noobie trader but when you
actually trade you trade like a professional. And trade on the side with the smart money and on the opposite side of the inexperienced retail trader.
I am totally convinced anyone with time and patieince can have success with Futures. Let me state though that starting with 5k and making a Living after a few months is going to be somewhat unrealistic.
Thats the catch 22 with Futures. To have success at it you pretty much got to devote each and everyday to it. But most people cant do this because they have a full time job. So when they decide to quit their jobs to trade futures then they have to start betting large from the git go to live off of and pay bills !! Which guess what happens ?? They blow up because of inexperience mixed with overleveraged position sizing.
And they lose most of their stake and have to go back to the 8 to 5 grind. Thats why people end up quitting 3 to 6 months after starting futures trading.
Luckily, for myself I have another source of income with swing trading and also a residual income from a business I did years ago.
This keeps my survival rate in the eminis alive and well and it keeps getting better as each month goes by.
And incidentally , it doesnt hurt that wifey has a strong salaried job as a backup to everything else
Its all about having a strategic and executable plan to reach and realize your goals. And not just roll the dice and hope for the home run.
I'll give you the Cliff Notes version of the Holy Grail and you practice this on paper/simulator until you produce consistent profits.
- Determine the trend, if any
Downtrend = lower highs, lower lows
Uptrend = higher highs, higher lows
Stay out of the following:
Congestion = higher lows, lower highs
Consolidation = horizontal lows/highs
...when you get more experienced you can profit off Consolidation, for now, stick to clear trends.
- If Uptrend
Buy a pullback and be nimble with your target. Stop ? Whatever would make it a lower low aka change of trend.
-If Downtrend
Short a pop up and be nimble with your target. Stop? Whatever would make it a higher high aka change of trend.
-If stopped out, again, a change of a trend
Stay on the sidelines unless a new trend is defined.
Reversals are rare, yet people call them all the time, so never call a top, never call a bottom, never say too high or too low, the market has no boundaries. Stick EXCLUSIVELY to the above.
Be extremely disciplined and in time you will gain the skill to do it right.
As you get more experienced, combine with averaging up and to the moon you go.
Freebie for you and/or to those struggling
Anek
Good question. AFAIK (and I could be totally wrong), most option players are hedgers, not directional traders. Assuming your previous trades were directional ones (stocks?), you'll probably want to read a basic book on options trading to get familiar with all the hedging schemes they use. Good luck.
I did Options for a couple of years and I think that most retail traders get wiped out sooner or later. I know there are some succesful ones. But they are far and few between !!!
The main reasoning I got away from Options is the risk you had carrying a position overnight. If you had some Calls on a stock and held on past intraday, and that stock had bad news in premarket the next morning then the value of your premium plummetted. And to get back to break even , the stock had to climb well past its original level when you first bought it .
Mainly, this is due to the fact of Time decay. A wicked and ugly variable that you have to deal with in Options. Time Decay really sux. Its ripped the souls out of many of traders
Anyway, to me intraday trading the emini futures is such a better way to go. All the way around.
Much less risk , imho !!
The main reasoning I got away from Options is the risk you had carrying a position overnight. If you had some Calls on a stock and held on past intraday, and that stock had bad news in premarket the next morning then the value of your premium plummetted. And to get back to break even , the stock had to climb well past its original level when you first bought it .
Mainly, this is due to the fact of Time decay. A wicked and ugly variable that you have to deal with in Options. Time Decay really sux. Its ripped the souls out of many of traders
Anyway, to me intraday trading the emini futures is such a better way to go. All the way around.
Much less risk , imho !!