It really is not that hard..all one need do is look!
Problem for most is that their minds are elsewhere..no focus..no clarity....no clarity..no clue
Why Is The Obvious Not So Obvious?
- Thread starter nysestocks
- Start date
It really is not that hard..all one need do is look!
Problem for most is that their minds are elsewhere..no focus..no clarity....no clarity..no clue
Be very careful with any "stuff" that is readily available on the internet. If you start increasing your size just because you are now winning..then you might just lose a good bit back very fast.
Every trade is best taken on its own merits..you should only increase your size if everything is lining up..as this means the chances of you being right this time are much better than times when everything is not lining up.
Always be looking for ways to reduce your risk per trade..and depending what market you choose..there are ways that give you this "edge"!
It is very hard to catch the exact bottom or top..but there is no need..in fact..most times it is far less riskier to wait!
I doubt if many here can effectively daytrade the ES.. especially is using "standard" TA.
Most who try would do much better to do only 1 to 3 trades per day..and on some days do no trades at all!
If you get "sucked" in.. you will get "blown" out
Who here has thought about the difference between what a bar shows, and what a candle shows?
- Bar has a natural flow of left-right as the open is left, close on right. Candle removes that, although you can 'realize' the left to right if you think about it.
- Bars are thinner, they don't show a 'volume' of space like a candle does.
- Coloring is the same otherwise.
- Bodies might obscure (or not), some price movements(mainly choppy), look different as a series of 'blocks' might be focused on while ignoring wicks.
Yes!
After looking at it for a couple of days, I put it in the "too hard to do" pile for now. Here is why:
1. I actually was going to day trade options when I started back in 2013 because I thought the large swings on near expiration options were a good place to double my money every trade. But after observing for a few weeks I gave up because it was too complex a problem for me to calculate the probabilities in real time. Things has not changed, still too difficult for me even by reading charts.
2. Lets run some #: With AAPL, within a 50 day period, there are 8 expiration dates, each date has ~40-50 different call strikes, so using round numbers, there are ~800 different call/put strikes/dates I can trade. If I were to trade spreads to reduce risks, there are 600,000 combinations.
3. To simplify, I can limit myself to just ATM and short duration, 1 day or 8 day expiration, and there are 4 options I can trade. Each has 5 dependent parameters affecting the option prices (using BSM without the fancy corrections for fat tail), three are dominant: time decay, IV and underlying. Time decay I can calculate so not a factor but I still have IV and underlying to worry about.
4. I pick the 8 day expiration and ATM call (the lowest bid/ask slippage): This morning the $143 ATM strike opened ~$1.71 bid and $1.76 ask, changes instantly whenever the underlying moved. the bid/ask slippage is therefore ~ 3% (in trading the underlying, a $0.01 bid/ask for AAPL is 0.007%). The stock moves about 1% a day so the swings in call price could be ~ $0.70 today. The price is correlated to underlying but not entirely, as the IV changes in real time too.
5. I made a few trial run but it was just like a random coin flip with the house taking a 3% cut each time I flipped the coin (to day trade I need to buy ask and sell bid to get quick fill). My conclusion is that I am not smart enough to play this game.
Any comment is appreciated.
I've tried, but to me, candlesticks seems better. I find that bar charts are harder to 'read'.
After looking at it for a couple of days, I put it in the "too hard to do" pile for now. Here is why:
1. I actually was going to day trade options when I started back in 2013 because I thought the large swings on near expiration options were a good place to double my money every trade. But after observing for a few weeks I gave up because it was too complex a problem for me to calculate the probabilities in real time. Things has not changed, still too difficult for me even by reading charts.
2. Lets run some #: With AAPL, within a 50 day period, there are 8 expiration dates, each date has ~40-50 different call strikes, so using round numbers, there are ~800 different call/put strikes/dates I can trade. If I were to trade spreads to reduce risks, there are 600,000 combinations.
3. To simplify, I can limit myself to just ATM and short duration, 1 day or 8 day expiration, and there are 4 options I can trade. Each has 5 dependent parameters affecting the option prices (using BSM without the fancy corrections for fat tail), three are dominant: time decay, IV and underlying. Time decay I can calculate so not a factor but I still have IV and underlying to worry about.
4. I pick the 8 day expiration and ATM call (the lowest bid/ask slippage): This morning the $143 ATM strike opened ~$1.71 bid and $1.76 ask, changes instantly whenever the underlying moved. the bid/ask slippage is therefore ~ 3% (in trading the underlying, a $0.01 bid/ask for AAPL is 0.007%). The stock moves about 1% a day so the swings in call price could be ~ $0.70 today. The price is correlated to underlying but not entirely, as the IV changes in real time too.
5. I made a few trial run but it was just like a random coin flip with the house taking a 3% cut each time I flipped the coin (to day trade I need to buy ask and sell bid to get quick fill). My conclusion is that I am not smart enough to play this game.
Any comment is appreciated.
The charts do not lie!
Of course the spread will be wider near the open..but quickly comes in..the main point you are missing is that you can make money trading ATM options for AAPL.. providing you can effectively daytrade AAPL stock using charts..the usual option criteria can be ignored for short term daytrading..but unless you can read the charts effectively then you really are at nothing.
Chart reading skills are not as important for overnight/duration option trades..but it really can make a big difference to any type of trading if you can improve on your timing of entries and exits!
Risk control is the easy peasy bit..even a child can understand that.. especially if the reward is a big bag of sweets
It all depends on what you are looking for!
Candles are v.g to spot DT's and DB's on the ES and NQ..and over time bars become as easy..but not at first compared to candles..so in this instance you are right!
Candles are also easier to spot engulfments.
Candles are easier to identify spikes on the lower timeframes at certain zoom level.
So..it all depends on what the trader is looking for..and why the trader is looking for same!!!
OK, I will keep working on reading the AAPL chart.
Your points are very valid. When I first joint ET and asked for help, someone here coached me to lengthen my time of expiry and it worked better, just like you said, easier when one trades duration. It takes real skill to day trade and day trade options and I have lots to learn.
Regards,