Hello, I am posting trades I made using a small account to see how well I can perform, it's easy having access to buying and selling 100 to 500 trades a day but that does not work with smaller accounts. They must obey the PDT rule 2025 and have $25k in their account, what if you don't have $25k, what do you do? You can trade your account through cash or margin and eventually you will get flagged on margin, if not cash account. Daytrading options using a cash-account might make the best sense because Options clear or settle overnight giving you back your buying power. This method is not meant as a way to support yourself if that's your intent, you need capital and time, training plus a mentor that's seen lots. How does the Poor Mans Trading Account work? Simple, he/she buy's their positions and sell them and ends up flat! Holding positions overnight can work if your going for a swing-trade route, otherwise when you sell your going to run in to a Fed Call or Free Riding problem. Here's my small account trade, here's she is! BBY BBY Aug 28, 2015 $35.00 Call Sell to close 47 Limit at $0.63 GTC Filled at ($0.63) 47 / 47 Look at time and sales, they would not fill me at $.64 to $.68 even during a spike up on BBY. My prices for this stock were $.28, +.43, $.44, average it out. It was a $1036 trade on $2060. This method is very dangerous, and you must get out even though you get only a few trades, you must discipline yourself to buy in little by little unless the stock goes nutts! Let's see how this account works, and please post any wisdom you have for trading small accounts because there are many who want to join us but they don't have the capital like we do, so please be nice to everyone! Bust the mindset you must hold a position going against you because that's the quickest way to blow your account up! When you buy your contract or contracts, start slow and scale up, never average down! If you like to average down, please leave this thread and take all that negative Juju with you! Oh, that was harsh, I want people to learn how to do things right, not be losers! Traders with smaller accounts have this weird skill to hold on to contracts that are falling off a cliff, they are so tough, they can handle the pain, those guys, please don't read the thread because we want Traders that scale in once their trade has proven their right, not averaging down and holding their knees praying to Jesus "Lord, if you just get me out of this trade, I will never average down again!". Seen it all, seen too many friends blow up and that's not what this thread is about, its about learning to do things right!
Correction, average cost was $1828+commissions, sell price minus cost equals a gross $1133. I can look commissions up if for a more precise figure. Using small amounts of capital during Wild Market Swings allows you to step in these options.
OP you silly fool! This is how ppl become insanely rich! Those guys who start with $50K can go to hell. Look up Takashi Kotegawa, the man who turned $13K into $158M in 8 years. The Bible said of the Mustard Seed: "Though it is the smallest of all seeds, yet when it grows, it is the largest of garden plants and becomes a tree, so that the birds come and perch in its branches." Replace plant seed with seed capital. I've done some quick calculations. You can take $10K to $20M in one year solely trading stocks. $10K to $20M in three years trading ETFs like NUGT/DUST. That is only assuming you know all the stock market secrets... But if Kotegawa, a homely former convenience store worker can do it, then anyone can do it!
fxwizard, thank you for posting about Takashi Kotegawa, don't you think he's the Rain Man of trading like Karen the Super Trader? Today I really jerked up on my little account because I was too lazy to sell my puts on DG and than I had an appointment so I closed out all my contracts before I left. This is where I hate people, people suck totally because they think we can walk away from our trading command center and socialize between 9am PST to 4Pst, this costed me a lot of money. Fxwizard, lately I've had problems taking my gains off the table because I am going for the longer durataion trade. What advice can you offer someone who got sloppy today and traded to heavy in his little account?
This Kotegawa guy had a period where he admitted himself into a hospital on a wheel chair b/c of his continuous losing streak. I wouldn't take today too seriously. Sh1t happens to everyone, even the Rain Main of trading. I guess the best advice would be to laugh it off and use it as an experience to be a better trader in the near future...
I was chasing stocks that moved each direction on a dime, on each stock there was a $2000 gain and stupid me, I allowed it to reverse! My first trade as the $75 Puts on DG that expire next week, I bought them for $1.00-$1.50, options go to $2.50 x $3.30 and out of 64 contracts I sell 5, than 5 at $2.35 and the rest out of $1.90. Those contracts ended up going to $3.60 while I was at a meeting, no meeting was worth $7000! Arg! I got whipsawed on CVX too, I bought them at 3PM EST at $.75-$.88 and sold 30 at $1.40, sold some at $1.20 and it fell to $.50. I broke even on that stupid trade, instead of being with the zen when I was younger, I use to be able to move before the trend started to move, the Zen I had was wild! The $77 Calls were $.40 and I should have bought the $76.00 or $76.50 when CVX puts finally stopped selling at $75.63. I need to get that rapid fire trading back but I don't like trading that fast, I like watching the grow throughout the day or carrying them on for a few nights. In this Market we have now, carrying certain things overnight is dangerous, it's a risk I don't like taking unless it's all the Big Cap Defense Stocks I posted. My Taco Bell has gone from $75 back to $82, still holding other Defense Plays, keeping things smaller! I don't want to check in to a hospital for stress, just need to roll with the punches, thank you for your advice! Peace!
rabid. There is a unique psychology trading a small account that can not be duplicated at any other time. Kind of a free wheeling, no stress, fluid, high confidence psychology and it is a great thing to do, even if one has much larger accounts elsewhere. I try to carry some of my small account trades over to my larger account at the same time and price points because the smaller account ALWAYS has much better performance. I have no fear buying very beat up stocks and ETFs and in buying far out calls and puts. I am not nearly so conservative with the small account.
So very true, thank you for posting that wisdom in times like this. We all need to keep our composure because that's how we all are going to make big bucks! Thank you Price!
I have a small IRA that I've used for strategy "testing" for a long time. I guess that's a way of saying I don't want to keep score in my primary account. Nevertheless, I'm usually just forward testing rules and adjustments that I'm thinking about bringing to the main account. The Butterfly trade below is something that was developed in my small IRA as an income strategy with a low $ risk. For anyone who's interested in trading SPY Butterflies, this post goes into some detail on trading them with a small account: http://www.thetatrend.com/how-to-trade-a-butterfly-in-a-small-or-very-small-account/
One option (no pun intended) is to open an account to trade options on futures. Specifically the E-mini S&P 500 options (symbol ES). Trading the YM and NG is also possible although they're not as liquid as the ES. The ES is very liquid, has Weeklys as well as monthlys, has lower margin requirements (margin based on the CME's SPAN system), is NOT subject to the PDT rules, and trades 23+ hours a day. Most brokers require a higher deposit for the E-minis than they do for equities (e.g. $5000 vice $2000) but that shouldn't present to a problem to most people. Best