Thank you for the reply. Make sense to me. Personally, I stopped using stops even for underlying. Several times I was stopped out and the prices then reversed and went back up, never touched my stop prices again. So now I only do mental/paper stop and when the target is reached execute a sell order. It does mean I have to watch them carefully and constantly.
When carrying a trade of options for max 2 days, you cannot have any control overnight risk beyond your target risk per trade, can you? Even much worse for possibly larger/unexpected risk, when trading equities! Just 2 cents!
Whoa! My partner and I just discussed about the traders' nightmare - gap up or down against positions held overnight! I agree completely with you! The stop loss applies only to the first trading day when position is initiated. Thank you for that comment, please keep a tab on this thread.
I closed GLD position for $360.00 (Commissions included). I hate scalping, but I cannot pass up trading opportunities that show up during trading hours. Day trading is not my thing because I am experimenting my trading rules for capital growth, so please disregard any position posted on this thread that generates less than 50% . Next...
I admire your courage to put your trades out there for public scrutiny. However, I am blown away by your risk on each trade. Your "risk of ruin" is as close to 100% as it is possible to get. Professionals that I respect say 20% of your account at risk in options at any one time is the absolute maximum. Holding 70% of your account in GLD options overnight is like cuddling up to Mama Grizzlies cubs. In this case you sold quickly but your intent was to stay in up to a couple of days. I urge you to reconsider your quest because this account has no chance to survive. (Even if you are the best trader on the planet)
Now I think I seem to understand a bit more about your experiment. Are you saying your target profit per trade (and hence ideally every trade placed) is 50% gain and also growth based on the updated account value? Not 50% on the initial capital that started this experiment, nor 50% on the bought options investment value per trade! That's very exciting indeed! Look forward to seeing your trades! Good luck!
Thanks! I appreciate your comment! This is an important experiment to me. Hell will freeze over ten times before I could lose the capital outlay. I understand your premise, though.
Even if the current price is $10.00, I am not bothered by it. I will not hold any option trade for more than 2 trading days until the account hits $50K. At that point I will go for volatile stocks. Will focus on stocks with price range $20 - $45 for growing the initial capital outlay, so I may not post trades on a weekly basis. However, I will update this thread with more of GDX trades which may be once or twice a week.