I know it is difficult. Being trying hard for several years now. So, where do I start? Read Sinclair a few more times, or read Colin Bennett, which @sle told me to read, a few more times? Actually I think @luckyfnlou gave me some ideas.
Apology to @trader221 we hijacked your thread. We all have our reasons to trade options, probably all different but all valid. My posts warned newbies that to be successful, we had to bring the right weapons to fight a fair fight. If I trade derivative/volatility, I bring a pocket knife to a gun fight. If I trade position, I bring a revolver. Best to you.
On your rule 3, volatility, do you mind expanding on this? Are you referring to being a buyer of volatility is low and a deeper if it's high? Thanks.
I thought that the perceived wisdom is to sell premium when volatility is sky high and buy when volatility is low? Thanks.
I said I was a directional and not a vol trader. If you trade vol, you want some delta neutral set up, then you take advantage of vol reversal. If you trade directional, your selection criteria is usually not volatility. Professionals love vol trade but it is an approach requiring deep understanding of options and complicated (for us amateurs) to master.
Why not trade directionally and incorporate vol should the opportunity present itself.Direction and Vol are not mutually exclusive,nor does trading vol imply one has to be delta neutral. Unlike man,not all delta's are created equally
Definitely. The ideal directional set up is when vol is very low, underlying hits bottom and you know a reversal is coming. Not kidding, sometimes it happened.
OK thanks, I see where you are coming from. I suppose the only thing is that, with high vol, you are paying more for the premiums? Thanks.