From rags to riches, 700$ to 100k in 2013

Discussion in 'Options' started by dfantome, Jan 9, 2013.

  1. mm2mm

    mm2mm

    This x1000
     
    #31     Jan 11, 2013
  2. Quote from Put_Master:


    <<< But again, I have to remind you % returns on very short trades are 100% meaningless, in terms of how the value of your portfolio will actually turn out at year end.
    If you did 50 - 100 very S-T trades through out the year, with each earning 50%, you'll end the year earning A LOT LESS than 50%.
    Those very S-T % returns are 100% meaningless.
    The shorter the trade the more meaningless the % return. >>>


    This is a response to justtrading, who placed a "?" after I stated the above.
    Remember, my discussion was about very short term trading.

    Thus, just to make the point, I'll use an extreme example of someone who does a one day trade "every other day", with each trade earning 50%,.... that person will NOT end the year earning a 50% return on his account value.
    At best he will earn 25% at year end.
    Do a 50% day trade every 2 days, and you will lower your year end results even more.

    On the other hand, an investor who trades monthly, earning 50% on each trade, with the same one day gap between trades as the day trader above, will actually end the year earning extremely close to 50%.... minus commissions.

    The reason is obvious. With very S-T trades, there are too many gap days of no trading.
    The more gap days during the year, the less likely your year end results will match your consistent daily 50% trades.

    Do just one annualized LEAPS trade during the year, which earns 50%, assuming you use all your cash,... and your year end result will then match the same 50% return at year end.
    No trading gaps.
     
    #32     Jan 11, 2013
  3. doable. $700 is a big number. not a small number. from option trading point of view.

    you need outline your plan. each steps(target, stratigies,ideas,problems to deal with). very detailed, concrete, feasible executions .

    otherwise, it is a dream.
     
    #33     Jan 11, 2013


  4. 700 what?
    Dollars?
    Have you done the math?
     
    #34     Jan 11, 2013
  5. 377OHMS

    377OHMS

    Welcome dfantome.

    Good luck. I hope you make money.

    Don't get too fixated on a dollar amount goal though. Just try to be profitable and manage your risk.
     
    #35     Jan 11, 2013


  6. To achieve this you would have to be God and even if you were...you probably Still wouldn't achieve this because the market is imperfect.
     
    #36     Jan 11, 2013
  7. Destined for failure. At the same time $700 is really nothing to lose.

     
    #37     Jan 11, 2013
  8. Bry

    Bry

    "If you shoot for the moon you will get at least to the top of the trees."

    $700 to $1400 to $2800 to $5600 to $11, 200 to $22, 400...like Surfer said, if you could do well your first 5 trades then you can take smaller risks to not blow up you account.

    It is easy to make 100% in one or two days buying the correct weeklys, but it is also easy to lose 100%.

    You will need some luck. Good luck!
     
    #38     Jan 12, 2013
  9. The difficulty I'm having is that you seem to be confusing an annualised rate of return with absolute return.

    When you say a trade earns 50%, that gives the impression it is an absolute return. Even with no compounding, an absolute return of 50% per trade will give you several thousand percent per year, assuming few to no losing trades in your example.

    Yes, if you make 0.20% per trade, do 1 trade per day, and assuming you annualise on the basis of 250 trading days per year then that is 50% per annum. Since you are annualising your return for each individual trade, not trading daily is going to reduce the final percentage realised.

    Earning 50% per trade is way different from earning 50% annualised return per trade.
     
    #39     Jan 12, 2013
  10. When I speak in terms of % return, I am always speaking in terms of annualized % return.
    It's important to be "consistent" when evaluating and/or comparing various trades.
    Otherwise, what may seem like a good trade, may actually not be quite as good as it seems,... or it may actually be better than it seems.
    Important to have a "standard benchmark",.... as it smooths out all the inconsistent variables, like length of contract, cash at risk, dollars earned, R/R.
    And it makes it easier to establish a "minimum benchmark" as well.
    That being, I want all my trades to earn a minimum of 13%.
    If it only earns 12%, then I know i need to wait for a higher credit.

    If by not annualizing, I earn 500% on this or that very short term trade, (which won't fill my car with gas,), and then end the year earning 15%.... what was the relevance of this or that meaningless 500% return trade?
    Who am I hoping to impress with that meaningless 500% return trade???
    Going out. Read you later.
     
    #40     Jan 12, 2013