But if he had good moneymangement he wouldnt have those big gains . But wth the big gains you also get the big drawdowns .
Skilzz, When i made my post above, i was not aware that you were trading options. Stops can be used with options as well, but the context is different and many option traders don't used hard stops the way equity traders do. If you want to trade options study them thoroughly and go slow at first. Options are a specialty and just because one is a good equity or futures trader does not mean they will be a good options trader without learning the ropes. I would recommend Charles Cottle's book to you. It is somewhat advanced, but i consider it to be the bible on options. If you find it too advanced, then you are not ready to risk substantial amounts in options trading. One thing i am certain you have discovered by now is that traders can be assholes. You'll have to decide on your own which posters on ET are worth listening to. Good trading to you.
You guys are right about the stops. If I used stop I would have never seen the big gains. Example, In mid Nov I purchased the GOOG Dec Call at a 710 or 720 strike.. something like that. I purchased the call for 2.00 only to have the option sink %50 to 1.00 the following day. GOOG's underlying price had dropped to 630's, by December 12 the stock had hit a high of 725. Had I used a %50 stop I would have lost the gains on the option before it had a chance to run up over 10.00. I like spreads better than stops. Prob should have used them. You know, the more I look back I should have recognized the broader market decline especially the telling signs by the financials. At least I could have sat on my hands if not short.
That is a round-trip. Sorry it took so long, but many people, including self, go through several round-trips before getting to a consistent upward-trending curve. Like you said, you need to take a step back, and analyze what you should do differently. Strategies that work when the market is trending upward cease to work when it goes into a tailspin. It is important to adjust to the current state of the market. The initial draw-downs should have given you a hint that the market has turned: you probably compunded the problem by over-sizing.
Of course. But then again, you probably would not be down 90% from your equity peak. Risk and reward are intrinsicly tied together. Another idea for you: credit spreads...basically they have automatic "stops" built into them. They are basically premium selling strategies that have a loss "cap" to them. If you are bullish, sell the put spreads, and vise-versa. Poor old Vic Niederhoffer never used these as he liked going "naked"....and once more he got caught and blew-up his fund.
Hmm.... Didn't use stops at the close Thursday? That would have bankrupt you in one trade if you were long and leveraged. Granted, you are an options trader, but you are spewing a retarted method of trading in general. I have been at this for over 20 years now, I have day trading accounts and long term accounts. If I did not use stops, I'd be a bartender!
I went from $90,000 to $500,000 in my IRA, and now its at $15,000. . . . its not the end of the world, just requires the realization that there is a million different ways to make money, and more than one skill to master. there is no one silver bullet for everyone, but there will be a silver bullet for you, and once you learn what that is, and most likely its part of your psychological makeup, overcoming a weakness in beliefs to succeed in a counter intuitive world. I know someone who made $500,000 in one year day trading, and then lost it all BEFORE APRIL 15, AND worse, had no money to pay the IRS taxes due. . . money management is a key, but more importantly, learning to adapt yourself to different situations, trending versus chopping, up versus down, indexes versus stocks versus commodities. there will be times when you absolutely will know what will happen next, and it will happen, and you might feel good, great, confident. . . but it may not happen again for several years. . . As far as ET aholes, i have seen tons of them, its just another slice across the human population, aholes are everywhere. . . but don't grandiose yourself by assuming that your experience is everyone else's experience. just figure out your mistakes, because that is where you need to learn, and either figure out how to avoid it because you can't cahnge yourself, or work to overcome it. . . good luck sportsguy