I've been back to Corporate America as I've said earlier. Today I got my first paycheck. Ka-ching. Great work env. Good job. etc. Ironically because of my work schedule, it's forcing me to be a swing trader of sorts. I was scared at first but it's actually working out great. Especially with options. I think, at least for me, with options it allows one to not be super precise at timing. I realized my chart reading is pretty decent. But my timing is slightly off. But with options I'm OK with sitting through the noise a bit. Most recently, I bought a gold options. It went up initially but from my chart pattern I knew it's not a complete move. Then it crashed the last few days(as you guys know). I bought more. Normally I would NEVER do that with futures. I would get out at a loss. Futures move too violently! I learned my lesson and never average down for futures. I added several times my original order on the gold options. And I waited for my chart pattern to unfold. Then last night I saw gold futures were going up. This morning I unloaded most of it. I still have some. Not sure if this is a real break out or will reverse into the range. Funny thing is I made more today then my first biweekly paycheck. hehe. I still got a ways to go. I don't get excited or anything because of mental accounting. I still feel I'm down so much. Until I recover all of that I don't feel too excited. But it's good progress. Thanks for all the support from ETers!
Good for you!! Options is a good choice when you can't daytrade. It does offer you a bit of flexibility in terms of pricing. Congratulations on your profit!! When the trading is going well, its profit is always bigger than the regular corporate checks but you need the corporate checks to take the emotions out of trading. I am sure you will make up the losses in no time.
Yes, options is working out great. You always hear people saying most people lose money buying options. So far, my track record has been vastly positive with options according to Fundseeder trade analytics. This is changing my mind about what sorts of instruments I should be trading. I wasted a number of years with futures with very mixed results(mostly net negative with occasional large gains and large losses). The one thing I need to get a better handle is exiting. This morning I exited too soon! Had I held on til the end of the day I would be up 2x my gains! But this is NOT hindsight talking here! What I meant is my entry signal was daily chart. Then why the hell did I exit using a intraday signal???? I saw I was up huge this morning then I started exiting furiously. I should wait at least til end of day or mid day to exit. I was afraid of the reversal might happen when I'm at work and not staring at the screen. That's bad daytrading habits!!! I have IB on my phone and I can just go to the bathroom and exit the position near end of trading day. Didn't think through this morning. I'm not saying a reversal could not have had happened. But if I'm basing my entry signal on the daily chart then I should base my exit on the daily chart. Luckily in my other account I held on. But that account had lower exposure. The account I got up had 62 lots! So those who swing trade options, futures, equities, what do you do on a hugely positive open? Do you usually hold and see how it goes and ride it? Or do you exit shortly after? Just need to adjust this. This is not a small difference. The net difference would have been 2x what I made this morning. You wrote, "When the trading is going well, its profit is always bigger than the regular corporate checks but you need the corporate checks to take the emotions out of trading. I am sure you will make up the losses in no time." True. In my corporate day, I'm a totally different person. A company man. Never talk about market. Just blend into Corporate America. Be a good employee. I hold back my emotions of how much I made or lost. It's the stability of the corporate job that allows me to made big profits. Had I exited end of day instead of early morning, I would make more than my month's salary gross(before taxes!). I will keep building back my account and refining my trading skills while holding down a steady corporate job. I'm willing to live this double life for as long as it take for me to reach my goals... It's strange that swing trading options actually ended up being wildly profitable when all these years I tried and failed(to be honest) with daytrading futures. But the only good thing about daytrading was that I learned to recognize tons of patterns that scale invariant(fractal nature of markets). There's no way a swing or position trader can see as many chart patterns as a daytrader! In less than one year, a daytrader can see a decade's worth of market patterns! That's the only thing I got out of daytrading. Everything happens for a reason... Thanks @JSOP , @Overnight and others on ET!
Need to be careful about self praise, how long you been trading? If your chart reading was decent you may be aware that you bought and sold at the gold bottom. Ok, I'm no expert either but my call is gold is just starting a run. You are selling at support. https://www.barchart.com/stocks/quo...0&sym=GCY00&grid=1&height=500&studyheight=100 However give you this, gold is trickey to trade.
Nobody ever gets better at exiting. You either exit too soon for which you will be kicking yourself for missing all of the potential profit or exiting too late for which you will be kicking yourself again for not booking the profit when it was huge or worse when it was still a profit. Out of the two evils, exiting too early is the lesser of the 2 evils. Because you simply won't know where would the true top or true bottom be so if you wait too long, your profit might shrink or worse might turn into a loss. It's only very rare that you were able to exit at very close to the top or the bottom and that's just the reality of it. Don't beat yourself up about it too much. As to why you chose to exit at intraday instead of waiting until the EOD to exit, the reason is simple: you don't want to miss out on the profit that's already here. You won't know how long the profit is going to last; it might not be there at EOD so better book it while it's still here. One bird at hand is better than two birds in the forest. Don't worry, we all do it, we all go through the same train of thoughts in our head when we rush to book that profit before we might lose it and then only end up kicking ourselves for missing all the profit that happened afterwards. It's ok at least you booked the profit and landed on the +ve. If you really want to train yourself to book profits at the same TF as your entry signal, you just have to force yourself to accept that at the TF that you want to exit the trade, the profit might not be there and worse, it might've turned into a loss; larger profit could also mean larger losses; the longer you wait the more uncertainty you would face, that's the nature of the beast. As long as you recognize it and are willing to accept that, then next time you would be more willing to wait until EOD to exit the trade. Happy trading!
Thanks for reframing the psychology behind my exit. You are right. It's fear of losing the bird in the hand. But to add another layer of depth to this, I just realized in my daily TF is one bar/candle. Drilling down, I have noticed that there are clues intraday. For example, with a continuation pattern intraday, one would feel safe to keep it. Or if it shows immediate sign of a reversal then get out. Yesterday it didn't show signs of a reversal. I just like to ring the register. hehe. This has happened several times in the past for almost the exact continuation pattern. But I have also been burned when I held on too long and it reversed on it. So hard to say. Maybe I should just put a trailing stop and go to work. And let it trail all day long.
I agreed. I have 2 accounts for this. One short term which I do relatively high turnover on that account. In my nontaxable account, I have been holding gold since Aug! Right near the bottom. I feel like there's a lot more room to go. But that is more of a position trade than a swing trade. It only finally broke out from that range in Aug/Sept. So been holding for a while. It can still go more. It's a been frustrating to see huge up swing then down swing then up swing again. I guess that's position trading if you want to capture long term trend. I'm willing to hold for a while. But sometimes I feel like I should get out at local tops and get back in at local bottoms. But I'm afraid I will miss the big move when it does come. So I'm just holding.
Yes technical analysis helps but they are not 100% guaranteed. The price basically do whatever it wants. If it doesn't want to reach a price level, it just simply doesn't want to, if it wants to breakout and continue further, it will continue further. Some people use a fixed percentage or ratio to exit when the exiting price would give the reward that's certain ratio of risk but that would result into the same problem, forgoing all the potential profit and yet not book profit when it's there. Trailing stops would definitely help but only when the price is gradually trending down or up in stepwise fashion. but if it yoyos in between and then continue back down/up then you would still all the profits when it continues back down/up. There is not one best method for exiting trades I find. Each one of them has its own advantages and pitfalls. All one can do is just adopt the one that suits one's trading style, risk/reward tolerance/expectation and cost of trades the best.
Welcome to the club. I switched from day trading to swing trading back in 2010 and then to options in 2013 and never look back. My only caution to you: both your wins and losses are amplified if you, like me, are trading simple options so drawdowns can be scary, and if I were you I read up on Kelly Criterion. Good luck to you.
I think the reason why my swing trading and options trading are so much more profitable is because I'm very selective and patient about it. With daytrading futures, it's too easy to be trigger happy. In and out. For swing trading, I wait for just the very very good setups. I'm very patient. Then and only then I go in. It's a very well thought out and methodical approach. With daytrading, I feel like I'm trading with my emotions and sloppy and careless at times. Then lastly, with swing trading I get better R:R multiples. Because when the move happe, it's much bigger range since we are talking about daily chart vs minute chart. With daytrading, typical profits are few hundred dollars or less. With swing trading, we are talking multiple thousands or more easily over days/weeks.