you said "doing some strangles or straddles on the Qs" and when somebody asked buying or selling, you say, i prefer buying. and you don´t need any advanced analysis or something. how does this advice differ from somebody saying, wanna make 15% a year, buy some msft (or pork bellies or ...) my goofy ass suggestion would be.. there are a million ways to trade. and dozens of instruments. 15% is above the normal return, so you need to add some value, that is, do some business. > do something where your particular strengths come as an advantage. als jack hershey´s suggestion in first page is kinda hilarious. edit. 4e, what cracked me up most about your suggestions, was that you said "i prefer buying" (instead of just buy or sell) implying both can be equally good LOLOL
Let me put it this way. I do not ever sell options, therefore I am not in a position to say that it would work the same way as buying. Therefore, I prefer buying Now as far as analysis goes I am a technical trader. But you don't have to be a super technician to make it work for you. I have been doing it for years and up until about 5 weeks ago I had a Q's trade going which was detailed here on ET from the day I bought until the day I sold. The thing I like about the Q's is that there is so much volume that whether you are trading 10K or 1 Mil you can get in the trade without much trouble. One other thing that was mentioned is that it is a lot easier to make 15% on 100K than it is for a hedge fund. I was assuming that the guy that started this journal had less than hedge fund money. So, now what would your suggestion be?
i congratulate you with your success, i truly do. and i agree it´s easier make 15% with 100k than it is for a hedgefund. my suggestion stays the same. an addition would be that i don´t think it would be that much easier to do with buying stranglesstraddles on the q´s than with another strategy (edit, for a newbie i mean, not for you), however it may be a good one.
I understand. I just mentioned it as way that he might would like to investigate. In no way would I intend for someone to just jump in without at least doing some studies on it. I just found straddles and strangles to be a fairly easy concept to pick up. To be a little more specific. I like to catch bigger moves with the Q's. What I do is put bollinger bands on a 1 year/daily chart. When the BB's start getting tight that is when I enter the trade. When the bollinger bands are getting tight lets you know that a good move is coming. The problem is bollinger bands do not tell you which way it will move so a market neutral strategy will be helpful and keeps a trader from having to guess. I like to be as market neutral as possible for safety.
I will be honest. 15% a year is not a very ambitious goal for an individual. If you want 19%, then all you have to do is follow Dan Weiners "Hot Hands" strategy with Vanguard mutual funds. http://www.adviseronline.com/ Actually, Dan's strategy is so good that many institutions and hedge funds employ it as well with Vanguards funds. You can kick back on the beach while you watch the Vanguard funds work their magic. If your investing your own cash, then you should shoot for a much higher goal. Hedge funds/mutual funds work with a boatload of cash and so their returns are often modest. However, you the individual are not working with the Exxon Valdez filled with cash. Instead, your in a swift boat. Hopefully, you can do better. . .
Day traders here know what I mean. You get the feeling all the time you can consistently make money investing (staying in a position for more than a few seconds in your favourite stocks when the opportunity is there, which is almost every day, and keeping that position for as long as it takes, i mean a week. Unfortunatelly, I cant do that, but all up to 10million (200xom, 200jpm,200c,200pfe,200vz,200hd...) I am pretty sure i 'll make at least 25% a year, maybe not 1% a week like I said earlier, but 25% a year, YES. And sometimes I'll make 3-4 % a week on one stock, it will happen, but I could lose on another, but not as much, as I will buy lows and sell highs, keeping in mind rationals, like I wouldnt dare shorting XOM at the moment although its all time high and all.
Since you're comfortable buying stocks and want rather modest returns with relatively low risk (managing a drop in the underlying is the risk in this case) then sell covered calls. EDIT: Not sure how familiar the OP is with this strategy, but, there is a ton of information on this site as well as others regarding this so I'm not going to repeat it.
I thought about the hilarity trade4success had recently. Some things seem possible others do not. Does 60 trades of four days each where the net per trade is 3/4 of a percent seem possible? What about 30 trades of 8 days each where the net per trade is 1.5% percent seem possible? Does 15 trades of 16 days each where the net per trade is 3 percent seem possible? What about 6 trades of 40 days each where the net per trade is 8% percent seem possible? What about two 6 month trades where the net per trade is 27%. Does this seem possible. What about buying and holding Vanguard for 10 years? That one turned out to be an average ROI of 65% per annum. Personally I've never made 60% a year. I trade a cycle that lasts 4 to 8 days and makes 50% of the channel width. My minumum channel width is 20% and I like to see the cycle repeat at least 5 times every six months. Look at a group of stocks with channels as wide as the % posted above. Look at a group of stocks that have channels twice as wide as the net. 3/4 of a percent wide or 1 1/2 percent wide for the ones that would be traded 60 times in a year. 60 entries and 60 exits where the target is 3/4 of a percent per turn. Compounded here is the math: 60 times 1% is 82% a year. 30 times 2 is 81% a year. 15 times 4% is 80% a year. 6 times 10% is 77% a year. 2 times 30% is 69% a year 10 years of buy and just hold for 10 years for Vanguard was 65% a year ROI. In the words of Lewis Black, lets try real hard for 15% a year. Can you find stocks in channels so narrow you can't make 60% a year?? Anyone can start with almost nothing and learn to make money. The pool of money to extract fromis absolutely huge. Room for everyone that makes the choice to get rich. Try this. I mean do not actually do it, just watch it happen. See how many days you can go before you decide to not watch anymore having made the trade4success laugh. Get a list of 80/80* stocks. cull it for stocks that have 20% channels. Set your STOCH to 5, 2, 3. Mark the daily chart when the fast line goes up through the 50% and check the next day or so and see how long it takes to make 3/4% net for such a stock? This is just a rough and tumble way to be an observer and have some laughs. Quit after you have had enough laughs. *EPS and RS
could you give me a backtest on that please? *stumped* edit, most serious professional traders i know actually make 100% or more per year on small accounts, so it´s not that i have a small vision, it just ain´t as easy as mr hershey seems to believe