TJ Give me your blog url again please? Your url got lost somewhere in my desk top papers and I´ve cleaned it up over the weekend and probably threw the note away.
Michael That's a good question as I hadn´t thought of it in that viewpoint. Since my plan was to start with $5000 and kind of feel my way along and keep adding in $5000 increments assuming I am winning, then would probably go up to $100,000. Whether that would happen in one or two years I don´t know. It would all depend on the account balance improvement. Say add every 50% gain or something. Nobody is telling how they are doing, which I find disconcerting, so assume they are losing? It´s alright to be braggadocious on here and other forums with technical advice. The bottom line is how are you doing with your account balance? My little weekend puzzle on how to decide to trade, highlights that. My impression is that the professionals on here with lots of jargon, expertise and references to millions of dollars they are managing, or trading in other peoples money, are more likely losing money. I notice ROSS I think his name is on the web who has been trading for more than 40 years that I know about, admits in his returns that in many years he hardly makes 3%. At least he is honest, but heck the guy is sharp and knows stuff backwards, forwards and sideways. So expertise is not the answer. Ross writes books, I read some of them decades ago. Still use one of his tricks. He also sells advice, but apparently cannot follow it himself. There are hundreds like that. My rather simplistic amateurish outsider observations feel they are simply gamblng, having fun, and trading is an addiction. My studies show that if you can only trade reasonably sure thing setups, few and far between, even say 2 to 6 times a year, you will make a whole lot more money. Whether I can do that myself is another story, as I´m in it for the fun and challenge. My wife is quite right to keep me low budget for now. Overtrading is the bane of many professionals. That word bane sounds good, don´t know what it means? The thing is the bottom line. I believe you should do between 60% and 200% a year trading options. Apparently the Market Wizards cannot do that. Yet they know a lot and very expert. So what is the problem? TJ says it is quantifying RISK. I think it is avoiding any trade that is not a sure thing, or very high in probabilities of winning. It´s no fun trading like that though. Who would trade 3 trades a year deliberately? Weeeeell! I have a friend who does that and made 84% last year. Meaning he built his vacation house here in the Belize Alps with his money. I'm deliberating that problem myself right now. How and what will I trade? What is my goal? Well my goal is about $120,000 a year, but I'm obviously not going to make that with $5000. I´m still puzzling, if anybody has an answer I'd like to hear it. In the meantime, I think I´m going to research some commodities that go up and down 20% each year. Not to trade commodities but to do LEAP options maybe?
Falconview: I am having a quick visit on this thread. Stanford gave the link. Will read your posts to see if you have other questions. TJ
FV: that was the top of the day. It now at 1.3880 (traded earlier at 1.3860). Stanford: something related to the discussion we had on underlying. Models gave me the signal, but I did not take it. A lost opportunity. This another type of psychology issues. A more serious error would have been to over leverage, and if signal fails even partially, there was be a loss. Conclusion: 1. when you put psychology and leverage in the equation, you can lose even if the forecast is right. 2. To make it big in speculation, it is necessary to use put risk capital and not to expect anything, and have patience in being selective, in not missing, and in waiting for the full development of the trade. If things are random then one reduces the probs by1/2 on eahc of the steps which if you multiplied reduce the overall prob to 1/2^4 (=1/16). The worse part is the leverage mistake, because it can set one many times back. If you lose X, you need 1/(1-x), and note that (1(1-x))= 1+X+X^2+.... .Note that in the series there only + signs and it goes to infinity, and rises with X. So not only the market is difficult in itself, but the traps around are even worse.
TJ I dont have anything new to the forecast. Still a bull trend. I´m not trading. The moves in the OEX are too small. Just waiting.
FV: Did you consider asking the readers what they think are your strengths as a trader as perceived by them? Thank for your comments on the EUR/USD. A no forecast is a forecast. That is the way I think it should be for the majority of the time.
Falconview, I hope you allow me to be blunt in my opinion, but take it for what it is worth from someone with very little knowledge on options at all. first, good to have high goals, but 60-200%, I think you are nuts if you think you will do that consistently. second, you kind of worried me with a couple of those trades when you couldn't figure out if it was a loss or gain third, love the $5000 idea, hate the $100,000 idea for now until you prove yourself for quite a long time with the $5000 account. why dont you just zero out the TOS account and start again with your new strategy and see how you do. fourth. Man, I would love only three trades a year if I could do 84% Lets you and I make sure in the TOS practice account before risking any real cash. Michael
As of today,and until new information that would change my view, I believe that put credit spreads are now a relatively dangerous bet. It does not mean they will lose if done now, but as Falconview says, better told me, stay away from marginal trades. Time spreads with lower strikes might be better in my opinion if I were to want sometime value. I would not be surprised if some bears were to come out from their hiding if there is a start of a pull back to hammer the unsuspecting people. Stanford: what do your signal guys say?
TJ, they say a continued but weakened up trend for the next 1 to 2 weeks, then a correction. Still suggesting to try getting Oct bull puts, but dont have the Nov suggestions yet. Thanks for the bull put warning, will look very carefully before any Nov positions