I've decided to jump in and start trading options. I'm starting with a small account- I'm not going to trade anything I can't afford to lose at this point. My plan is to trade options on exchange traded funds (ETFs) like the QQQQ and SPY. I'm mostly going to use tech analysis, specifically the RSI & Williams % R to time my entry. Comments welcomed! Thanks for reading.
Next time I'll try and post my trade soon after placing it- I didn't realize there'd be such a long lag, maybe because it was my first ever post on Elite Trader.
What is your plan to make money? (stating which index to trade is not a plan). Do you buy or sell net premimum? From what I understand you are a buyer of premium. What is your edge?
I'll be buying options- no interest in the selling of stock options. My plan: buy calls when the ETF is oversold or buys puts when the ETF is overbought, this will be based on my system of RSI and Williams % R analysis, this will be my "edge". Goal: make 10% return per month. So lets see how far I can go with my 3K account. I'm a complete newbie, I've been researching for a few months. I have no formal education in finance/stock trading. Am I naive to think I can make 10% a month consistently?
One guy a month ago started a thread just you did about options with small account. He blew up the next day.
Looks like you are going to immediately loose money tomorrow, since QQQQ is trading up over 1.5% in after hours. This is due to the positive earnings report by GOOG. Obviously, since you are a beginning trader, you did not take this into account. Part of becoming a successful trader is not what you do, it's what you don't do. If I were you, and my models said "short" one day ahead of GOOG earnings, i probably would have held off a day or two to see how the market responded. You live you learn, and learning to trade is very expensive. Unfortunately, there is no way around this.