It seems that me inexperience has cost me on my first trade. But I'm in this for the long run. I truly appreciate you guys taking time the read this and giving me some useful feedback!
Let me give an example. If you bought only one contract (a good thing to do for a 3k account), how much do you think you need to make on each option trade to make the 10% monthly return? I have not done the calculations, but I think you would need something in the order of 300% on each option trade, each month on average. Any trade you miss, and you will have to make 700% (twice 300% plus the premium you lost on the month you did not make money). Now tell me what you now think? Do you now believe that you have a plan to make money? If I and others are giving ideas/points you have not thought about, and we have just read your message for a minute, imagine what other things you must be missing and also imagine whom you are up against in this game. Pros smell the money of a newbie miles away. They have been newbies themselves. If you are using 1/30 or 1/20 on each trade, you got at least the money management right. If you can make just 3% consistent a month by buying premium, I think that you should consider youself a future top notch trader, and definitely in the top 5% of the world best.
Could you be frank, and tell us how did you land with that sort of high expectation? If it is your thinking, it is fine. If it is some hype and/or book you read, could you tell us. Having said the above, making big money in options is indeed true but only for a tiny minority. I have read the threads of some of the pros here. Most of the money made is not really in taking big gambles, but in being smart in spreading/hedging/avoiding traps, in addition to being a top trader in traditional sense.
you said u would get short(buy puts) or long(buy calls) when the mrkt was overbought or oversold, that is known as counter trend trading, or picking tops or bottoms,that is a very tough way to make money, you would be better off learning how to draw trendlines and get on a stock that has started to move towards one, then buy puts or calls on that,get out just above or below your targeted trendline,with 3k the commissions alone if all your trades are breakeven will chew u up, so u are better off picking a stock that is moving and get on for the ride and keep your comissions low and if you haven't reached your trendline and u haven't broken the channel that your in against your trade don't take it off just because it's profitable, get out when it starts to go against what u thought it looked like it was going to do,if u keep anything overnight sprd it off to limit your risk, if u were long naked puts tonight in google u would be taking a big hit in the morning,if u were sprd off u would have lost less, newbies jump out every time for a small profits instead of a big one and ride the bigger losers because they think taking losses makes them stupid,not taking losses makes u even more stupid becuase u are now losing more, u will lose money ,just except that and learn how to lose small ,not big, accept profits and learn how to make them big not small
Personally with options. You will lose the entire 3K buying premium. I started trading that way when I was young. Lost it all. Take my advice. Do not buy options unless you have a very specific plan in mind. Buying when it is overbought/oversold will surely cost you your money.