Hi OptionCoach, I was looking forward to your coaching, I believe many of us on the board were too.... hope you don't let one bad apple ruin chances for others. I am a newbie and really could use the coaching and mentoring from a success trader, hope you decide to continue.
Well we can substitute you for the mentee in place of all the others who will lurk here as well. First question, what is your level of understandinf of options and greeks. Be honest, no one will flame you on what you do not know, only if you claim to know that which you do not.
I know Greeks from what I read on investorpedia, but never applied them. Just a background of my trading history and myself. I've got a math degree from a top school, so the math part is not hard for me to understand, I absorb the info fairly quickly, applying them is yet to be seen. My trading experience, really none to speak of, other than lost my shirt during the dotcom era, I didn't really know about trading, just played the market like it was the casino. All together, I probably have only traded options a total of 10 times in 2006, simply buying calls with just one ethanol stock back in 2006, saw the momentum, purchased calls (without hedging, didn't even know about the concept!), I managed to see the end of the momentum and got out with a net profit of $45K. Even though I made money from the trades, I knew I was just plain lucky, options is very dangerous and I needed to know much much more to have a consistently success rate. I am now older and wiser and know better. My goal now for trading option is I want to generate a consistent monthly income with a 10% return per month (whereas before, I was looking for that one big trade that is going to make me a millionaire). I know successful traders are making it happen and I want to learn. So the strategy I would like to learn is that consistent monthly income to yield 10% return per month. Questions: 1. How much capital do I need for me to make $2,000 per month? 2. What strategy is the best for generating monthly income? 3. What would be the max risk to take on for a 10% return? Thank you very much for your willingness to mentor.
Just for starters the 3 questions you ask indicate your mindset is a light years ahead of your current trading ability. Think about that for a moment while the resident ET'ers flame your profit targets . In all seriousness, making up specific numbers of how much money you want to make and want to know the exact strategies in how to get there is like walking into a Golf Pro shop and asking things like I want to make $50,000 a year on the Golf Tour, What are the best clubs to hit to win many tournaments, and which are the best shots to always hit to ensure I make par or less each time. Mentoring is not about handing you a packaged deal to make 10% a month consistently (you need to realize how ridiculous that desire is) or simply saying use this strategy to hit your goals easily. Think about the questions you asked because the right mindset and realistic expectations are a major first step. Profit-first focus and unrealistic dreams of riches from the start is what will lead to numerous mistakes. Please think about what I said here before you think I have said nothing helpful.
There is an old saying, "To have a million dollar account is easy. You start with two million." As mentioned in the above posts, you must first learn how to protect your account, and only then do you start looking at profits. After a year of trading, if you are at breakeven, you can then start looking at yields. This is not an ATM machine, it is a craft, and you have to learn and practice it.
Clear the decks... Optioncoach in mentoring mode... This thread is bookmarked... Free advice to the neophyte options trader: Read optioncoach's 2200 page thread "SPX Credit Spread Trader" posted here on EliteTrader. A large amount of useful practical knowledge is to be found there...it will take a LONG time to read it all... Now back to our sponsor...