I just started day trading option contracts not to long ago. I've read books, watched online podcasts, and YouTube videos on how to read charts and market indicators. I started with a meager $2500 in a cash account. So far over a few weeks I have grown that amount to $7900 averaging about $2000 a week. So my question is this amount of success sustainable? Now I have lost about $700 in the process but they have been great learning opportunities. I'm not trying to get rich quick or ask the "how much do day traders make?" question just a reasonable response to a average joe who does not have hundreds of thousands of dollars in a margin account.
How can anyone know this? Maybe you have stumbled on to something concrete.....or it could be a good run in a suitable environment which could change anytime. Just keep trading. But you should understand longevity is a problem in this business.
Long calls and puts. I don't keep the contracts for more than a few minutes at a time. I've only bought puts a few times because it scares me each time lol.
Cash accounts do not fall under the pattern day trader rules. Only margin accounts. I can buy puts and calls all day long as long as I have the cash. And options contracts settle at the end of the day so I always have my earnings to use the next day, unlike stocks where it takes 3 days.
Nice job, that's a pretty good run. A similar thing happened to me during my first month trading, using long calls & puts for stock directional trades. But I never really understood what I was doing, so I gave it all back over the next 6 months, one little loss at a time. :eek: I'm sure you can sustain it if you know why you take trades and have a known good setup that you are able to follow. It's taken me years but I finally figured out what I did that first month to come out ahead, and now it's been working consistently going on over a year now. But markets change as other traders figure out who is making money and how, so I don't believe anything is a sure thing forever.
Most likely very improbable, although not impossible. You are basicly living the dream, opened a small account and started to make 80% A WEEK, what you can live on.... There are 2 possibilities: 1. You stumbled upon the Holy Grail and you are the next Livermore. (very unlikely) 2. You have the right strategy for the right time with a newbie's fearlessness. (most likely) Enjoy your run, but I wouldn't bet on it continuing forever. Making 80% a month would be an incredibly great achievement and you are doing it per week right now...