To Trade or Not to Trade?

Discussion in 'Options' started by chiquita, Feb 26, 2016.

  1. chiquita

    chiquita

    I think you might be right. One thing I noticed is that right after I close the trade it generally goes back to a profitable price. Another possible issue I see is that sometimes I don't close them early enough. I think I need a better rule as to when I should close my winners. I was reading how some people use the ATR for this purpose and it looks reasonable.

    If I do a single contract and it goes to $100 I would usually hold and try to get to a bit more.

    I tried TastyTrade strategies for a few months as well. You can have a high rate of profitable trades, but then there is always the one - trades that eat your profits. Also, the commissions are insane.
     
    #31     Feb 27, 2016
  2. chiquita

    chiquita

    I'm thinking about buying an ETF and sticking with covered calls and similar strategies.
     
    #32     Feb 27, 2016
  3. dealmaker

    dealmaker

    A trader has to develop positive expectancy models that forces them to overcome their Hard-Wired bias towards small profits and large losses...
     
    #33     Feb 27, 2016
    profitlocker likes this.
  4. Cswim63

    Cswim63

    My trading got better when I was able to dump a trade that was in no man's land, knowing that I could get back in after reassessing the market. Sometimes it's OK to beat your stop, taking a smaller loss or scratching. This I believe comes with time. Try to cut your size and risk till the money is barely meaningful. Put time on your side, and continue learning.
     
    #34     Feb 27, 2016
  5. i960

    i960

    1. If the market environment or context is not producing good results and you're certain it's not your methods, stop trading - the market is not conducive to your methodology. Accept it and be patient. Recognize that the current market is in a period of uncertainty in ways and violent moves up and down are to be expected. It's volatile and not always a "good" kind of volatile.
    2. If you don't have any risk parameters or make them up as you go, stop doing that and make a plan.
    3. If you're bailing too early because you're worried about losing money rather than obeying your risk parameters you're hawking your P/L too much and focusing too much on money.
    4. If you're bailing too late because you're getting greedy or fantasizing about all the money you could make on this trade if it only went to xyz you're stepping outside the parameters of the trade and thinking too much about money.
    5. If you're doing stuff like selling OTM options (naked, iron condors, etc) and just hoping, based on "probability", that price won't go near your strike - then you're a slave to gamma and will get screwed eventually. These strategies don't really work IMO, get closer to the money and learn how to hedge with the underlying when necessary. If your size is so large, just to produce a substantial concern, vs your account size, that you couldn't even hedge, then it's only a matter of time until a blow up happens.
    6. Don't screw around with earnings.
    7. Possibly don't even screw around with individual stocks if that's what you're doing, instead trade index options.
    8. If you're making trades because you just want to trade and not because there's any significant setup, stop doing that.
    9. Patience.
     
    #35     Feb 27, 2016
    Chris Mac, ironchef and Cswim63 like this.
  6. Does your your trading plan not have an exit strategy (one that you follow religiously) to limit your losses on those occasions when the market goes against you?

    Also what kind of commissions are you paying? You should be able to get $.70 -$.90 a contract which is not insane. Granted commissions eat into your profits but you shouldn't be paying over a buck per contract.
     
    #36     Feb 27, 2016
  7. VTS

    VTS


    We will agree to disagree then. It didn't take me more than a few months and I have several friends who are also full time traders who were the same. The vast majority of people who actively trade lose money. Of the few people that do well at it, most of them figured it out in less than 2 years.

    There's no shame what so ever in trying and failing, and just because a person isn't a good trader doesn't mean they aren't smart. Some of the smartest people I know are crap traders, it means nothing.

    Being a successful trader isn't rocket science, and most of the people I know who are successful at it including myself have reasonably simple systems that work.


    Perhaps if 2 years hasn't been enough time to be profitable, you are overcomplicating it? If you want input from the community, maybe describe your basic strategies and give a general outline of your trading rules.
     
    #37     Feb 28, 2016
    chiquita and Cswim63 like this.
  8. Redneck

    Redneck

    Perhaps you are being a condescending prick

    Perhaps you're allowing your alligator ego to overload your hummingbird ass

    Perhaps it takes longer that 2 years - to identify / assimilate all the moving parts

    Perhaps it takes longer that 2 yrs - - to experience the mkt various stages / environments / stages

    Perhaps it only took me 18 mo - and could ask you what took you so long (even then.., and looking back - there a hellofalot I still didn't know..., hadn't seen..., nor experienced)

    Perhaps we don't have a web site linked to our profile - selling services (before you blocked yours of course)

    Perhaps a trader would never disrespect another trader - aspiring or otherwise

    Yes..., just perhaps

    RN
     
    #38     Feb 28, 2016
  9. zdreg

    zdreg

    eat Chiquita bananas and enjoy life.

    study the mind psychology of successful traders.
     
    #39     Feb 28, 2016
    chiquita likes this.
  10. zdreg

    zdreg

    lighten up.
    "Perhaps if 2 years hasn't been enough time to be profitable, you are overcomplicating it?" this remark is neither condescending nor insulting. VTS is making a serious point. try to grasp it.
     
    Last edited: Feb 28, 2016
    #40     Feb 28, 2016