So, You say that when it works, it works well. You say you cant tell when it will work (during amateur hour!) You say you get chewed up when you are wrong. If you cant make it work, I'd say your methods are wrong, you are looking to make too much money when overleveraged via a method akin to daytrading which has been statistically proven as a losing game. So, using post trade analysis, do you really think you can tell when it will work when you think it will work? If so, dont ask for help and do that... If you come to the realization that it wont work, find something that will.
day-trading options is not a long-term successful edge. It only works during high volatility periods, be that days or months in duration. a lot of traders in the past (including myself) had success flipping options like you described... but eventually struggled and searched for ways inside of the market to resume success. But the truth is, cost structure of options prohibits short-term flipping success. There is no way to succeed in trading without tight stops and small losses during poor conditions. You made the same mistake others did (including myself) to assume you can simply avoid stretches of sideways price and the -50% to -90% haircuts on option prices then. The reality is, you cannot. Flipping options has no long-term success edge. They are for holding positions where price action covers enough great distance to overcome all costs of trading. Including all of those natural, unavoidable losing trades. At certain times that whole approach works just enough to make you think it has an edge. It does not. Short-term success, long term impossible
Daytrading is in reality "supposed to be a losing game" as you stated. The business person transferring their risk to the exchange do not day trade, their mission is beyond trading. The specs are the traders, the specs trade against each other and not against the person transferring some costs, whole different ball-game. So daytrading is not a losing game at all, it is just like any other profession when a new person enters, there is a learning curve that is complicated by the fact of no paycheck for time punched on a timecard, no benefits at all until and IF a constant/consistent flow of profits show their pretty head. Trying to learn a new profession where one in fact loses money instead of making money is contrary to everything anyone learned in school, even being the toughest alley cat in a tough hood never prepares one for the down and dirty world of money transfer from wallet to wallet. Price action is a means to become a winner, it is a newer term used by many and is kind of cute actually. What it takes to be a winner is a METHOD derived from cerebral torture on the battlefield dodging hot lead aimed at your noggin. Anyone can pick up the simplicity of price action from the classic technical dribble many espouse. Something that looks so easy is a suckers play when money is thrown in the mix, when that money is YOURS it heightens the cerebral intensity many fold. Without extracting a METHOD from the battlefield, the basics are useless. Like I have stated before: A Lieutenant and a General were observing all the soldiers preparing for battle. The LT looks at the General and asks "what are the chances for all those men to come out alive? The General says: Well, it is like this, out of those few thousand men being sent into the battle their probably will be two or three real hero's, the rest are just fucking targets.
Most aspiring traders try this profession because it has the allure of quick results to go with a glamorous appearance. The tv ads and general media ("Wall Street", "Wolf Of Wall Street" and other piece of crap movie fictions) reinforce those false images. But the truth is, it takes anyone with zero exceptions at least, bare minimum, two - three years of steady trading to create consistency in themselves. And that is on the short end of curve... most successful traders take several years if not a full decade to master all the loose ends involved. Yes you need a "system" or method" with defined edge. Success is impossible with one. But even with that in hand, it will take years of time and I do mean years to master yourself and your own daily operations. No one else can do that for you in any way or shape. The most anyone outside of yourself can do is teach you "what" to do. The other parts of learning how to do it and more importantly what NOT to do can only be learned from within by field experiences.
I agree with everything Austin (and others) have said about daytrading options...a losers game. Just from reading some of your responses my guess is you are trying to replicate what daytraders do with stocks by using the "cheaper" option. It is not a cheaper option, there are too many moving parts to options to substitute them for daytrading stocks. Just DONT do it! Over the years I've read a lot of daytrader journals. My two favorites were "Hitman" back in the yahoo days and NoDoji who quit working to pursue trading full time. As others sugest if you do quit working to trade you definitely need a plan, money and family backing to succeed and even with all that you may not, I get the feeling you are trying to talk yourself into quitting your job and taking the leap. If you are young with nothing but money to lose do it...however I also sense a "gambler" in you..the rush you seek from a "win". A serious sit down with yourself is in order, The responses you have received have been really good, print them out and read them over until it starts to sink in. Good Luck!
Study what you said. These are contradictory statements. Yes, you want to focus on the specific action of a stock/contract and trade that price action accordingly. The drill I offered you will help you do this with consistently profitable results if you have decent pattern recognition skills and memory, and if you master the trader's mindset so you can trade the plan you'll eventually develop. Projections and expectations become irrelevant because price will tell you everything you need to know. This will require trust in your plan. Which takes us to: Spot on! And it not only creates a false sense of confidence, this illusion, this false sense of confidence can destroy your capital, sometimes with devastating speed: http://208.234.169.12/vb/showthread.php?postid=3327351 Even with a thoroughly tested positive expectancy plan in hand, how you feel --- your comfort level --- will have a huge impact on your ability to follow your rules. With such a plan in hand, how you feel about any individual trade prior to assuming the risk of placing your capital on the line will be the difference between success and failure. Your success as a trader will depend on your ability to sit with discomfort until the successful outcome of doing so turns into unconditional trust in your system. Eventually you'll become comfortable with the uncertainty that accompanies a random distribution of wins and losses in a positive expectancy trading system, just as a professional athlete involved in a contact sport becomes unafraid to take a hit and immediately move on. You've been asking if there's a way to figure out in advance which of these "pops", as you call them, will become a trend and which will fizzle. Heck, we'd ALL love to know that! Your mistake is in your obsession with identifying an intraday trend in the initial stages. The additional reward you get from picking a top or bottom is erased by the fact that you're effectively gambling and end up a net loser because it's the casino, not the gambler, that wins. The gambler becomes addicted to excitement of random rewards and that's what seems to be happening to you. The way you become the casino instead of the gambler is to become a master of reading price action and developing a plan that places the odds in your favor over any series of N trades. With odds in your favor, you can act as the casino by playing every hand, knowing that you'll lose some and win some, but over time, you'll always be a winner. When you study price action, you'll learn that the middle to end of a trend is where the easy money is made. You'll learn to identify failed breakouts ("pops") and solid breakouts. You'll learn the sorts of price action environments (the bigger picture) are conducive to powerful runs and which are likely to slide all the way back to the other side of what's really nothing more than a wide range. You'll learn that the greatest discomfort lies in entering a powerful trend, and that the market rewards that which is uncomfortable.
I work a full-time job, one in which I work anywhere from 11-14 hrs per day. But I swing trade...holding positions for 2-4 days. It works for me, so much so that I make more in my trading than I do on my job. Maybe swing trading could be your solution. But as DBPhoenix pointed out, developing a plan still is critical because even if you were to swing trade, there are many different ways to do it.