I understand one mans trash is another's treasure in that some strategies will work great for one person but be considered worthless to another. The direction i went the first go around was basically watching all of the optionalpha, tastytrade and OCC videos then thinking i was hot shit about about to be printing money daily so I started shorting options (naked) without any type of hedge in place against my short position (didnt follow instruction so well)...lost thousands quickly on just a few trades. thats when i decided the best way to start my day was about 2 fingers whiskey in each of 6 cups of coffee a day while buying OTM SPY options thinking i was going to WSB YOLO my way into doing blow out of strippers butt holes. After a few weeks of that I stopped day drinking and started buying ATM options on or near expiration thinking that good Gamma would drive me to success...never one time did i make a good trade doing this. At that point i stopped everything and walked away. So basically my first go around was more or less degenerate gambling of a fool. I can handle Theta working against me...being short options scares the shit out of me to be honest.
OK,you have no system,or a systematic way of approaching the business of trading.. It sounds like your orientation is directional trading.. First question,why are you using options?
I like the ability to control a lot of an underlying with less capital...They basically grant me the opportunity to trade “sufficient amounts” of costly stock out of a relatively small account. On top of that they just interest me in general I really enjoy learning about them. thanks for taking me serious by the way.
No problem.I had the good fortune of trading/learning using OPM and have basically made every mistake known to man. Your first order of business is to cone up with some systematic method of trading directionally. At this point you do not know if you are a decent stock picker.You are putting the horse before the cart. Have you ever run a simulation on your trading strategy?
I don’t think I can trade at all to be honest that’s why I stopped. I recognize that I suck and need some help.
Here is what works for me. Go here: https://www.quantacula.com/ or https://www.amibroker.com/ Yes, you have to learn to code on some level. Try to find a system that works on a few stocks you want to trade. Highly liquid is best for me. If you can find a system that trades at least a few times a month, with a decent win rate, profit factor, drawdown, etc., and over a few years, then take a shot at "converting" it to long options only. There's IV, theta, delta to consider, but to me the safety (yes you will almost certainly lose most of the option value on a bad trade, but the dollar loss compared to the same profit potential as long stock will be far less at risk.) But of course if you put most of your account in just a few trades you will get slaughtered. I'm very comfortably retired with no need to ever work again, so that takes pressure off for me. This is not for everybody and to tell the truth I don't make much money from it, but I have been profitable. But I also haven't been trying that hard in years past. I'm hitting it a little harder this year with multiple strategies. We'll see what happens. Edit: I didn't mean to imply that you could just grab a free system and make millions. You will have to find your own way. But at least some of the free systems will get you started so that you can see the possibilities.
Buy ETF index when the market is at the bottom. I bought it when it was on its way down and this takes a lot of nerve. I stopped before it hit the bottom because the fear was unbearable. It was in 2008 and this kind of event is not that frequent. On a shorter time frame, I look at chart and follow the trend. Of course, need to safe guard against fake trend and it happens very often. I feel that taking profit is harder to do. Entering and cutting loss are more mechanical.
If you bought SPY on margin starting 2009, by today your CAGR net of margin interests would be much better than holding SPY. Now instead of margin, if you played with options (long calls, short puts, bull spreads....) you might get even better results. This is just one big macro bet on the bull market.