All I will say is that the only thing you need to make money trading..is..a simple Bar Chart.. providing of course your head is clear and you are totally focused on what you are doing..and that is..risking your money to make some money!
I will give it another try. I selected a couple of stocks on my watch list and will watch their charts. I am incorporating chart reading into my methodology and see if that works better. Regards,
I need to clarify my statement in relation to a bar chart being the only thing you need to make money! For me, yes, for others, maybe yes or maybe no! What I really meant was that when you look at charts for trade decisions..then..it can be best to just look at a bar chart..with no Iagging indicators such as MA or Stochastics. The more things you look at..the more things you see..need say no more! I came across another good read in relation to options trading..and..as the content makes perfect sense..it is a very good book. You have a long way to go..or.. should I say you still have a good deal of relevant knowledge to acquire. There are numerous option strategies that suit your recent trades..in fact..I learned that there are option strategies that can be used to boost profits when opening a trade..which add no additional risk to your initial risk!!! If you do not use P&L diagrams for options trading then you really are pissing about..you must work out your risk and profit target before you open the trade..then..either adjust or close out..as required.. depending on what underlying does once you are in the trade. You must also understand volatility..and the difference between historical..implied..and expected volatility.. especially if you are going to trade earnings or expirations. With the right knowledge..and the correct approach.. options trading can be far less risky than trading shares or futures outright..but requires more time and more work..no gain..without pain
Appreciate your comments sir. Honestly, your observations are spot on. I think I understand your points and totally agree with you that I am still very new to options and have lots to learn. I have been trading options full time only since 2013. Before I started, I did study quite a few option books (McMillan and Natenberg are my references) and learned to calculate and analyze option prices using B-S. Back in 2013, after about six months trading various options strategies: long calls, long puts, covered calls, cash secured puts, straddles, strangles, calendar, spreads, bfly... I came to the conclusion to be profitable I had to develop my own strategy and kept things simple as I was (and still am) too inexperience to trade anything fancy. Today, my biggest weakness: Risk management (that is why I am studying Kelly) and if I am not careful, I can lose a lot of money very quickly. What else do I need? I used analytics and fundamentals to pick my trade. I need better timing and I think your suggestions of chart reading can help improve my timing and for that I am forever grateful. Thanks again.
No matter what vehicle you use..the most appropriate way is.. Analyze Decide Execute Monitor Adjust Terminate This process can take days..weeks..or seconds..it is up to the individual to find out what approach is best suited for oneself..as every person is different! It is no use trading options if you are not willing to learn all about pricing models and statistics..as without this knowledge you can not get past the first step..so how can you expect to complete the process! It is no good daytrading the ES if you are not willing to learn all about..what??? It appears that it is very important that you first find out what it is you need to learn about..how do you do that???
Well, no books (one exception is a very special book I may have got from you some time ago) or Internet fuss for me, I read the chart as best I can and I usually have no problem identifying low risk entry points. however, when my head got stuck in my ass, after I had a streak of good profitable trades, I got way overconfident and I started to trade like a dickhead, and of course the market gave me the right punishment for my vanity, on top of that, being still overconfident I stayed in the trades well after it was totally clear that I had to get out. Lesson learnt, hopefully. I am getting my head out of my ass, and going back to trade as I know I should do, low risk entries and if wrong get out quickly, take the needed loss and move on. It will take some careful monitoring of my mental and emotional status, but there is no other way. thanks for all your posts, I find them to stimulate my thinking!
In effect..what you are really saying is that successful trading is made up of around 90% to 95% emotional control..and 5% to 10% trading activity. This is true..it is not text book rubbish..and you know it is true as you have experienced it..in exactly the same way that I have..many times over !! The book..yes..by far the best book I ever came across on the financial markets..a real eye opener.. which..should lead to better understanding..and thus..better results by changing bad habits caused by silly and ridiculous thoughts. Even after all that..it is still hard..and..the reason why it is so had..is.. because it is so simple!! Hard to contemplate..but the reality of successful trading..and yes..it surely is "all in the head"..so without a clear head..all efforts will be futile..no matter who you talk to and no matter what you learn. Sometimes I wish I knew nothing about trading..as less really is more when it comes to making good money trading
Yes, the hard part is to keep a clear mind, clear from Bias, from Internet rubbish, clear from convictions of price moving one way or the other, and especially, clear of Greed and Fear. The rest is so basically easy that it is hard to believe so many waist all that energy for the fruitless search for the holy grail, for the next miraculous indicator, for the book that explains it all...
Yes..clear mind is a prerequisite to successful trading..but..you must also develop the appropriate skills and attitudes.. otherwise it becomes just like another useless academic exercise ! I can make good money trading once I clear my head of all silly and ridiculous thoughts..get set up well before the open..follow the exact steps (based on my experiences) that are required..and execute the trades without thinking about them If any of the above are not followed..I will either make very small money..or lose a small amount..no matter what happens..I will never lose a big amount..I will shut down and walk away before that happens..as it has happened me way too many times in the past..but never again! The best way I have found to keep on track..is to keep telling myself that I am trading against a bunch of idiots who have been sucked into the big world of easy money..and I am not going to let myself become one of them ! It works..not a nice thing to do..but that is life..the big fat arse lazy bastards at the top don't give a shite about you..so why should you about anyone else in the game
Time to correct some of my previous statements..not sure when or where..but I am sure I did say this.. "paper trading is of no real value" I was wrong..paper trading is a must before risking your money..and if you think about it..how can it be any other way..if you can't make money with a sim account..then how the hell do you expect to make it with a live account..where you will have all the emotional stuff to deal with also! I do.. however..think that it really only becomes very useful once you have some live experiences with winning and losing..as it makes you feel as if the paper trading is live trading.. which you must do to take it seriously So..yes..I was wrong..in fact..I was wrong about many things..still am..but at least now I know when I am wrong and when I need to do something about it..otherwise..I will just become another idiot looking for the "easy money"! When you can look back at how stupid you really were..and laugh about it..then you are making some real progress in understanding..and unless you change what you are doing..you can not expect any change in results..sounds so simple..yet so hard for so many to do..as changing bad habits is one of the most difficult things to do in life!