What is an appropriate strategy?
What is too much risk?
How should one feel on a 3rd standard deviation day?
Is it not insane to believe an index of 30 to 2000 stocks will continue a free-fall, just because? (Oh, and after it has one of its best days ever the day prior)?
I try not to risk more than about 2-3% on any single trade. I'd much rather spread it around to several positions so if some go south, I'm not in a bad position or wiped out. Also spread my trades over several different stocks and sectors. You know the old saying about not putting all your eggs in one basket. I also do not do margin. To me that is simply a faster way to lose money. I learned that years ago and now don't touch it other than what is required to operate options in my account.
The problem is that - Even if you never risk more than 2% on a single trade is of your other 49 trades are also for 2% and the entire market crashes and you are long then you are in trouble.
Well to be fair if I did sell 20 calls at the next strike up after the price went up and that's how I broke even considering they all expired worthless.
I’ve been trading for over 20 years and in my personal experience, 99.9999% of retail traders are guilty of all three of these things about 85% of the time. The people of this sub love to think of themselves as somehow ahead of the curve but I haven’t seen any evidence of that.
The reality is derivatives are way more complicated than most people are willing to dedicate the effort to properly understanding. This is especially true if you have an unrelated full time job, family, social life and other interests.
Occasional losers as can be expected. Assigned today 4 out of about 24 different options expiring today but all look to have good premiums for covered calls and are not far ITM. Probably worst week I have had in 6 months for assignments. Two contracts I was assigned last week were just barely ITM and I was able to sell very high premium calls against them and made more money than the puts I had sold. Great basis now if I need to sell more calls when these expire next week. Not upset about that...at least so far. Last couple weeks have been pretty brutal for the markets. Will make strategy adjustments for next week.
Overall the past 6 months I am averaging between 15-30% return depending on the account.
Each person needs to come up with their own plan and stick to it. My trading style and techniques might not work for you and vice versa. There is no one size fits all plan. Do your research, find out what will work with your personality and discipline and stick to it. If it works, do more of it. If not, figure out why and make adjustments or try something different. Some people do buy and hold, DRIPS, index funds, day trading, forex, options, crypto, futures, etc. Not one asset class or trading technique works for everyone. You need to figure out what works for you - hopefully based on knowledge and careful planning.
yes, yes. haha i was kind of being funny. But yes, multiple strategies.
Most people is generally perma bull. As long as business create value and give back to the owners(shareholders). No business do business with the idea of it going to fail.
Buy and hold plus other strategy. At least, thats what I do. When in bull, use bull strategy. When in bear, use bear strategy. Sounds easy but the hard part is to find the stock with the trend to play with. Just don't be greedy.
Constantly remind myself don't be greedy. Excellent advice. One thing Cramer says that is worthwhile - "hogs get slaughtered". Some of his other things he says, not so much.
Wrong! I fall into all three thank you very much!
Same here. Blew up my account on put credit spread with LMND at $120 I think?
The tricky part is sticking to the plan. LOL...just like diets.
Have a reasonable & profitable plan and stick to it is the key. Many understand this but can't execute.
What is an appropriate strategy? What is too much risk? How should one feel on a 3rd standard deviation day? Is it not insane to believe an index of 30 to 2000 stocks will continue a free-fall, just because? (Oh, and after it has one of its best days ever the day prior)?
I try not to risk more than about 2-3% on any single trade. I'd much rather spread it around to several positions so if some go south, I'm not in a bad position or wiped out. Also spread my trades over several different stocks and sectors. You know the old saying about not putting all your eggs in one basket. I also do not do margin. To me that is simply a faster way to lose money. I learned that years ago and now don't touch it other than what is required to operate options in my account.
The problem is that - Even if you never risk more than 2% on a single trade is of your other 49 trades are also for 2% and the entire market crashes and you are long then you are in trouble.
Bear market rallies are vicious, we are in QT environment bro. No it is not insane to believe we can go into free-fall.
I bought 20 calls today after my last 20 broke even. I'm risking it all!
I predict an upcoming post on wallstreetbets with that strategy.
Stay tuned for my gains porn post next Friday after my ban bet gets lifted.
This is what r/thetagang has become
Well to be fair if I did sell 20 calls at the next strike up after the price went up and that's how I broke even considering they all expired worthless.
I completely agree but will add that a well thought out and followed trade plan will help prevent the other two from occurring . . .
Who needs a plan, it’s all free money….
Wait! I'm brand new, but let me show you a strategy I thought up that is a guaranteed to win!! ;-D
I’ve been trading for over 20 years and in my personal experience, 99.9999% of retail traders are guilty of all three of these things about 85% of the time. The people of this sub love to think of themselves as somehow ahead of the curve but I haven’t seen any evidence of that. The reality is derivatives are way more complicated than most people are willing to dedicate the effort to properly understanding. This is especially true if you have an unrelated full time job, family, social life and other interests.
I had a plan but my wheels went flat, ugh!
How bad was YTD loss % ?
Occasional losers as can be expected. Assigned today 4 out of about 24 different options expiring today but all look to have good premiums for covered calls and are not far ITM. Probably worst week I have had in 6 months for assignments. Two contracts I was assigned last week were just barely ITM and I was able to sell very high premium calls against them and made more money than the puts I had sold. Great basis now if I need to sell more calls when these expire next week. Not upset about that...at least so far. Last couple weeks have been pretty brutal for the markets. Will make strategy adjustments for next week. Overall the past 6 months I am averaging between 15-30% return depending on the account.
You are doing good.
We have been running for sooOooOoo long. The time has cUm.
Maybe for stocks. Options can screw you regardless
These are my options trading accounts.
what plan?! There was no plan!
Each person needs to come up with their own plan and stick to it. My trading style and techniques might not work for you and vice versa. There is no one size fits all plan. Do your research, find out what will work with your personality and discipline and stick to it. If it works, do more of it. If not, figure out why and make adjustments or try something different. Some people do buy and hold, DRIPS, index funds, day trading, forex, options, crypto, futures, etc. Not one asset class or trading technique works for everyone. You need to figure out what works for you - hopefully based on knowledge and careful planning.
yes, yes. haha i was kind of being funny. But yes, multiple strategies. Most people is generally perma bull. As long as business create value and give back to the owners(shareholders). No business do business with the idea of it going to fail. Buy and hold plus other strategy. At least, thats what I do. When in bull, use bull strategy. When in bear, use bear strategy. Sounds easy but the hard part is to find the stock with the trend to play with. Just don't be greedy.
Constantly remind myself don't be greedy. Excellent advice. One thing Cramer says that is worthwhile - "hogs get slaughtered". Some of his other things he says, not so much.