Christain,
I noticed you detest swing trading.
I'm wondering why.
Perhaps it is the same reason I also have a negative opinion of it, which relates to overnight trading?
Ross
--- In OptionClub@yahoogro
>
> Ok...
>
> So I have been thinking about this one, and have been reading the posts with great interest.
>
> Disclosure: I am not an options trader. I might use options to hedge positions, but that is about it. Though I do know the maths, pricing, etc on options.
>
> The question you put is if it is worth it... A number of years ago I wanted to break into the financial field (been in the mortgage and retail banking for most part). And like you I was confronted on how to get experience in this field.
>
> So I bought books, read blogs, opened an account and traded. My initial problem was not one of making money, but one of what I am comfortable with. For example I detest swing or momentum trading. I am a contrarian investor who day trades FX. Though I only now know this in hindsight.
>
> Back when I started I thought, hey lets do options, lets do futures, lets do X. And with many of these I was just too concerned about the money I would loose. Then I thought, hey why not take courses. But then I became suspect of the courses themselves since those who can give me secrets to make money should be able to make money themselves. Additionally these courses were really expensive.
>
> Bluntly put I was too cheap! So since I was a programmer I thought, hey here is another idea. Why not offer my programming services to other traders? And that worked like a charm! This one was also interesting because some traders would never want to give me their secrets, whereas others did not care.
>
> After having dealt with so many traders I have found that the best traders don't care about giving me their secret sauce. Granted I never "kiss and tell" and to this day I keep that a rule. Those who were the most secretive in my opinion were the ones who actually did not have a strategy.
>
> So while working for traders helped it never got me into the groove of professional traders. And it was then I decided to cut my teeth and take any programming job at an investment bank. I was picky on which department, but I took a job. At the one investment bank where I worked I was in the structured products and market making departments. I did not write the core algorithms, nor make any decisions I did get to see how structured products were created and how markets were made. Because my aim was not move up in the corporate world. My aim was to understand what investment banks do. I got to see under the covers so to speak.
>
> Now, I count myself lucky since I am COO of a very small hedge fund. I work with my traders, and work on strategies myself, but my job is to make money. The hedge fund is starting, and who knows if it will work out, but over the space of 5 years I went from a complete newbie to managing the order books of a very small hedge fund.
>
> How did my own trading work out? Actually pretty well. I can't complain.
>
> Looking back and thinking about this entire process I have to say the following:
>
> 1) Those who offer you knowledge (eg Christopher Smith) are far and few between, but you need to listen to them. What you will notice from them is that they don't give you advice, they give you knowledge. A big difference.
>
> 2) It's about cutting your teeth at a professional shop. I understand that there are self made traders, but having worked for traders and at an investment bank you learn what the industry is about. You think differently about the market.
>
> 3) You can't chase profit. You need to understand what you are good at. You can't be something that you are not. I myself am not an options person because there are too many moving parts. It's not that I don't understand options (trust me I learned all about them while working in the structured products department), it is not who I am. BTW I am on this mailing list because there are things I want to keep abreast in.
>
> Good luck...
>
> Christian Gross
>
> --- In OptionClub@yahoogro
> >
> > Great email Chris. Ultimately, I have to say that I'm very interested in stocks and options and will be probably until the good lord takes me home. I am very interested in options, i have the time, the intelligence, and will have the money. I simply wanted to throw the question out there to see if I put in the time then will I get the results. If it takes a year or two or 5, and I lose money but I still learn and grow into great investor then i'll pay the price. Everything has a price. Truthfully, options seem to be like one giant chess or Go game, and on that note I'm interested too. How can one use he's mind to generate a good income consistently? That's the question I want to answer with options trading.
> >
> > Thanks for the info chris !!
> >
> > --- On Wed, 5/20/09, Christopher Smith <chris@> wrote:
> >
> >
> > From: Christopher Smith <chris@>
> > Subject: Re: [TheOptionClub.
> > To: OptionClub@yahoogro
> > Date: Wednesday, May 20, 2009, 10:25 AM
> >
> >
> >
> >
> >
> >
> >
> >
> > This has been a very interesting thread to watch because I am often asked to recommend a book, or trading course, or provide advice in some fashion about how best to go about learning the profession of options trading. As a retail options trader, there is no one path and by virtue of the fact of our independence we are left to find our own way.
> >
> > I've been trading stocks since the 1980's and now options for several years. As Alex Jacobson has already mentioned, the key to success in this business is learning how not to lose money. That's the same rule Warren Buffet has hammered into his own skull: "Rule No. 1 - Don't Lose Money. Rule No. 2 - Don't Forget Rule No. 1."
> >
> > Can a retail options trader make money? Yes. But most do not. I believe that is a reflection of the general failure of most retail options traders to grasp the concept of risk management. Their focus is on profits. That's not where you focus needs to be. If you place yourself in the market the profits just sort of happen when you're busy preventing yourself from losing money.
> >
> > Yeah, you probably should learn about options pricing and the various option strategies. Knowing how to adjust positions is helpful. I'd suggest learning as much as you can about the subject. Ultimately, all of that knowledge is only as useful as your ability to manage risk and limit losses.
> >
> > Someone mentioned Dan Sheridan's program. I have a lot of respect for Dan Sheridan. I have watched many of his videos at he CBOE website. I'm planning on flying out to Colorado later this year to see him speak. His mentoring program has received nothing but positive reviews. But, that program does cost $6,500. Too much? Like most things its all relative. It's cheap compared to taking the full-boat curriculum at Invest Tools or Optionetics, which can exceed $20,000. It's expensive if your trading account is $5,000 or $10,000.
> >
> > Last month I launched what I am calling the "Trading Room." It's not for everyone. I have tried to keep it as affordable as possible, while still offering quality content. It's aim is to provide guidance on how to build and manage a portfolio of income trades. We also get into speculative and trend following trades. The basic focus is on learning how to build and manage a portfolio of options trades, while controlling and managing risk. No rocket science or secret software.
> >
> >
> >
> > TheOptionClub. com Trading Room
> >
> > DiscoverOptions lauched a new educational product on covered calls. It's priced at the lower end of the scale and teaches you how to find and manage covered call positions. Sound boring? I've been running covered calls in my wife's IRA, netting between 1% and 3% per month. One nice aspect of this course is that it is focused on one simple strategy that has been working in the current market environment. In fact, I spoke with the guys over there yesterday and they continue to honor our discount code they mentioned during the webinar we hosted.
> >
> >
> >
> > Video Re-Play of the Discover Covered Calls Webinar
> >
> > Which one should you take? Take them all or don't take any of them. It all comes down to finding a method or style of trading with which you're comfortable. Personally, I spend money every year to attend seminars or take a trading course of one type or another. The one common denominator is the ability to manage risk and limit losses on trades to a level from which you can recover.
> >
> > If you find yourself opening trades "hoping" that "this one" will work out....you're probably not there yet. Your focus is still on profits. When you find yourself opening trades, identifying your price risks and your vega risks, noting your plan for adjusting or closing in the event the trade goes against you, checking your planned risk against potential profit to determine whether the reward justifies the risk, then you're getting closer. You're focused on risk and balancing it against reward.
> >
> > How long does this take to learn?
> >
> > It takes more than a weekend. It takes more than a few months. It requires a significant committment of time and energy, and some money, to really learn. Is it worth doing? Well, is it worth going to medical school? We could debate that, but suffice to say that if you have an affinity for medicine and caring for people attending medical school may be very worthwhile. If not, perhaps medical school isn't for you. I love this stuff and don't mind spending loads of time on it. Yes, it's worth it to me. You get to decide whether it's worth it to you.
> >
> > Christopher Smith
> > TheOptionClub. com
> >
>
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