I have found that buying at bottoms & seling at tops of linear regression channels or simple price channels is managable & can be profitable. I don't beleive in the "Holy Grail" indicator so I rely on 21,50 SMA's, volume and to a much lessor extent look at MACD/RSI to confirm overbought/sold conditions. I have traded QQQQ's and for high confidence trades used QID & QLD. For slighlty longer trends used credit/debit spreads. QQQQ's tend to be a bit unpredictable but a strong mover, so you need to be prepared to cut losses short.
This can be applied to simple Calls & Puts just select them wisely to provide for minimal Theta loss and maximum Delta gain. I would place them using predefined bracket order with stop loss and limit profit targets.
Regardless of strategy the most important rule is to keep losses at an absolute minimum. I recommend max loss = 2% of risk capital and profit target should be +- 3 x max loss. You will need to track performance and adjust %'s to obtain ideal risk/return ratios. This happens to be the Holy Grail of proft. Read Alexander Elder's books !
Migo1
From: David Steele <dsteele_24@yahoo.
To: OptionClub@yahoogro
Sent: Friday, June 5, 2009 4:40:06 PM
Subject: [TheOptionClub.
| Does anybody have any good directional strategies they used for long calls and puts. i would like a good methodology for playing directional plays. |
__._,_.___
The goal of TheOptionClub is to provide a forum for members to work together for the purpose of furthering our individual understanding option trading. All messages and postings, and any materials circulated are provided for discussion and educational purposes only. No statement contained in any materials from TheOptionClub should be considered a recommendation to buy or sell a security or to provide investment, legal or tax advice. All investors are encouraged to consult a qualified professional before trading in any security. Stock and option trading involves risk and is not suitable for most people. There is no guarantee that any information provided is accurate and, may in fact, be wrong. It is understood that the participants in TheOptionClub have varying backgrounds and degrees of experience in option trading, and that regardless of experience each member is considered a student. As such, any information distributed through TheOptionClub should be considered with a critical mind and not relied upon as an authoritative source.
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
MARKETPLACE
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe
.
__,_._,___
No comments:
Post a Comment