Thursday, January 7, 2010

Re: [TheOptionClub.com] May I ask?

 

The "right" curriculum or even a reading path is something of a moving target -- there's passage of time, so, for example, I have the '05 book by Saliba, but is '09 book might be more applicable given the crash or it might have lost its edge (I'd bet on the former.)  I've certainly been updating my library in '08 and '09.  And there's the "cash cow" syndrome where a powerful, succinct and quite brilliant author like Augen could easily have put his collected works into one book, but instead has three unparalleled books (all "advanced" reading) which I would recommend to any option trader.  


There's a good-sized shelf of excellent material, but a quick scan of Amazon shows hundreds and hundreds of titles from authors I've read or at least heard of, but would argue against (eg. Fontanills) and there's some excellent "experience" books like Schwager ("New Wizards" is no doubt another cash-in/cash-cow on his early "Wizard" books interviewing great traders, but might well be worthwhile given the '08 crash and ongoing depression/recession) as well as "foundation" books like McMillan (required reading, in my opinion.)  So it's hard to say where to start.  I'd also read Van Tharp for the business planning and psychology of the business and the game.  An essential component to any good business plan.  

I'd recommend "Fooled By Randomness" and "Evidence Based Technical Analysis" as necessary for the more "philosophical" preparedness (and the recurring phenomenon of encountering "new" things like analysis techniques or trading schemes that seem to make trading a slam-dunk, but once you've read back through the first half of the last century, you come to realize there's nothing new under the sun (including the sun worshippers and moon gazers, etc.)  You might read "Far from Random" to counterpoint those two and read Black Swan and perhaps, if you have a head for mathematics and analysis, Dynamic Hedging by Taleb.  By first reading about the history of trading, you will more quickly recognized the charlatans and the bunk and realize you don't need to spend hundreds or thousands on training course events or spoon-feeding education vendors (education has become the boom and boon and boondoggle of the retail trader industry.)

There's about four to six weeks of reading and perhaps a full year of study, research, practical application, practice and skills development.  I think if you buy one, I'd say McMillan, and study it thoroughly, practice using an excellent paper money practice platform (nothing is better than www.thinkorswim.com) you should be confident to look at any trade or position and be able to simple "think" in terms of the option consequences in a matter of say two months of obsessive work. : )

It's a difficult thing to recommend specifically because some books are excellent in the context of the desires and abilities of the trader -- someone pursuing Elliott Waves with Prechter is going to admire different books (and surely some people trade very well with EW, but many fail to make it happen, so I'm reluctant to encourage novice traders to take on the hoary, old chestnuts.)

Equally well, I think it's poor advice to point directly to the "instant gratification" sources like www.wallstreetteachers.com ... they sell a handful of CDs, at least two of which are easily applied and beneficial, but their overall proposition is unwieldy and, again, I hear a mixed bag of success and frustration when talking with their customers.

I've seen many of the free seminar/chat sessions at thinkorswim and I think they're more meaningful and give a novice trader a "true" feel for trading and a good beginning down the lifelong path of being a student of the market.  Whether someone becomes a price and volume ("tape reader") or a deep technical scientist or (as is very popular in recent years) a combination of fundamental analyst and technical trader, there's many walks to this business of becoming a retail trader.

I find option trading to be a limitless intellectual challenge and helluva of mind game with ample adrenalin in your veins once you're into hand-to-hand combat with a beast that will always be many times your size and rarely if ever makes a mistake.  Just remember to get some walking in every day, try to eat regular meals and get a good nights' sleep -- these are the early pitfalls of new traders. : )

All that said!  One of the reasons I joined a few new places to read other people's advice was to learn what people are reading and what they recommend, so I'm not suggesting I've got definitive authors -- just a few good ones that have helped me along the way and I look forward to reading what others have open.


Cheers,


On Thu, Jan 7, 2010 at 5:51 PM, praesto12 <Praesto12@yahoo.com> wrote:
 

Thanks for the info guys, there's a lot to think about. I think the game Go originally had the catch phrase " 5 minutes to learn and a lifetime to master."  I am a gamer, and I enjoy strategy and thinking about what to do next however this means nothing in terms of mastering the game of options, like anything of worth I would imagine that it does take time. I think you guys mentioned some books to read. I will read them. Where's the best place to paper trade? Do you think that at some point in the future every body will be trading options?? haha.
 
Thanks for the info.
 
Richard


From: Mojo <beeper212@yahoo.com>
To: OptionClub@yahoogroups.com
Sent: Thu, January 7, 2010 3:00:00 PM

Subject: Re: [TheOptionClub.com] May I ask?

 

I am (and I'm sure a lot of other people are) but its far from 'easy'.  Don't get me wrong, I think almost everyone can get there but the process is brutal.


What's the catch? That's a great question.  For me, I pick out the following:

1) Options trading has enormous intellectual and scientific appeal.  It sucks in folks that are technically / financially oriented who foolishly make the assumption that since there were successful in the lives that they will be successful as option traders as well.  I made that assumption and couldn't have been more wrong.

2) It reminds me of the old commercial for Othello "Minutes to learn and lifetime to master"

3) The lure of high probability trades <cough cough "iron condors"> cause more account death than anything I've ever seen.  High prob should be taught last if at all.

4) Once you get the mechanics down, math down, strategies down, and figure out what is working right now you still have to overcome yourself and your different emotional beings.  Personally, I would rather box a room full of ninjas.  :)

I've been at this for more than 5 years and still feel like a NOOB.

HTH,

Mojo
 
You can find my online trading journal at http://www.insanemoney.com .


From: praesto12 <Praesto12@yahoo. com>
To: OptionClub@yahoogro ups.com

Sent: Thu, January 7, 2010 2:28:24 PM
Subject: Re: [TheOptionClub. com] May I ask?

 

Are any of you guys consistently making 4,000 to 10,000 a month trading options?
Trading options to make money seems too easy. What is the "catch" ? what do you have to do in order to trade and make consistent profit??
 
Richard


From: Adam Green <adam.cell.phone@ gmail.com>
To: OptionClub@yahoogro ups.com
Sent: Tue, January 5, 2010 11:50:46 PM
Subject: Re: [TheOptionClub. com] May I ask?

 

On Tue, Jan 5, 2010 at 5:21 PM, allen <allen2462001@ yahoo.com> wrote:
>
>
>
> In starting off in a "New Year" 2010, I have decided to ask as many question that one is allowed :)

You're over your limit.
: )

>
> To learn from each of you.
>
> Are there perimeters about asking questions on here..

I'm pretty new "here" myself, but I've been involved in email lists
since the late 80's (yes, it was a tad different back then.)

I think the golden rule is that there are no stupid questions, only
stupid people.

Kidding!






--
Adam

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