I will give you a surprise
- Thread starter DanPickUp
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Hi Summa
You can trade what ever on such charts. What strategies did you trade or which one do you plan to trade. Give me an idea or a name from a strategy or two you may are interested in.
By the way, I posted once in AW10 thread a PDF file with some more difficult strategies and that is stuff you can trade in India. I got it from a student from India, which asked me for help to understand it, as he did some kind of writing about it for his final examen.
What about back spread trading ? That was one of the strategies in that file. Are you interested in some thing like this ?
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
You can trade what ever on such charts. What strategies did you trade or which one do you plan to trade. Give me an idea or a name from a strategy or two you may are interested in.
By the way, I posted once in AW10 thread a PDF file with some more difficult strategies and that is stuff you can trade in India. I got it from a student from India, which asked me for help to understand it, as he did some kind of writing about it for his final examen.
What about back spread trading ? That was one of the strategies in that file. Are you interested in some thing like this ?
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
Hi Dan,
I am interested in generating some consistent money(5 to 10%) monthly without having to spend much time in the market(like sticking to the terminal most of the time). When i was googling for the same, i found CreditSpread to be one good strategy which satisfy this need ...
Started exploring about the same and did some paper trading also.
From your post, i found back spread also a good strategy to trade aggressively(compared to creditspread). But i need little defensive technique to produce smaller and consistent returns. Can you enlighten with some ideas for these requirements?
But sometimes when i am quite sure of certain trend in the underlying like the trendline break in the pnf chart, can i combine creditspread with backspread to get good returns? Your input will certainly help.
Btwn, can i know how to find the post/file you were mentioning about in AW10 thread? i tried finding posts from you. but they are too many.
Thanks,
...summasumma
I am interested in generating some consistent money(5 to 10%) monthly without having to spend much time in the market(like sticking to the terminal most of the time). When i was googling for the same, i found CreditSpread to be one good strategy which satisfy this need ...
Started exploring about the same and did some paper trading also.
From your post, i found back spread also a good strategy to trade aggressively(compared to creditspread). But i need little defensive technique to produce smaller and consistent returns. Can you enlighten with some ideas for these requirements?
But sometimes when i am quite sure of certain trend in the underlying like the trendline break in the pnf chart, can i combine creditspread with backspread to get good returns? Your input will certainly help.
Btwn, can i know how to find the post/file you were mentioning about in AW10 thread? i tried finding posts from you. but they are too many.
Thanks,
...summasumma
Hi
Summa, what can I say to your post ? Ok, fine. It is possible to make.
Even then, I have to say : At your stage it may is not realistic. Later on, yes, but with your knowledge at the moment it is a bit out of range. Just what I can read out of your above post. So what, never mind. If you want to do it and believe in your self, you will find a way.
For safety reasons, stay with paper trades at the moment. Paper trades will not give you any ideas about how you react in the live market and about what kind of filled you will get. Even your money management will be only very theoretical, as you not will get live moments you can feel, when your stop is taken and market moves again in your direction with out you. The best thing with PT is that you still have your money in your pocket at the end of the day.
A credit spread and a back spread are two very different strategies. Both are low risk, if traded the right way. AW10 has written enough about credit spreads. A credit spread has two legs and a back spread has three legs. In a credit spread you buy one leg and you sell one leg. In a back spread you buy one leg and you sell two legs or vice versa. You can do it also with two long and three short legs or with three long legs and five short legs and vice versa. If you trade back spreads, you have to be aware about time decay, specially when you use many legs for one back spread. Why ?
Summa, if you now already thought: Oh, what about is he talking, then you know, what is in front of you.
If this few lines have been just a peace of cake for you, then you may want to start with simple live trades.
If you do so, what kind of option software do you use ? Oracle or what is it, what you use ? I ask you this, because you not want to spend time in front of your screen. If so, you need to know in advance, where your break evens or danger zones are and this you only see on strategy analyzing pictures which those software programs can do. If you now thought again : Oh, I do not have such software or I have it, but I do not know how to use it, then you see the next part in front of you, which you have to manage to come to the finish line of your idea.
Some more things to consider beside what I already mentioned above in that or this way for your idea:
- Understanding volatility in the market.
- Understanding the different order types you can use on your platform or by your broker for options.
- Knowing how to calculate prices of options.
- Having a minimal knowledge about charts and some indicators.
- Knowing your stop loss criteria for your option trading.
- Having clear thoughts about your money management.
- Having a clear planing about how much time to spend for learning and how much time to spend for live trading.
- Having a clear plan, when to make sport and spend time for the health of your body.
About the post in AW10 thread: The same for me, I would have to search for it. It was posted last year in spring or summer time.
Summa, if you have more questions or want to spot on that or this, just ask.
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
Summa, what can I say to your post ? Ok, fine. It is possible to make.
Even then, I have to say : At your stage it may is not realistic. Later on, yes, but with your knowledge at the moment it is a bit out of range. Just what I can read out of your above post. So what, never mind. If you want to do it and believe in your self, you will find a way.
For safety reasons, stay with paper trades at the moment. Paper trades will not give you any ideas about how you react in the live market and about what kind of filled you will get. Even your money management will be only very theoretical, as you not will get live moments you can feel, when your stop is taken and market moves again in your direction with out you. The best thing with PT is that you still have your money in your pocket at the end of the day.
A credit spread and a back spread are two very different strategies. Both are low risk, if traded the right way. AW10 has written enough about credit spreads. A credit spread has two legs and a back spread has three legs. In a credit spread you buy one leg and you sell one leg. In a back spread you buy one leg and you sell two legs or vice versa. You can do it also with two long and three short legs or with three long legs and five short legs and vice versa. If you trade back spreads, you have to be aware about time decay, specially when you use many legs for one back spread. Why ?
Summa, if you now already thought: Oh, what about is he talking, then you know, what is in front of you.
If this few lines have been just a peace of cake for you, then you may want to start with simple live trades.
If you do so, what kind of option software do you use ? Oracle or what is it, what you use ? I ask you this, because you not want to spend time in front of your screen. If so, you need to know in advance, where your break evens or danger zones are and this you only see on strategy analyzing pictures which those software programs can do. If you now thought again : Oh, I do not have such software or I have it, but I do not know how to use it, then you see the next part in front of you, which you have to manage to come to the finish line of your idea.
Some more things to consider beside what I already mentioned above in that or this way for your idea:
- Understanding volatility in the market.
- Understanding the different order types you can use on your platform or by your broker for options.
- Knowing how to calculate prices of options.
- Having a minimal knowledge about charts and some indicators.
- Knowing your stop loss criteria for your option trading.
- Having clear thoughts about your money management.
- Having a clear planing about how much time to spend for learning and how much time to spend for live trading.
- Having a clear plan, when to make sport and spend time for the health of your body.
About the post in AW10 thread: The same for me, I would have to search for it. It was posted last year in spring or summer time.
Summa, if you have more questions or want to spot on that or this, just ask.
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
I would not say its a piece of cake for me. But certainly its not a tough things to understand also. I believe that i have basic understanding of how these strategies work atleast like with many legs backspread or creditspread positions will be created.
I am using the options calculator tool comes with optionsxpress for my Paper Trading. Once i type-in the details of the options legs i want to trade, it gives me details of the range where i can get profit/breakeven/loss. So i calculate my risk on that particular trade based on this levels and also it helps in deciding what kind of repair i should do in my position if i enter into my LOSS zone.
Also it gives the probability of price closing below or above certain price ranges (probably based on volatility,days left to expiry etc..???) which i am considering before i enter the trade. Does it sound ok or im missing something?
I am not very clear on this. I will google it and also dont mind if u can explain a bit
They support most of the advanced options trading strategies. But i am interested in creditspread right now to begin my journey and i am happy with their platform and ordertype they support.
I am not very clear on this also. Currently i just see the trend of the underlying and enter the trade. If it is positive i sell put creditspread and if it is negative, i sell call creditspread to enter the trade. Am i correct in this?
Yes.i believe i do have basic knowledge and have my own rules to read the charts.
My stoploss plan is to exit the position as soon as the price touches the stirke price of the leg which i have sold in creditspread. for ex, Being positive on google stock and my position in google 475(short)/470(long) put creditspread and CMP is 485. I exit the trade as soon as google CMP reaches 475. Then decide on whether to enter call creditspread or just rolldown to 455/450 range. This decision i make is based on my chart reading skills. Your input on this???
My trading plan is not to hold till expiry. I want to take out profit as soon as i 50 cents.(i call it '50 cents plan' ). I enter with 10 lots. Per lot its 50$ and for 10 lots its 500$ i expect. If i get that, i exit and start seeing opportunity in other stock/index option.
I believe in protecting the invested capital is more important than making profit in the trade. Because if my system is quiet good, it will takecare of giving returns. But if i dont react when i enter LOSS zone, it will certainly disturb my mindset and i might start doing weird things.
I decide to do PT for 3 months. Then start live trade with some small margin to get the feel of it before pushin more money.
This is the worst part. I never do any physical activity. Really worried. Planning to join swimming or dance class soon
Whatever i have mentioned in this post are only my initial plans. As and when i find that something is wrong i will keep updating these rules and try to make it better.
Thanks,
...summasumma
I am using the options calculator tool comes with optionsxpress for my Paper Trading. Once i type-in the details of the options legs i want to trade, it gives me details of the range where i can get profit/breakeven/loss. So i calculate my risk on that particular trade based on this levels and also it helps in deciding what kind of repair i should do in my position if i enter into my LOSS zone.
Also it gives the probability of price closing below or above certain price ranges (probably based on volatility,days left to expiry etc..???) which i am considering before i enter the trade. Does it sound ok or im missing something?
I am not very clear on this. I will google it and also dont mind if u can explain a bit
They support most of the advanced options trading strategies. But i am interested in creditspread right now to begin my journey and i am happy with their platform and ordertype they support.
I am not very clear on this also. Currently i just see the trend of the underlying and enter the trade. If it is positive i sell put creditspread and if it is negative, i sell call creditspread to enter the trade. Am i correct in this?
Yes.i believe i do have basic knowledge and have my own rules to read the charts.
My stoploss plan is to exit the position as soon as the price touches the stirke price of the leg which i have sold in creditspread. for ex, Being positive on google stock and my position in google 475(short)/470(long) put creditspread and CMP is 485. I exit the trade as soon as google CMP reaches 475. Then decide on whether to enter call creditspread or just rolldown to 455/450 range. This decision i make is based on my chart reading skills. Your input on this???
My trading plan is not to hold till expiry. I want to take out profit as soon as i 50 cents.(i call it '50 cents plan'
). I enter with 10 lots. Per lot its 50$ and for 10 lots its 500$ i expect. If i get that, i exit and start seeing opportunity in other stock/index option.I believe in protecting the invested capital is more important than making profit in the trade. Because if my system is quiet good, it will takecare of giving returns. But if i dont react when i enter LOSS zone, it will certainly disturb my mindset and i might start doing weird things.
I decide to do PT for 3 months. Then start live trade with some small margin to get the feel of it before pushin more money.
This is the worst part. I never do any physical activity. Really worried. Planning to join swimming or dance class soon
Whatever i have mentioned in this post are only my initial plans. As and when i find that something is wrong i will keep updating these rules and try to make it better.
Thanks,
...summasumma
I would not say its a piece of cake for me. But certainly its not a tough things to understand also. I believe that i have basic understanding of how these strategies work atleast like with many legs backspread or creditspread positions will be created.
I am using the options calculator tool comes with optionsxpress for my Paper Trading. Once i type-in the details of the options legs i want to trade, it gives me details of the range where i can get profit/breakeven/loss. So i calculate my risk on that particular trade based on this levels and also it helps in deciding what kind of repair i should do in my position if i enter into my LOSS zone.
Also it gives the probability of price closing below or above certain price ranges (probably based on volatility,days left to expiry etc..???) which i am considering before i enter the trade. Does it sound ok or im missing something?
I am not very clear on this. I will google it and also dont mind if u can explain a bit
They support most of the advanced options trading strategies. But i am interested in creditspread right now to begin my journey and i am happy with their platform and ordertype they support.
I am not very clear on this also. Currently i just see the trend of the underlying and enter the trade. If it is positive i sell put creditspread and if it is negative, i sell call creditspread to enter the trade. Am i correct in this?
Yes.i believe i do have basic knowledge and have my own rules to read the charts.
My stoploss plan is to exit the position as soon as the price touches the stirke price of the leg which i have sold in creditspread. for ex, Being positive on google stock and my position in google 475(short)/470(long) put creditspread and CMP is 485. I exit the trade as soon as google CMP reaches 475. Then decide on whether to enter call creditspread or just rolldown to 455/450 range. This decision i make is based on my chart reading skills. Your input on this???
My trading plan is not to hold till expiry. I want to take out profit as soon as i 50 cents.(i call it '50 cents plan' ). I enter with 10 lots. Per lot its 50$ and for 10 lots its 500$ i expect. If i get that, i exit and start seeing opportunity in other stock/index option.
I believe in protecting the invested capital is more important than making profit in the trade. Because if my system is quiet good, it will takecare of giving returns. But if i dont react when i enter LOSS zone, it will certainly disturb my mindset and i might start doing weird things.
I decide to do PT for 3 months. Then start live trade with some small margin to get the feel of it before pushin more money.
This is the worst part. I never do any physical activity. Really worried. Planning to join swimming or dance class soon
Whatever i have mentioned in this post are only my initial plans. As and when i find that something is wrong i will keep updating these rules and try to make it better.
Thanks,
...summasumma
I am using the options calculator tool comes with optionsxpress for my Paper Trading. Once i type-in the details of the options legs i want to trade, it gives me details of the range where i can get profit/breakeven/loss. So i calculate my risk on that particular trade based on this levels and also it helps in deciding what kind of repair i should do in my position if i enter into my LOSS zone.
Also it gives the probability of price closing below or above certain price ranges (probably based on volatility,days left to expiry etc..???) which i am considering before i enter the trade. Does it sound ok or im missing something?
I am not very clear on this. I will google it and also dont mind if u can explain a bit
They support most of the advanced options trading strategies. But i am interested in creditspread right now to begin my journey and i am happy with their platform and ordertype they support.
I am not very clear on this also. Currently i just see the trend of the underlying and enter the trade. If it is positive i sell put creditspread and if it is negative, i sell call creditspread to enter the trade. Am i correct in this?
Yes.i believe i do have basic knowledge and have my own rules to read the charts.
My stoploss plan is to exit the position as soon as the price touches the stirke price of the leg which i have sold in creditspread. for ex, Being positive on google stock and my position in google 475(short)/470(long) put creditspread and CMP is 485. I exit the trade as soon as google CMP reaches 475. Then decide on whether to enter call creditspread or just rolldown to 455/450 range. This decision i make is based on my chart reading skills. Your input on this???
My trading plan is not to hold till expiry. I want to take out profit as soon as i 50 cents.(i call it '50 cents plan'
). I enter with 10 lots. Per lot its 50$ and for 10 lots its 500$ i expect. If i get that, i exit and start seeing opportunity in other stock/index option.I believe in protecting the invested capital is more important than making profit in the trade. Because if my system is quiet good, it will takecare of giving returns. But if i dont react when i enter LOSS zone, it will certainly disturb my mindset and i might start doing weird things.
I decide to do PT for 3 months. Then start live trade with some small margin to get the feel of it before pushin more money.
This is the worst part. I never do any physical activity. Really worried. Planning to join swimming or dance class soon
Whatever i have mentioned in this post are only my initial plans. As and when i find that something is wrong i will keep updating these rules and try to make it better.
Thanks,
...summasumma
are you not trading indian markets????
Nice summasumma.....
are you not trading indian markets????
are you not trading indian markets????
so the available options are: US market(starts @ 7PM IST), forex(round the clock) etc. I find Options in US seems to be better bet as their trading platforms recognize almost all options strategies. Also with the help of sharing the knowledge with options trading experts like Dan, AW10., we can always improve in this...
Hi
Summa, that is a huge post. I will go through it point by point.
1. Knowing how many legs are used for a strategy is not enough to trade them successfully. You have to know the options greeks to trade multiple leg strategies. The options greeks have little effect on a credit spread but can have a huge effect on a back spread.
2. Option express is a good tool to start to test and play with different option strategies. Option express was mentioned to me in 2005 in Singapore in a seminar about diagonal spreads on the S&P 500. As I do not trade options on stocks, only options on futures and futures, this tool did not take much effect on me. As far as I know, today they also give the possibility to trade options on some futures.
In Indian you not can trade options on commodity futures. You only can trade them on stocks and Nifty. Correct me, if I am wrong.
Probability is only math and does not include the reality, which can bang you heavily when hit at the wrong moment in the wrong trade. Do not start to think that you are in a safe harbor when using this tool. It is a good tool and I use it very often, but I do not count on it as the Holy Grail.
I am not clear what you mean with that: And also it helps in deciding what kind of repair I should do in my position if I enter into my LOSS zone.
Could you elaborate on that or give an idea, what it does give you? Does it say you have to take this and this position, what repairs are, or what does it say to you personally?
3 That is part of the option Greeks and is called VEGA. Vega has little effect on credit spreads and huge effect on back spreads. If you want to trade options, you have to know the option greeks like your trouser pockets. This is a must !!
4 Ok, but not ok.
5 Very important for position trading, as you will have to know what price you plan to pay for an option at a certain level under certain conditions. Minimum knowledge then is to know, how to place such orders and then we are back in point 4. You will not be able to trade your idea when you not know the details about your order possibilities.
6 Ok.
7 If market goes up and you sell a put above the strike you buy a put, that is ok. It is also ok to sell the credit spread when your sold options get in the money.
By the way: How do you want to that? This you have to explain in details, as this is a key to not sit always in front of your laptop. If you fail with that, how much will you have to pay for your loss? Here we already come to point
eight, as this has to do with your MM.
8 Good ideas, but I not can see and detailed plan here. How much do you want to risk in numbers or in % and how has this to be done?
9 What ever you like here, as this is your personal choice.
10 Do some sport you can do every where. Why ? If you travel and you may not have a swimming pool or a fitness center, what you do ?
Dancing is nice. I had once a girl friend with a mother which was a dancing teacher. Salsa. rumba, tscha tscha, fox trot and how ever those dances was called, we did every thing. After that I went to a dancing school for rock,n roll. There you had to be fit, wow. Any way, we all get older and discipline calls in to make us doing some sport.
11 Keep going on and think positive. Go your way and if it gets rough, do not give up.
Some words from my side about your situation you are in now, as you explain it in the last post: Enjoying a full time job, which has nothing to do with trading and enjoying trading at the same moment needs special strategies and a psyche which can handle that. You may explain, what kind of time frame you want to trade to master this two things at the same time.
Another thing I may mention here: It is not the platform which has to recognize any strategy; it is you which has to have them in your head to trade them non independently. It is you, which make your trades powerful and not any ideas from any platform. I use such ideas to see, what others will trade, so I do some other stuff. I am clear, that this is a long way to ever come there and that is surely one of the more difficult levels you ever can reach by continuing your search and learning about the world of option strategies and how to trade them.
As always, ask and I will try to give some ideas and answers. Later on, I will continue with S&R, but we have time.
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
Summa, that is a huge post. I will go through it point by point.
1. Knowing how many legs are used for a strategy is not enough to trade them successfully. You have to know the options greeks to trade multiple leg strategies. The options greeks have little effect on a credit spread but can have a huge effect on a back spread.
2. Option express is a good tool to start to test and play with different option strategies. Option express was mentioned to me in 2005 in Singapore in a seminar about diagonal spreads on the S&P 500. As I do not trade options on stocks, only options on futures and futures, this tool did not take much effect on me. As far as I know, today they also give the possibility to trade options on some futures.
In Indian you not can trade options on commodity futures. You only can trade them on stocks and Nifty. Correct me, if I am wrong.
Probability is only math and does not include the reality, which can bang you heavily when hit at the wrong moment in the wrong trade. Do not start to think that you are in a safe harbor when using this tool. It is a good tool and I use it very often, but I do not count on it as the Holy Grail.
I am not clear what you mean with that: And also it helps in deciding what kind of repair I should do in my position if I enter into my LOSS zone.
Could you elaborate on that or give an idea, what it does give you? Does it say you have to take this and this position, what repairs are, or what does it say to you personally?
3 That is part of the option Greeks and is called VEGA. Vega has little effect on credit spreads and huge effect on back spreads. If you want to trade options, you have to know the option greeks like your trouser pockets. This is a must !!
4 Ok, but not ok.
5 Very important for position trading, as you will have to know what price you plan to pay for an option at a certain level under certain conditions. Minimum knowledge then is to know, how to place such orders and then we are back in point 4. You will not be able to trade your idea when you not know the details about your order possibilities.
6 Ok.
7 If market goes up and you sell a put above the strike you buy a put, that is ok. It is also ok to sell the credit spread when your sold options get in the money.
By the way: How do you want to that? This you have to explain in details, as this is a key to not sit always in front of your laptop. If you fail with that, how much will you have to pay for your loss? Here we already come to point
eight, as this has to do with your MM.
8 Good ideas, but I not can see and detailed plan here. How much do you want to risk in numbers or in % and how has this to be done?
9 What ever you like here, as this is your personal choice.
10 Do some sport you can do every where. Why ? If you travel and you may not have a swimming pool or a fitness center, what you do ?
Dancing is nice. I had once a girl friend with a mother which was a dancing teacher. Salsa. rumba, tscha tscha, fox trot and how ever those dances was called, we did every thing. After that I went to a dancing school for rock,n roll. There you had to be fit, wow. Any way, we all get older and discipline calls in to make us doing some sport.
11 Keep going on and think positive. Go your way and if it gets rough, do not give up.
Some words from my side about your situation you are in now, as you explain it in the last post: Enjoying a full time job, which has nothing to do with trading and enjoying trading at the same moment needs special strategies and a psyche which can handle that. You may explain, what kind of time frame you want to trade to master this two things at the same time.
Another thing I may mention here: It is not the platform which has to recognize any strategy; it is you which has to have them in your head to trade them non independently. It is you, which make your trades powerful and not any ideas from any platform. I use such ideas to see, what others will trade, so I do some other stuff. I am clear, that this is a long way to ever come there and that is surely one of the more difficult levels you ever can reach by continuing your search and learning about the world of option strategies and how to trade them.
As always, ask and I will try to give some ideas and answers. Later on, I will continue with S&R, but we have time.
Tc and do some sport to keep your buddy in healthy conditions.
DanPickUp
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