How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Tim Russell who wrote (754)	3/13/1997 8:51:00 PM
From: Herman J. Matos	of 14162

Tim, Call me Herm. I'm not President of the United States. :-) Paper trading is at best a "two dimensional" simulation. Yes, you use a method or strategy and you see some kind of outcome! But, you are missing the third and most important characteristic of trading.......... FEAR and GREED! The fear and that empty feeling in the pit of your stomach as you watch your money go down, up, and sideways while you are learning the ropes! No simulated paper trading will ever predict what you would or would not have done! When it's real money you tend to doubt your judgement because you are a novice. We all start as novice. I can remember how my voice cracked as I gave my firt buy orders to my broker and realized that I was moving $6,000 of real money to buy call options for a bout of daytrading options. Lucky for me, that week I made $2,500 and I was hooked! Unfortuneately, the following week I was $500 in the hole! Yeap, I loss all my profit and then some on other trades! Here is my point! If I gave up that following week because I loss the whole thing and did not learn from it, I NEVER WOULD HAVE LEARNED TO NOT MAKE THE SAME MISTAKES. And of course, over time my winning average increased until I now have more wins than losses. You must learn to accept occasional losses, keep them small, and keep moving further up the learning curve! Go ahead and paper trade until you are really ready mentally.

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