Hi mish,
How do I handle ramps? Not very well, sometimes. <g> I try very hard to keep my eye on the big picture, on my sense of what's happening on a weekly, rather than a daily, basis. It helps. And when I play it short (with puts), I buy half positions so if we get ramped, I can add a few points lower.
The fact is that it's scary trading this market, even short, these days. Allan's Alias has a saying, that he wants to simply take a bite out of the middle of each move. I like that sentiment. If I can make 1k on an option trade in the course of a day, I'll take it. The volatility is so high that chances are you can take your profit and set up another limit buy order and be filled at the same price you originally bought, all within the same day or two.
Don't get down on yourself for not having every trade go well. I believe that the sign of a good trader, one who will last through lots of markets, is one who learns to take small bites under every condition. Home runs are for baseball stars. We're options traders in a brutal market.. |
