Hi Bart -- sorry about your recent unfortunate experiences
Some thoughts for you to consider:
When going long options, I never go out less than 3 months and preferably longer. It offers less leverage but also provides one some margin for error. In the meantime, I sell nearby options against my long positions when stocks get to resistance to recover premium. For example I am long calls--several months out-- in JBIL-60, TXN-140, PD-80, INTC-100, BAY-various. I sold November calls against JBIL-60 for 5, TXN-140 for 8, and PD 80 for 1 1/2. I have had limit orders to sell calls against INTC and BAY but they did not get executed. So I recovered part of my premium on some of my positions on these and I still have time--several months.
The only time I go long the nearby month is when I do what I call a "funny money" trade -- it is really gambling--I do it rarely but it is more to break up the monotony of a day. Did it with GTE--risked $2K and lost most of my money.
Money management is very important when trading. I posted to you on the options thread about this a while ago -- what we need to do is to make sure that we have the money to stay in the game.
On brokers and related problems, I use Schwab500 to trade and have never had a problem accessing them by phone--but I did not try yesterday. I personally feel that on a day like yesterday unless one is a very nimble trader it would be nuts to try and trade the market. I went out yesterday after the first hour or or so and never got back until well after the market closed.
On exiting losing positions, one needs to establish an exit point when one ENTERS a trade -- unless I am spread, I will exit an options position when I lose 50% of my investment. I am very much a rules kind of guy when trading--and I follow the rules without exception. It takes away the emotion when it comes to trading---letting ones emotions get to one is the bane of traders.
Also, it is not important what percentage of ones trades are winners vs losers--what is important is whether one is making money. Losing trades are part of the process of trading--it is not an ego thing at all.
Finally, I agree with Judy that you need to develop a trading style that you are comfortable with--AND stick to it. Some people are comfortable day trading in and out several times a day--I am not. Others are the buy and hold type -- other look for medium term trades. Which style one adopts is a function of personality, risk tolerance, etc. The shorter the time span that one trades the greater the need for a system -- otherwise you will make emotional decisions.
I have been active in the US markets for over 16 years--and have made every mistake that you can imagine. I still make my share of them -- but I am a lot better than I used to be. It takes time, patience, fortitude and above all the need to preserve ones capital. SI is a great forum for exchanging ideas and information--but I have found that when there is a lot of exuberance -- whether rational or irrational:)--it is time to reduce ones exposure. Believe me -- it works.
Hope this is of some help
My regards to you |
