12-14-2005, 10:25 AM
Hi all:
Here is one option trader's experience. I'd like to hear yours.
For a portion of my overall portfolio I trade options for "fast moving" stocks. I primarily do ATM calls with DELTA as close as possible to 50. Since 11/18/04 - 6/24/05 I am up 50% on limited $ for proof of concept . Not too bad, but I have been up 180%. I have had trouble identifying exit points vs market volatility. Enter DT.
I attended session in Ft Lauderdale in July. Been paper trading since then with market filters to identify trending vs oscillating markets. With latter, I stay on side line. When conditons are good, I search for trades in SB to SD rooms. With overall equity market very skittish, I want to stay on short time frames. I have used several iterations of methodology (after some discussion with Tom & Marcus). From that point of 11/8/05 I have taken 11 paper trades, not lost on 8 (73% winners) with average gain of +25% (including losses) with average hold of 4.4 days.
Because of above market conditions and from discussion with Marcus, I use RF of 14, stars of 4 in trade room, min RRR of 2; usual confirms in 2 higher room size, plus stronger RF there also. Lastly, I look for trigger to target =/> $2. Trading stops were taken with slow profile timing boxes versus "Stop Loss" or when stock price approached "Stop Loss".
Let me know what you think.
Here is one option trader's experience. I'd like to hear yours.
For a portion of my overall portfolio I trade options for "fast moving" stocks. I primarily do ATM calls with DELTA as close as possible to 50. Since 11/18/04 - 6/24/05 I am up 50% on limited $ for proof of concept . Not too bad, but I have been up 180%. I have had trouble identifying exit points vs market volatility. Enter DT.
I attended session in Ft Lauderdale in July. Been paper trading since then with market filters to identify trending vs oscillating markets. With latter, I stay on side line. When conditons are good, I search for trades in SB to SD rooms. With overall equity market very skittish, I want to stay on short time frames. I have used several iterations of methodology (after some discussion with Tom & Marcus). From that point of 11/8/05 I have taken 11 paper trades, not lost on 8 (73% winners) with average gain of +25% (including losses) with average hold of 4.4 days.
Because of above market conditions and from discussion with Marcus, I use RF of 14, stars of 4 in trade room, min RRR of 2; usual confirms in 2 higher room size, plus stronger RF there also. Lastly, I look for trigger to target =/> $2. Trading stops were taken with slow profile timing boxes versus "Stop Loss" or when stock price approached "Stop Loss".
Let me know what you think.