I’m still around…

I claimed a while back that I’ll be “revamping” this blog… and I really intended to do so… unfortunately, things cropped up… and my blog is still the same old one…

but I’m still around… and I’m still doing options trading… In fact, I just closed two Iron Condor positions these two days… made about 10% profit on each of them… was a bit upset, because they were doing perfectly well last week and I was close to 20% in profit… especially for Goldman Sachs… I sold the 140/145/180/185 Iron Condor for $125 each… yesterday I could have gotten it back at $24, but I was greedy and bid $20… never got filled.. today GS went up $4+, in the end, I gotta buy it back at $75 each…. but still, these results are significantly better than when I was BUYING options…. at least now I am consistently profitable… 🙂

I’m back…

Wow, I’ve not blogged for a long time… but that doesn’t mean I’ve given up trading…. on the contrary, I’m spending more time trading and less time surfing the net, blogging etc etc… In fact, I’ve also significantly reduced my tuition hours so that… well, I believe I reduced my work hours so that I can spend more time learning how to trade… but maybe I am just lazy… :-p

Anyway, I was pleasantly surprise to see that this blog still has readers… hmmm… must say a big thanks to those who stop by….

Here’s an update of what I’ve been doing since my disappearance from cyberspace… Like I mentioned in my previous post, I’m starting to sell options spreads… results have been ok so far…

I thought options selling would be almost ’emotionless’ for me, as I can sell with a buffer and do not need to decide when to close my positions, which was and IS STILL my greatest weakness. I always used to close my positions out of fear, for instance when the stock moved merely $1 away from me, or when I had only a small profit.

Options selling is definitely a lot easier for me, because I am mathematically trained, and I love the statistical advantage I get by selling. However, occasionally, I still managed to let my fear grip me and ended up losing a portion of my profits….Nonetheless, because the odds are strongly in my favor, I can still easily make money even with some wrong trades….

I’m also doing lots of research in forex trading… After programming numerous EAs, I’ve become increasingly disappointed with indicators-based systems… these systems tend to be less robust… highly dependent on market conditions and the parameters used….

Recently I’m exploring grid trading… like options selling, it’s mathematically based and thus clicks with me…. I’ve become convinced that trading should not be about predicting market direction… rather, it is just a statistical and psychological game…. after all, even the sage of ohama does not attempt to predict market direction… of course, that is my personal perception of the market… others may or may not agree with it… There is no need to argue if I’m right or wrong… what matters is just that it works for me… 🙂

Hope I can work out a statistically sound way to trade forex soon… will definitely update my ‘findings’ when that happens….

Good luck to all….

The Professional Gambler

I’ve not been blogging for a long time, but I’ve not stopped learning how to trade… not for a single moment….

I’ve been reading the book “The complete guide to options selling” and have been very attracted to the idea of options selling… The fact that 80% of all options expire worthless is not something new for me… I’ve heard of it years ago…. but somehow, it seems extremely appealling now…. maybe it’s because I know of someone who has been doing it successfully…. and more importantly, I recall that in the past, I always do better when selling options… vs buying options….

Pros of Options Selling

1) High Probability of Winning
2) No need to worry about closing the position
3) Only need to think of stop loss

My past weakness has always been my exit strategy… I always exit too soon, settling for a small profit, which at times, is not enough to cover my losses…..

Cons of Naked Options Selling (and how I plan to overcome them)

1) High margin requirements (Sell naked options only for stocks < $50)
2) Stocks tend to gap (never sell before earnings date/ sell spreads instead of naked options / sell options of ETF, which tends to gap less)
3) Limited Profit (but high probability)

Cons of Spread Selling

1) High commission (sell spreads only for stocks > $100, so that the credit received can be > $1)
2) Difficult to find suitable candidates (I guess if I am not solely dependent on options trading, this should be ok… a bit of profit is better than no profit)

So, in short, I’ve decided to change my options trading approach to a statistical approach… pretty much like a professional gambler, like the guy in “Bringing Down the House”….

TRADING IS A STATISTICAL AND PSYCHOLOGICAL GAME