The Big secret to trading success

but just like the kids dot to dot ,we can do pip to pip ,

All of that without the use of Dinosaurs n Pokemon?

How is this even possible?

Very nice work, Dice!

is it you Daddybear? http://www.forexfactory.com/daddybear

I have been around and dropped in for a moment... and what have I seen?

I have seen you are both (Atokys included) having fun here, guys.
I am staying...

Best
D.P.

Trading is everything and it's contrary.
Fun and boring.
Difficult and easy.
Possible and impossible.
Illusion and truth.
Happiness and disappointment .




Every day is different.

Absolutly true, trading is to solve the paradoxes.

Maybe instead of "solving" these paradoxes, a trader should "live and breath" them with a "Zen Buddhist" acceptance...

When you dance with the market, the market always leads.

yep.. and if you don't like it... the market will chew you up.

Haha so you are really a Master, good one.

​ON THE SUBJECT OF WRITING OPTIONS: In the book Sell and Sell Short, author Dr. Alexander Elder writes a chapter about non-equities. He claims that the only way to win at options (over the long term) is by writing them, not by buying them.

EXCERPT:
I am doing lots of boring options trades. It's so simple, I could teach my granddaughter to do it. I said to her -- you go to an art high school, you can recognize lines. I can show you -- when those lines stop going down, it is time to sell a put. ...

I like taking money in and do not like paying it out. Happiness is selling an option that expires worthless. I had taken my Schedule D to several accountants who said there was a problem with it; buy prices were missing. I had to explain to them that I had sold options and they expired worthless. ... I love naked selling. The problem with covered selling is that to make money on an option you have to lose some on a stock, and I don't like that. I look for stocks that I would like to own which are declining. When they stop going down I sell their puts and collect a 10% premium. ... I feel like a dealer in a casino, making money off the players' egos. Those flashy guys keep coming in, wearing gold chains. They throw hundreds of dollars on my table for some plastic yellow chips. The wheel keeps spinning and they have fun, but on the third Friday of the month the wheel stops, and that's when I collect. I try not to smile too much, not to show them how happy I am to have their business. ... I am a professional psychologist, but the insurance company pays the same rate whether I give a patient good advice or not. Trading is the only business where you get paid in proportion to how smart you are. But you have to work hard. People keep asking me to teach them to write options. I give them a few stocks to follow and tell them to keep a daily list of their prices, along with several options prices. Not one person who came to me could keep that list up for a month. Lazy. ...

A stock can go up, down or sideways. If you buy a stock on an option, you have one way to make money and two ways to lose. When I sell an option, I have two ways to make money, and sometimes even three. The time to sell an option is when a stock stops moving, and the sharper its move has been, the more they will pay you for the option. ... ...People ask me all the time, "if selling options is so great, how come more people don't do it?" I think it's because most options traders like to gamble. They look for tips, but have little patience to play options like chess. Buying options takes little money (about 10% of the stock price), but selling them takes considerable cash. Most brokerage houses won't let you sell puts unless you have at least $100,000; some require $250,000 and two years' experience. Brokerage houses say they are trying to protect you, but they let you buy options which have a high probability of losing money; they won't let you sell options, which have a much lower probability of losing money. ... If you sell a put, the worst thing that can happen is that you will buy a stock at a predetermined price. How awful is that? Don't millions of investors and traders do exactly that every day? So I just sell puts on stocks that I would buy anyway, at a price that I would gladly pay. The only difference is that I get to make the profit without putting my capital into the market. I actually have it in secure bonds, earning interest. And what is the worst thing that can happen if you sell a naked call? You end up with a short position on a volatile stock. Isn't that exactly what many professional traders do anyway? I love options because I get my profit up-front. And "the worst thing that can happen" is just fine with me. ...

-- An interview with Dr. Diane Buffalin, in the book "Sell and Sell Short" by Dr. Alexander Elder, pp. 255-258.

Good information about option writing.

I would make one change though. He recommends writing "naked" options but if you do the math the ROI is better by selling spreads rather than selling "naked" and requires a smaller account size. Even if you need to double the quantity with spreads to collect the same amount of premium as selling "naked" options, your margin requirements are greatly reduced because you have limited your losses.

He talks about selling puts on stocks he likes but sometimes a company can "appear" to be good then it blows up. A recent example would be VRX. At one time this was viewed as a very good company & now some are talking possible bankruptcy. Look at all the oil exploration companies that were "good companies" not too long ago. All it takes is one "bad apple" in your portfolio of options sales to ruin your performance since selling options is usually collecting "nickels & dimes" but no potential for a big winner so it's crucial you avoid the big losses. As long as you don't get an "overnight" news event & have good discipline to get out when you're wrong then it's less of a risk to sell "naked" options. If you also have a stock portfolio then put selling can be a way of buying the stock @ a lower price so then you're not as concerned about the risk of a big drop.

Smoke and Mirrors, order or chaos, the past and the future, up and down, long or short.
Slow day today, it's hissing down and windy. Now, I know a lot of people say that you cannot trade the past, and that is true, but I am a believer that the future is written in the past. Every chart you look at is the past, but it influences the decisions that you make regarding the future.
It all depends on what you look at and what your looking for.
Here's an example of what I look at and how I use history to trade the future.
On the 27th April the GBPJPY had a low of 161.622 (the first chart). With the events that followed (Policy statement) it threw the market into disorder. The markets like order. Think of it as a kind of diversion. Any time this happens the market tries to rectify the problem within certain cycles. This move down was so severe that it took the market 16 days to correct. See second chart. On 19th May it made a high of 161.627. As you can see I was waiting for it.

I would agree with that in the main. If I messed with options now I would buy DIM options to maximize my capital. That would be about it.

Sorry for my confusion, are you saying that sometime after 27/4 you started buying G/J with target 161.62 or that you waited with a sell at 161.62? If former, how did you determine when to start buying?

Been doing analysis of my trades past 3 months. Checking every 100 pips on chart and trading 4h, 1d and 1w chart set it and leave it total profit demo from 10.000 to 400.000. Trading all systems from this forum and everything below 4h chart total loss of demo account and cant get it right. from 10.000 to 20 in 1 week every time.

blunderbuss thanks for a very solid post on options, to be honest I've been trading options for a while now but never sold put options. ))) Thanks for a heads up!

only downside to writing uncovered puts is this obviously:

Unlimited downside risk with little downside protection
While the premium collected can cushion a slight drop in the underlying price, loss resulting from a catastrophic drop in the price of the underlying can be huge.
The formula for calculating loss is given below:

1. Maximum Loss = Unlimited
2. Loss Occurs When Price of Underlying < Strike Price of Short Put – Premium Received
3. Loss = Strike Price of Short Put – Price of Underlying – Premium received + Commissions Paid

nice analogy option selling vs buying

Suppose that you and I went down to a fishing hole filled with catfish
and bass. We toss a fishing line in the water. The hole is primarily a
catfish haven, with 80 percent catfish and 20 percent bass. I offer to
pay you $1 for every bass you pull up, whereas you must pay me $1
for every catfish you pull up. There are even a few trophy bass in the
hole that, based on their weight, I will pay you $2 or $3 or even $4 for
hauling in.

However, these are very few and far between, and I am
more than willing to take $1 for each catfish while you try and catch a
trophy. Chances are that you will pull up eight catfish and two bass.
You’ll pay me $8, and I’ll give you $2 back for your bass. I will end up
netting a hefty $6 profit. You soon realize the error of your ways, and
we decide to go into business with our little fishing hole.

Soon many novice anglers hear about the trophy bass in the fishing
hole, paying high prizes for anglers lucky enough to catch one.
They are especially interested in the highly touted “monster” bass,
one of which lurks in the dark water below and pays a prize of $10 to
the angler who hooks it.

The anglers line up at our hole to pay us $1 for every catfish they
catch. We generally have to pay them $2 out of every $8 they pay us.
Sometimes we only have to pay back $1. Sometimes, if somebody has
a “hot streak,” we may have to pay back $3 or $4. However, we almost
always come out ahead at the end of the day.
Furthermore, we don’t require them to cast 10 times. Some may
come with only a few dollars and take a few casts. Some will fish all
day. Most fish until they run out of money.

Occasionally, someone will catch a trophy bass. In this case, we
have to pay back $3 or $4 against our $1 bet. The trophy bass causes
much excitement. The newspaper comes and snaps pictures. More
novice anglers and some people who have never fished before see the
picture in the paper, get very excited, and stuff their pockets with
dollars and come running down to our hole to pursue the elusive
trophy fish.

This brings us even more business and makes us happy,
for alas, most of them catch catfish and put dollars in our pocket.
Pretty soon a few savvy anglers catch on to our game and decide
to stop handing us dollars. They set up their own little stand on the
fishing hole and begin collecting dollars for catfish. Fortunately, there
are many new anglers coming to the hole now, trying to “hit it big”
with a trophy bass. Many get frustrated with catching catfish and
losing their money and come to the conclusion that “fishing is bad.”
They quit altogether. However, many new, young hopefuls appear to
take their place.

Soon another group of entrepreneurs springs up. Their purpose
is to take the anglers’ money and give it to us and take any money we
owe the anglers and give it to them. Some will even help you bait
your hook and tell you where to throw your line. For this, they
charge a fee. This now means that the anglers and you and I have to
pay a fee on each fish that is caught, catfish or bass.
Most of these “middlemen” like to talk about the big bass and get anglers excited
about the “monster” bass that lurks below. “Of course, you could
lose your dollars,” they warn, “but think of the payoff if you catch
the monster!” This gets anglers even more excited. Some take a
middleman’s advice and cast to the spot to which he points. This, of
course, costs the angler a slightly higher fee, for the middleman must
spend more time with her. The angler, of course, still catches mostly
catfish.

Others anglers study the fishing hole for hours and look at depth
charts at home to see where the giant fish may make its lair. Then they
come to the hole with sophisticated computers and top-of-the-line
fishing gear. Most fare little better than their non-sophisticated counterparts.
The reason is that they are fighting a losing battle. Even
though the large bass are swimming in the hole, the hole is still 80
percent catfish, and the $1 the anglers must pay for each catfish eventually
is going to exhaust their money supply, even if they catch a few
bass along the way.

While most of the middlemen do sincerely hope that the anglers
catch a big bass and try their hardest to help them to do so, they, along
with their angler clients, fail to realize that the person making all the
money is the one betting on catfish. Certainly, it lacks the glamour
and excitement of pursuing a “monster” bass and the big prize it
brings with it. However, for making money at the end of the day, it is
devastatingly effective.

A few of these middlemen become wise to the catfish betting
strategy and encourage their clients to begin betting on the catfish
because there are many anglers willing to take a chance on catching a
big bass. However, most shudder at the thought. “Bet on the catfish?”
they ask incredulously. “Why would you want to do that? It’s too
risky. What if somebody pulls up that monster bass? What will you
do then? You bet $1 and you lost $10.

That could wipe you out! You may even have to run home and get more money
so that you can pay that angler the $10 you owe him. Is that what you want?”
“No, no” the ambitious angler fearfully replies. And so they go
back to trying to catch the “monster” bass, and eventually the angler
runs out of money

So you advocate scuba diving with a speargun to see the bass and only bring them up?