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Investing Any options traders here?
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juice Offline
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Posts: 104
Joined: Dec 2012
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Post: #14
RE: Any options traders here?
(12-07-2012 09:53 PM)BIGINJAPAN Wrote:  
(12-07-2012 05:43 PM)RichieP Wrote:  You guys who are into trading,

What do you say to the idea that it's a fools game? I've heard people say it's no better than gambling, i.e. streaks of income over a few months arent true skill but just natural statistical variation, and in the long term you lose out? What do you guys in-the-know reckon?

There are obviously a LOT of products and info out there on it all ... does any of it work? So much of it feels similar to Internet Marketing products - e.g. selling the dream, telling you how to do something they havent done themselves. True or not?

I've heard it said that you're competing against massive investment banks /hedge funds employing hundreds of PhD's and even they are lucky to do better than 15% ROI in a year.

So how is it that the little guy can go up against them and make a living?

Well lucky for us real life experience shows time and time again that the scholars lose out constantly to traders. Why it works well for a retail trader is most of us cannot affect the market. These funds and banks park hundreds of millions or billions of dollars into companies. You simply cannot hide that kind of money. But being a small retail guy you can quickly move in and out of stocks or options without really anyone noticing. Although in some low volume option plays even a small trader can be detected.

But again the big guys cannot simply just hit sell when they want to liquidate their position. It make take them weeks if not months to unload. Which is what is happening with Apple right now. Plus the big banks and hedgefunds have acces to huge margin. If a trade goes bad on them they have to liquidate because they are getting calls to return the money they borrowed. Where as a small guy like me in my RRSP acount I have no margin and use all cash and in my portfolio account it is all based on brokerage algorithms and positions held and cash on the side. But generally my margin account won't go higher than 10 to 1. Those IB's and HFs push it north of 30 to 1. So when a stock drops more than 3 percent they have to get out. I don't have those issues, I can hold positions longer and a lot of times I am correct and I just needed a little more time.

The other thing that comes into play is I use a disciplined set of rules I follow. I can stick with my system because I am not a market mover and my decisions will not cause a panic. Where as big banks can't follow set rules due to the size of their books. Also the algorithms they use and designed by the egg heads only work for so long. Then human emotion over takes the market and due to their massive size of leverage a years gains can be wiped out in days or weeks.

I personally think almost any system will work as long as you stick to the rules of it. The 2 keys are cut your losses around 8-10% and let your winners run. Sticking as close to those 2 and you really only need to be right 33% of the time to make money. Problem with most retail investors is they make stupid mistakes due to emotion. Also I think alot of retailers don't actually know what they are doing. When I read the tweets coming out on stocktwits most of the people don't have a clue what they are talking about. Every other sentence starts with " I hope ".

I couldn't have said it any better myself

Blog: Options Trading
12-08-2012 12:32 AM
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Messages In This Thread
Any options traders here? - juice - 12-06-2012, 08:05 PM
RE: Any options traders here? - defguy - 12-06-2012, 09:03 PM
RE: Any options traders here? - juice - 12-07-2012, 02:13 AM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 02:44 AM
RE: Any options traders here? - juice - 12-07-2012, 12:55 PM
RE: Any options traders here? - HiFlo - 12-06-2012, 10:30 PM
RE: Any options traders here? - juice - 12-07-2012, 02:14 AM
RE: Any options traders here? - Spike - 12-07-2012, 04:06 AM
RE: Any options traders here? - juice - 12-07-2012, 12:56 PM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 02:45 PM
RE: Any options traders here? - RichieP - 12-07-2012, 05:43 PM
RE: Any options traders here? - BIGINJAPAN - 12-07-2012, 09:53 PM
RE: Any options traders here? - juice - 12-08-2012 12:32 AM
RE: Any options traders here? - RichieP - 12-08-2012, 02:26 AM
RE: Any options traders here? - bhawthorne - 12-08-2012, 11:59 AM
RE: Any options traders here? - juice - 12-09-2012, 04:41 PM
RE: Any options traders here? - sheesh - 12-09-2012, 09:21 AM
RE: Any options traders here? - Seadog - 12-12-2012, 04:59 AM
RE: Any options traders here? - BIGINJAPAN - 12-09-2012, 01:42 PM
RE: Any options traders here? - juice - 12-09-2012, 04:43 PM
RE: Any options traders here? - defguy - 12-10-2012, 12:05 PM
RE: Any options traders here? - bhawthorne - 12-11-2012, 08:39 AM
RE: Any options traders here? - sheesh - 12-12-2012, 05:37 AM
RE: Any options traders here? - BIGINJAPAN - 12-12-2012, 12:04 PM
RE: Any options traders here? - juice - 12-12-2012, 11:38 PM
RE: Any options traders here? - BIGINJAPAN - 12-13-2012, 12:16 AM
RE: Any options traders here? - Rocket13 - 12-13-2012, 12:20 AM
RE: Any options traders here? - BIGINJAPAN - 12-13-2012, 12:38 PM
RE: Any options traders here? - sheesh - 12-13-2012, 08:30 AM
RE: Any options traders here? - ElJefe - 12-14-2012, 06:30 AM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 01:21 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 02:46 PM
RE: Any options traders here? - juice - 12-20-2012, 12:19 PM
RE: Any options traders here? - bhawthorne - 12-20-2012, 01:05 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 04:05 PM
RE: Any options traders here? - BIGINJAPAN - 12-14-2012, 04:06 PM
RE: Any options traders here? - defguy - 12-22-2012, 02:38 PM
RE: Any options traders here? - Sleazy - 10-12-2018, 04:59 PM
RE: Any options traders here? - Sleazy - 10-12-2018, 05:09 PM
RE: Any options traders here? - Cortés - 10-12-2018, 05:07 PM
RE: Any options traders here? - tomtud - 10-12-2018, 06:01 PM
RE: Any options traders here? - tomtud - 10-16-2018, 07:14 AM
RE: Any options traders here? - Sleazy - 11-12-2018, 05:04 PM
RE: Any options traders here? - Sleazy - 11-13-2018, 05:21 PM
RE: Any options traders here? - Sleazy - 11-19-2018, 08:38 PM
RE: Any options traders here? - Bacchus - 11-20-2018, 12:04 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 10:04 AM
RE: Any options traders here? - Captain Gh - 11-20-2018, 01:06 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 10:08 AM
RE: Any options traders here? - Captain Gh - 11-20-2018, 11:04 AM
RE: Any options traders here? - Sleazy - 11-20-2018, 11:31 AM
RE: Any options traders here? - tomtud - 11-20-2018, 02:47 PM
RE: Any options traders here? - tomtud - 11-20-2018, 04:40 PM

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