An Introduction to My Current Trading Style
Hello Steemians,
I know I've posted that I trade on at least @lukestokes feed more than once. Go read is post today of "Do Cryptocurrency Speculators Fear Utility?." On @sethlinson 's feed, I'm sure to have also mentioned investing some.
NOTE 1: Nothing I say here is investment advice. You could loose a lot of money following anyone.
NOTE 2: Go learn from tastytrade(the AV feed)and tastyworks(the trading platform). This is where I study and trade when I can.
NOTE 3: Starting with Step Up To Options is great even if it is the older UI.
NOTE 4: I don't make any money from them, they make a small amount on my commissions. You should see how small.
NOTE 5: I'll answer questions about my style and how I evaluate things, but it still isn't advice to you in buying or selling. :)
How I Learn
So of all the things one looks for in trading, several items are the same in all markets. I'll look at writing up this list a larger article later. (Or watch 10 Reasons to be a tastytrader in reverse order.)
- Liquidity: there needs to be a whole lot of trading going on.
- Trade Small, Trade Often. You want to trade so many times that you approximate your model's percent chance of winning. (Experiment: Roll a d8 or get a DND buddy to do it for you, once, 10 times and 100 times and mark down how many 1's you roll in each batch. The bigger the batch the closer to your win/loss model you'll get). If you risking
- Probabilities Never Lie: you just need a large enough sample set and it'll work out.
The above list are ones that could apply to crypto as well as options. For the full list of items and to see how more of them could apply to the crypto space, go watch all the videos (10 on that list).
Currently, I'm mostly only trading options on the indexes like S&P500 (in ticker SPY), Russell 2000 mid-cap (IWM), Nasdaq (QQQ), with an occasional single-stock option trade.
How I Add Value
Everyone should have some bit of assumption in the markets. While I think the current US President is nominally better than the last. I think the party change is better than not. This gives me a bullish bias. I'm pretty sure we've seen a large amount of it already go.
As interest rates rise, I think more international money will come into the US market. (Another US Bullish point)
How Now...
Given I think we're in a bull market and knowing out to earn money in options just by waiting, I buy the dips. I buy them with a short put spread or short put vertical.
I only want to make 1/2 of the Max Profit and then redeploy my capital ASAP, that's rolling the dice again.
What's it got me?
I'm up only 21.4% YTD with having taken most of August off trading.
When I can find good liquidity in trading on the cryptos I'll consider it for more of trading, until then it is where I invest long-term and am looking for the post ICO "crash" to get in and the take the slow ride up until a 2nd wave might spike it.
However, I'll plug @lukestokes post once more because I'm really more a value investor in crypto... "Do Cryptocurrency Speculators Fear Utility?" Read it; it's good stuff Maynard.
I'd be curious how your non-crypto investing is working out this year. What trading styles do you use? Do you have any good trading styles in crypto?
its too late for my upvote to make any difference but i liked your post and followed you. My main interest is the fiancial circles which is a pretty small niche here. I too like trading options but prefer to be a long term investor in cryptos . Only for a year so far but its a nice new "non correlated" asset class that has quickly added up to money. But I still dont put anything like money into this space yet.
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Hi @whitesj40, I'll start writing up a post for the week just after market close.
I think I had a trade earlier this week but I had several today.
Yes, I'm hoping we can get a bit more discussion on trading here too.
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for the record of this conversation i use Puts and Calls in the one to two month range. i sell options only. the calls are because every now and then i end up owning the stocks. I used to follow the advice of an investment group called Palm Beach letters. In truth i have to give them the credit for teaching me the system but they were well paid to do so. I no longer use them but only invest in stocks of companies that I am accumulating for a long term (for ever) dividend portfolio. So if i hit the strike price, i end up buying something that I wanted anyway and was paid to get in at a cheaper price than i expected. I turn around usually and offer calls at the same price and collect the dividends while i wait. This has been by far the best strategy for me.
I will use weeklies where they exist and have even used minis. I just try to avoid selling options within 2 weeks of earnings announcements.
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I posted an update of my portfolio. Let's continue the discussion there and see if we can get a few others to join us.
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@gregvence, thank you for supporting @steemitboard as a witness.
You can click on your award to jump to your Board of Honor
Once again, thanks for your support!
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Interesting - thanks for posting!
I have been selling put options (as credit spreads) for about four years now. Initially on individual stocks, and still many individual stocks, but moving also into indices.
I prefer it to buying because I don't have time to trade and this way I can just sell, wait, recycle each month
I have to admit to being astonished at how simple it seems to be. I have got caught a few times when stocks have taken a big dip, but even then it has been relatively simple to roll out and down over a few months to realize the gain.
I initially thought about regularly posting trades here, but I don't think the interest level is that high
Cheers
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Going to expiration is a profitable strategy. I've found just a bit more profit from buying back at 50% of the initial credit and then looking for another position to put on.
How far out do you start your position? I used to do 45 to 40 days. Now I do 65 to 45. I still do just monthly options. Do you do weekly?
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Oh, no doubt that there are more profitable ways to do things, but I love selling as it involves just a couple of hours per month and I can sleep easy.
I sell monthly and have found that ~80% of the time they close worthless and I sell the next batch, the other ~20% I roll them out and/or down. I can be less conservative and increase the 80% towards 90+, but I have so far never had an issue rolling out - it has occasionally taken a few months ( I wrote a post on it - Disney) but we always get there in the end
Thanks for the reply!!
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I agree. Since my trading is in a US IRA, I have to used defined risk trades, so I sell a put spread instead of a put.
When do you look to roll? I usually do it between 10 and 7 days out? Since I use an GTC Limit exit at 50% I'm not looking for worthless. How much of a buffer Out of the Money (OTM) do you look for when rolling as the price can still wobble a bit toward expiration?
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If I need to roll I will normally wait until a few days out. I don't like to wait till expiration day
I always sell spreads now
Cheers
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I posted from this week's trades. Please lend an idea on the IWM call position over there if you would?
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This doesn't really seem to be aimed at starting up a #discussion.
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Hi Tim! You could be correct, don't know until we ask folks to talk and see who joins.
I'm just getting into writing about stuff, so I'm sure my style is a bit rough.
Do you trade?
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Yes, a little bit. I mostly look for quality projects that I think have good long-term potential.
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So I'm guessing crypto? Do you tend to buy and hold right from the ICO? or what face you found for entry and/exit?
Thanks for engaging. I'm looking forward to learning about crypto.
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Well I have a 401k with more 'traditional' investments, but that isn't really "trading". As far as actively trading, I generally avoid ICOs, although I did buy in to PPY since I think it is a really cool project. I generally buy tokens that can be found on Bittrex.
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My rollover IRA is at tastyworks and is where I do most of my trading. This style of trading has saved my bacon for retirement from the horrible 2008 "regular" trades.
Is like to have a regular option account it can be much more flexible.
Know any good crypto exchange articles here on Steem? Google doesn't seem to recommend Steem articles well.
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Sorry, I don't actually.
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That's ok, I'll keep searching.
BTW, I added you to my witness list. :) Thanks for interacting. :) I like your profile page being a Steemit post. I'll make use of that idea.
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Thanks!
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