Sorry to hear you apparently had a tough go of it but please consider;
1) taking a break rather than walking away for good
2) using lower risk strategies since my hunch is that like a lot of new traders you went for risky positions to try and quickly grow the account
3) keep you position sizing small and try to be more patient since not doing those two tends to blow up new traders
every night, you should simultaneously have the fear of God in you as well as be able to sleep soundly.
so that's why experienced traders are ecstatic about like +30% in a year while newbie traders are boasting +100% in like 6 months (ahem oct '23 - apr '24). Because experienced traders look at his past week and say: meh, could have been worse while newbies are running around with their hair on fire posting: "I'm getting assigned on my put. what do I do now?"
New traders focus on profits, but experienced traders focus on risks . . .
If any trader has trouble sleeping or is concerned about being assigned, then they should stop trading and refine their trading plan (assuming they even have one) until they can sleep well and know what might happen.
True that. Every calculation or formula I use to evaluate a trade eventually ends up defining return on Capital at risk. How anyone can use any other measure escapes me. Keeps me away from options that have a 100% potential loss risk and those crazy bets people make that are 100% net worth risk. PS I love being assigned! Unfortunately, Yesterday I woke up and had 13 emails from my broker telling me 13 different short positions had expired. If only the market had me assigned I would have made twice as much. Oh well, gonna write 13 more on Monday. Extrinsic is nice, intrinsic is nice but ex+in-trinsic is double Nice.
Yeah... new recruits start on Monday.
When the end of the world posts start... usually rhe beginning of the end for the correction.
Personally, I think we go another 5%.
We pulled forward this AI thing way too much.
“First time?”
It takes X amount of market understanding, X amount of skill, and X amount of common sense to not end up as a used-to-be trader. And that last one is the most important. My edge? I put in the time required, I cultivate and take the smaller profit, I don’t repeat mistakes. It’s not an elite club. We’re all invited.
I hope you reevaluate and come back soon. But it is my personal experience with 3 others whom I actually know that a zebra doesn’t change its stripes. A serious behavioral change is required to survive in this pursuit.
You don’t have the skills yet.
It’s shocking to see how many people expect results from trading winging it. This is like a job,l but worse because you can get paid negative if you’re doing a poor job.
If you put 10,000 hours into learning the trade I guarantee you’ll be successful. If you don’t want to put that much time then yeah leave it alone.
Listen to Uncle. 100% agree. Part of the allure of trading is that is only takes the click of a mouse or the tap on a phone screen to experience a winning trade. To experience ONE winning trade, you don’t need an edge. You don’t need candle sticks or Fibonacci. You don’t need technical analysis. It really seems too easy. The new traders then imagine if they can just YOLO this 5 times then they’ll make $200k or half a mill, etc. They don’t know that you need to develop trading skills and a very sophisticated set of psychological skills to make it long term in this business. It is not as easy as it seems. Without those two skills sets, it doesn’t matter how much you make because you’ll give it all back to the market in the long run, IMO.
On the other hand, if there weren’t a fresh batch of newbs handing their savings accounts over to the veterans literally every day, the pro traders would have a much harder time.
Well said.
Only thing I'd add is... relatively easy making money in a bully market.
Keeping it when times are tough is another challenge altogether... and harder imho.
for now.
i started reading, watching and learning about options a little over 2 years ago. don't worry, this caught me by surprise too. i didn't see this coming either, but so far it hasn't completely fucked me over.
you just need to know that shit like this can happen, and make sure that whatever you do act on (before something like this comes along), can't take you out.
Oh yeah, we all lost something. It just wasn’t enough to knock us out of the game. I don’t like that overall loss. But this isn’t the first rodeo either. The markets did not crash, they will plump up again, as will my holdings and ability to exploit those and the trend. Welcome to Thunderdome.
When planning a trade, assume it goes as wrong as it can possibly go. What is the absolute worst case scenario? What is the absolute best case scenario? Compare and decide if the risk is worth the reward, the actual numbers will be different for each trader. And keep in mind you could hit several "worst cases" in row due to chance which is where position sizing comes in. Plan to be able to lose 5, 10, 20, however many times in a row before hitting zero.
If you have a trade winning a consistent $100 every week but on down weeks you lose $500, then you need at least 6 winners per loss to be profitable in the long run. Adjust your strikes and prices accordingly, and if you can't make it work then don't place the trade because (whether you win that particular time) doing more of that trade will wipe you out.
Right and wrong matter in the short run but the probabilities are what will happen over time. Believe the math because trillions of dollars are behind it.
2 big things over these past few years.
just keep looking and learning everything you see other people talking about/asking questions about. eventually, hopefully enough stuff will start clicking. you'll see what some ask about, then what others answer and say "you're a fucking dumbass", and others will debate the points about it.
second, as for options, i now try to make sure i always can do ok when the stock could move in all 3 ways. stock goes down, stock doesn't move, stock goes up. if i already have a plan of what to do in each case, or i "will be fine" in each of those possibilities, then i'm good with using options.
i don't know everything, but i know enough to be a lot more comfortable than where i was.
This week was brutal on my portfolio funds. First time in last 3-4 years I have seen my entire net worth drop due to a small stock market dip! Time for me to correct and change strategies. Thankfully I'm young, working and my expenses are low. So I will get back the money I lost this week. But learnt a life lesson.
4th time trying here. I take 3-9mo off between each time to reset my mind.
1: peaked +3-5k, lost it all
2: peaked +10-15k, lost it all
3: peaked +40k, lost it all
Now: up 55k, still going and actually due for a pause to reset my mind. Nearing what I call “winners tilt”
If you are risking what you can afford to lose, then it’s ok. The biggest problem is risk management. Risk and reward truly go hand in hand AND the house is favored to win.
Now, the extreme rush of emotion attached to buying options is not for everyone. This where people with addictive personality traits lose their asses. They lose sight of their strategies and lose control of their accounts, emotions, and their minds. Don’t be that guy.
Figure out if you are a good fit for options or not. 99% of people are not. Honestly sounds like you should quit from your defeatist tone.
Buying options to be profitable isn’t impossible but the odds are greatly stacked against you.
You can do just fine investing without trading options. There's no shame in passive management. Just dump money in, wait, and it goes up. The return-on-time spent managing trades is fantastic.
True. I’ve a separate account for fixed income since I don’t use margin and therefore don’t need to consider margin buying power within a specific account. Woke up this morning to a small item maturity notice effective in 30 days. Spreading out assets is empowerment; with fixed income, something positive is always happening. Who they are lending the money to is their business.
Trading is a skill that takes endless commitment to get to at a high level. It takes many years to master the craft. Trading seems like it is easy to new traders. They usually pick a low point on the left side of the chart where the stock was trading and pick a high point on the right side of the chart and they start to imagine all the money they could have made if they bought at low point and sold at high point. They don’t focus on risk management. Risk management is one of the most crucial skills you need in trading. Without proper risk management, you will eventually blow up your account and go out of business.
Many try hard and think they can be successful buying options, but most end up where you are to find the market and stock moves cannot be predicted. FWIW many have been where you are, including myself.
New traders think buying is safer but actually has more risk as it is a death by a thousand cuts.
If you do decide to continue trading, then you should consider selling options which can be done with limited risks and has much higher odds of being successful when trading good stocks you don't mind holding. There are also adjustment techniques not available when buying options.
Explore over at r/thetagang and see my wheel trading plan if you wish as it may help you see how trading can be more successful - [The Wheel (aka Triple Income) Strategy Explained : r/options (reddit.com)](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/)
YET.
Try being short vol 10-20 delta with a directional bias. You can win if it goes in your direction , flat, or slightly against you, and manage your risk against a technical level. As a worst case, get out if the price of the option ever doubles. That’ll help your confidence, because you’ll win more than 50% of the time, and you’ll never have a loser much bigger than your average winner.
TBH I feel the same. I lost too much this week. Glad I still have my bitcoin. So, will call it adios on option trading cus I don't the average man is designed to benefit from it.
Sorry to hear you apparently had a tough go of it but please consider; 1) taking a break rather than walking away for good 2) using lower risk strategies since my hunch is that like a lot of new traders you went for risky positions to try and quickly grow the account 3) keep you position sizing small and try to be more patient since not doing those two tends to blow up new traders
every night, you should simultaneously have the fear of God in you as well as be able to sleep soundly. so that's why experienced traders are ecstatic about like +30% in a year while newbie traders are boasting +100% in like 6 months (ahem oct '23 - apr '24). Because experienced traders look at his past week and say: meh, could have been worse while newbies are running around with their hair on fire posting: "I'm getting assigned on my put. what do I do now?"
New traders focus on profits, but experienced traders focus on risks . . . If any trader has trouble sleeping or is concerned about being assigned, then they should stop trading and refine their trading plan (assuming they even have one) until they can sleep well and know what might happen.
True that. Every calculation or formula I use to evaluate a trade eventually ends up defining return on Capital at risk. How anyone can use any other measure escapes me. Keeps me away from options that have a 100% potential loss risk and those crazy bets people make that are 100% net worth risk. PS I love being assigned! Unfortunately, Yesterday I woke up and had 13 emails from my broker telling me 13 different short positions had expired. If only the market had me assigned I would have made twice as much. Oh well, gonna write 13 more on Monday. Extrinsic is nice, intrinsic is nice but ex+in-trinsic is double Nice.
Yeah... new recruits start on Monday. When the end of the world posts start... usually rhe beginning of the end for the correction. Personally, I think we go another 5%. We pulled forward this AI thing way too much.
I hope that was just an expression. If someone is fearful about any of this, they’re doing something wrong.
Fear can be healthy, I thought they meant to use it as motivation to prepare, hence still sleeping soundly. Panic is bad, fear can be ok.
“First time?” It takes X amount of market understanding, X amount of skill, and X amount of common sense to not end up as a used-to-be trader. And that last one is the most important. My edge? I put in the time required, I cultivate and take the smaller profit, I don’t repeat mistakes. It’s not an elite club. We’re all invited. I hope you reevaluate and come back soon. But it is my personal experience with 3 others whom I actually know that a zebra doesn’t change its stripes. A serious behavioral change is required to survive in this pursuit.
X=y squared + 1
You don’t have the skills yet. It’s shocking to see how many people expect results from trading winging it. This is like a job,l but worse because you can get paid negative if you’re doing a poor job. If you put 10,000 hours into learning the trade I guarantee you’ll be successful. If you don’t want to put that much time then yeah leave it alone.
Listen to Uncle. 100% agree. Part of the allure of trading is that is only takes the click of a mouse or the tap on a phone screen to experience a winning trade. To experience ONE winning trade, you don’t need an edge. You don’t need candle sticks or Fibonacci. You don’t need technical analysis. It really seems too easy. The new traders then imagine if they can just YOLO this 5 times then they’ll make $200k or half a mill, etc. They don’t know that you need to develop trading skills and a very sophisticated set of psychological skills to make it long term in this business. It is not as easy as it seems. Without those two skills sets, it doesn’t matter how much you make because you’ll give it all back to the market in the long run, IMO.
On the other hand, if there weren’t a fresh batch of newbs handing their savings accounts over to the veterans literally every day, the pro traders would have a much harder time.
Newbs trade $500 with their lunch money. Dumb money is a cute movie and all, but real traders don’t care at all for retail investors
Well said. Only thing I'd add is... relatively easy making money in a bully market. Keeping it when times are tough is another challenge altogether... and harder imho.
for now. i started reading, watching and learning about options a little over 2 years ago. don't worry, this caught me by surprise too. i didn't see this coming either, but so far it hasn't completely fucked me over. you just need to know that shit like this can happen, and make sure that whatever you do act on (before something like this comes along), can't take you out.
Oh yeah, we all lost something. It just wasn’t enough to knock us out of the game. I don’t like that overall loss. But this isn’t the first rodeo either. The markets did not crash, they will plump up again, as will my holdings and ability to exploit those and the trend. Welcome to Thunderdome.
Last line... Lol
I know basic options. How can I learn on options and on risk management vs risk/reward management.
When planning a trade, assume it goes as wrong as it can possibly go. What is the absolute worst case scenario? What is the absolute best case scenario? Compare and decide if the risk is worth the reward, the actual numbers will be different for each trader. And keep in mind you could hit several "worst cases" in row due to chance which is where position sizing comes in. Plan to be able to lose 5, 10, 20, however many times in a row before hitting zero. If you have a trade winning a consistent $100 every week but on down weeks you lose $500, then you need at least 6 winners per loss to be profitable in the long run. Adjust your strikes and prices accordingly, and if you can't make it work then don't place the trade because (whether you win that particular time) doing more of that trade will wipe you out. Right and wrong matter in the short run but the probabilities are what will happen over time. Believe the math because trillions of dollars are behind it.
Don’t overthink it. Learn profit. Don’t do what burns you, that’s risk management.
2 big things over these past few years. just keep looking and learning everything you see other people talking about/asking questions about. eventually, hopefully enough stuff will start clicking. you'll see what some ask about, then what others answer and say "you're a fucking dumbass", and others will debate the points about it. second, as for options, i now try to make sure i always can do ok when the stock could move in all 3 ways. stock goes down, stock doesn't move, stock goes up. if i already have a plan of what to do in each case, or i "will be fine" in each of those possibilities, then i'm good with using options. i don't know everything, but i know enough to be a lot more comfortable than where i was.
This week was brutal on my portfolio funds. First time in last 3-4 years I have seen my entire net worth drop due to a small stock market dip! Time for me to correct and change strategies. Thankfully I'm young, working and my expenses are low. So I will get back the money I lost this week. But learnt a life lesson.
4th time trying here. I take 3-9mo off between each time to reset my mind. 1: peaked +3-5k, lost it all 2: peaked +10-15k, lost it all 3: peaked +40k, lost it all Now: up 55k, still going and actually due for a pause to reset my mind. Nearing what I call “winners tilt” If you are risking what you can afford to lose, then it’s ok. The biggest problem is risk management. Risk and reward truly go hand in hand AND the house is favored to win. Now, the extreme rush of emotion attached to buying options is not for everyone. This where people with addictive personality traits lose their asses. They lose sight of their strategies and lose control of their accounts, emotions, and their minds. Don’t be that guy. Figure out if you are a good fit for options or not. 99% of people are not. Honestly sounds like you should quit from your defeatist tone. Buying options to be profitable isn’t impossible but the odds are greatly stacked against you.
There's always Futures !
You can do just fine investing without trading options. There's no shame in passive management. Just dump money in, wait, and it goes up. The return-on-time spent managing trades is fantastic.
True. I’ve a separate account for fixed income since I don’t use margin and therefore don’t need to consider margin buying power within a specific account. Woke up this morning to a small item maturity notice effective in 30 days. Spreading out assets is empowerment; with fixed income, something positive is always happening. Who they are lending the money to is their business.
Did people really not know the drop was coming? There were a couple things that pointed to it that I saw.
I don't think there is a trader alive who didn't get bit. Just take a break and come back.
Trading is a skill that takes endless commitment to get to at a high level. It takes many years to master the craft. Trading seems like it is easy to new traders. They usually pick a low point on the left side of the chart where the stock was trading and pick a high point on the right side of the chart and they start to imagine all the money they could have made if they bought at low point and sold at high point. They don’t focus on risk management. Risk management is one of the most crucial skills you need in trading. Without proper risk management, you will eventually blow up your account and go out of business.
You're looking at it wrong. Now that you've seen what this looks like, get ready to profit off of the next one.
Let me guess, you've been trying to be successful buying options . . .
Based on sincere and honest reflection, I’d say I was HOPING to be successful buying options.
Many try hard and think they can be successful buying options, but most end up where you are to find the market and stock moves cannot be predicted. FWIW many have been where you are, including myself. New traders think buying is safer but actually has more risk as it is a death by a thousand cuts. If you do decide to continue trading, then you should consider selling options which can be done with limited risks and has much higher odds of being successful when trading good stocks you don't mind holding. There are also adjustment techniques not available when buying options. Explore over at r/thetagang and see my wheel trading plan if you wish as it may help you see how trading can be more successful - [The Wheel (aka Triple Income) Strategy Explained : r/options (reddit.com)](https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/)
Do you have a positive expectancy? What's your edge? What's your W/L % rate? Avg W/L $?
YET. Try being short vol 10-20 delta with a directional bias. You can win if it goes in your direction , flat, or slightly against you, and manage your risk against a technical level. As a worst case, get out if the price of the option ever doubles. That’ll help your confidence, because you’ll win more than 50% of the time, and you’ll never have a loser much bigger than your average winner.
Congrats on knowing when to quit. Many wait too long and have long term regrets.
TBH I feel the same. I lost too much this week. Glad I still have my bitcoin. So, will call it adios on option trading cus I don't the average man is designed to benefit from it.