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REPLY to "REAL TRADERS"

Chikot
Jan 17 2015 at 12:12
2299 posts
Over 4 years I was stupidly trading FX I lost some $4000 , $$3500 in the first year and a half. Traded without having a clue about all necessary factors for success.

Bob LLewellyn (ForexAssistant)
Jan 18 2015 at 08:21
465 posts
“Bob, I really like you. You are a very very good guy :) “

I'm blushing over here... However, thanks Chikot, I really do appreciate the kind words.

Now as to where can an active trader get the most bang for the buck, well, I would imagine Super Trader Karen would tend to agree with you. That little girl turned $100,000 into 41 million in 5 years. My robots can't do that but just about anybody can run a robot. I can go days without even checking on mine. I'm free to enjoy what I have worked for.

I think that if you're smart and young with a good heart, you should learn about the futures market. But later on, when you want to diversify your holdings and develop a few automated passive steams of income, well, that is where the forex market shines.

By the way, anyone reading this who is not familiar with Super Trader Karen, you just got to watch at least one of her interviews. Do a web search for Super Trader, you will be inspired.

Bob

where research touches lives.
Chikot
Jan 18 2015 at 12:10
2299 posts
Never heard of her. Now I know. Doe snot look like a little girl though. More like Grandma :)
The good point she had $100K. I wish I had this much. I started trading futures with considerably smaller stake. orders of magnitude but full size. That a mighty good start. As I see she also traded options. I only know that options exist, they have different terminology and they can allow outsized gains and losses. Correct me but ain't it is betting on direction or some outcome? I would be interested to learn later after I build my original stake so that I can take some and open second account.
 I am not spring chicken , most probably younger than you I guess from what you was telling in your posts you already was at at least your teens in 60's while I was sucking mommy's tits. However my heart is still good to trade futures :) But it is all thanks to years of daily practice for hours with some money at stake.

Chikot
Jan 18 2015 at 12:11
2299 posts
BTW, Bob,m if you are familiar with options. Could you offer some site where newbie could learn some basics? I was trying to read about options before but it all sounded so different form what i have been doing I just did not continue. But I am interested.

Bob LLewellyn (ForexAssistant)
Jan 18 2015 at 20:42
465 posts
Well, I undrstand the basic principles but don't have any real stratagy. All of my time has gone into research for the new forex market. So I took the liberty of inviting someone to join us that is competent in those markets. I don't know if he will be able to drop by but I invited him anyway. I would like to know more my own self.

Bob

where research touches lives.
Chikot
Jan 19 2015 at 12:13
2299 posts
Never seen options trader either in flesh or on line. Must be rare animal. But cannot blame. I tried to read and it looed like something different form what we are doing. Whether currencies or futures, still, it is not that much different.

Bob LLewellyn (ForexAssistant)
Jan 19 2015 at 15:04
465 posts
“Never seen options trader either in flesh or on line. Must be rare animal. “

Not so rare if you think about what an option is. Lets say you have a nice home and you want to protect it from fires or floods. You go to a market where they sell options for the type of protection that you want. Insurance companies write those kinds of options. Now, if a fire or flood happens, you have the right but not the obligation of having the insurance company pay off.

I think everyone would agree that the insurance companies do very well protecting against unforeseen disasters. Lets say I buy a stock and I think the price will go up but what if it doesn't. I can handle a drop of $10 a share but anything more than that will hurt me too much. I can buy an option on that stock so that if the price drops more than $10, I can sell my stocks to the person that wrote the option and he will have to buy my stocks at today's prices.

What happens if the price does not drop by the given amount? The options writer, like the insurance company, keeps your options payment. The nice thing about writing options is that you get your profit, right up front. The bad thing for writers is that it can get expensive in volatile markets.

The problem with hedging our trades using options is that we deal in currency pairs and the options market is limited to certain currencies. I wouldn't call options trading gambling but it seems too risky for my blood.

May I suggest that Chikot explain what he does in the futures market. The reasoning is that there may be some way to hedge our holdings using some other related market and for everyone, it is wise to diversify.

Bob

where research touches lives.
Chikot
Jan 19 2015 at 23:41
2299 posts
Bob, I am taking intra day directional trades and is in trade anywhere form 1 to 9 hours depending upon situation and whether is my target hit. Once my target met I am not trading. But I have never thought of options as a way to hedge. It is not who I am.
Is there a way to trade options for a sake of options trading, without hedging? Just like regular trading. you make a bet, you are either wrong and you lost the best or you are right and you get paid.
Let's take your example. Can you simply bet that share will drop to $10 without holding position in that stock? I understand one pays that insurance bet whatever , some amount in which case if price goes to $10, I get paid, if the price doe snot go to $10, I lose my bet. is it so?

Bob LLewellyn (ForexAssistant)
Jan 20 2015 at 03:43
465 posts
'Can you simply bet that share will drop to $10 without holding position in that stock? '

Yes, it is called trading naked. However, it is not as fun as it sounds.
Well that is from the side of the writer. You can also buy an option to buy a stock if the price changes by a certain amount, so you wouldn't need to own a stock in that case. But I don't want to mislead anyone. I have not done an in depth study into options. You can learn more than I know by reading Investopidia.

First of all, I never started out to be a trader. I am a mathematician, operations research to be more precise. I just wanted to find the fastest and safest way to retire as I was in my fifties and need to start considering my options. (Pun alert). I just utilized my mathematical abilities to optimize my retirement program. However, when I discovered the special attributes of the forex market, I kind of got stuck here.

It turns out that I get my greatest sense of satisfaction and self worth by teaching the next generation. So when I thought that I was finished with my project, and ready to retire, I found that I wanted to write down all of my research for those who will come after me, before I did. So that is what I am currently doing and why I am still here. *However, it means that options is not an option for me because it isn't safe enough and doesn't advance any of my current goals.

I am still curious to learn more yes, but not by researching it. When I began my research into the forex market, I read 22 books on the subject before I even opened my first demo account. I won't teach what I don't know so for that reason I am not comfortable trying to go any further with any explanations on that subject. So Please someone who really knows options, kindly take over or lets talk about how robotics is changing what it means to be a “real trader”..
 Or better yet, why not teach us how you decide what to buy or sell, when to get in and what size to make your trade in the futures market?

Bob

where research touches lives.
Chikot
Jan 21 2015 at 06:57
2299 posts
After reading about options I think it is pretty risky for my taste. Isn't it what 's called derivatives and what Buffet called financial weapon of mass destruction? I'd better stay with beans.
Regarding futures trading I only trade ZS/ soybeans , but traded also CL/ crude. I actually used to run oil trading thread here even before I started trading futures. My thread with trades and all was running for some 3 years. I actually still make announcements of how my cushion building effort is going on.
My trading is all about support/ resistance and price action around those said support and resistance levels. I take directional trades but used to scalp for 2-4 cents. I pay heavy attention to DOM and time &sales windows.
Bob, i understand where you are coming from. Yours approach is different one and based upon statistics and most probably a lot of back testing. It is important very important part in plan building but one cannot overlook that to become trader one must practice none stop and perfect techniques and one must be able to control oneself : patience, discipline, resilience and you name it. Psychology is number one thing in trading. Even plan takes second seat. After I stopped trading FX and oil on MT4, I spent 2 years on futures demo taking Combines with Topstep to make it work. i was losing every single Combine in the first year and was losing money consistently. Up until November 2013 when I finally started turning the corner. After having only 1 losing Combine( psychological reason by the way) and having the rest positive since November 2013 till fall of 2014 and with low draw downs I decided to open live account last year.
Pretty small account considering size. i would say leverage is 20:1 right away and I can say one cannot control size trading futures the way one can trading FX. There is mini futures contracts but I am trading a standard one. $12.5 per tick. To be able to control size one must have large account, in other cases one must do what i stated above. Make things work and have strong psychology, plan and risk control skills.

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