Trading

[bobsmithldn]

Anyone trade options on the board?

[BrilloPad]

Anyone trade options on the board?

Why do you ask?

[DaveB]

I've got the option of Fish and Chips or Curry for dinner tonight, which would you like to trade?

[bobsmithldn]

Well, I've been 'paper trading' for a while now but am now buying puts on US brokers ... working out quite nicely ...

What sectors are you in?

[Iron Condor]

I trade options and futures full time for a living.

Packed in the IT contractor malarkey last year.

You can potentially make millions trading and the tax rate is either 0% if you use a spread bets or just 18% CGT if you use the real instruments.

Fantastic way of making money if you know what you are doing and can handle the losing periods that are inevitable with trading. Basically trading is like running your own casino business.. some times you lose (perhaps even lose more often than you win) but on balance you know you will come out ahead because your winner trades will be much bigger than your losing trades.

[sasguru]

I trade options and futures full time for a living.

Packed in the IT contractor malarkey last year.

You can potentially make millions trading and the tax rate is either 0% if you use a spread bets or just 18% CGT if you use the real instruments.

Fantastic way of making money if you know what you are doing and can handle the losing periods that are inevitable with trading. Basically trading is like running your own casino business.. some times you lose (perhaps even lose more often than you win) but on balance you know you will come out ahead because your winner trades will be much bigger than your losing trades.

Please explain how you know your losses will be lower in value than your wins?

[Iron Condor]

Please explain how you know your losses will be lower in value than your wins?

Because you use a fixed stop loss to manage your risk.

And your profit objective is a large a multiple of your risk.

I will use a very simple example: say you buy the FTSE futures at 5000. You set a stop at 4900 and profit taxing exit at 5300.

Your risk reward ratio is 3:1 (You will either lose 100pts, or make 300 pts)

Now you need to win on 33% of trades to break even.

If you have an edge about the market (eg you are trading in the direction of the predominant trend) your odds of being right are likely to be 40%. Which is better than random (in this case random is 33%).

Of course no one can prove that the markets are ineffiecient in this way (ie they trend),
and economists will say its not possible to make money this way.. but in reality all you need is a small edge which you apply over hundreds of leveraged trades to come out ahead.

Commissions these day with electronic trading are negligible.

I use www.interactivebrokers.co.uk.

This is one badass firm, the guy who owns it was a computer programmer just like us, he began trading options in the late seventies and is now worth about 10 billion dollars. Now he pays his top IT architect several million dollars a year in salary to design the software and infrastructure they use to extract a billion dollars a year in option trading profits, they also make the infrastructure available to you for free! You just need to write the software (your trading system/algorithms) to sit on top of it. And i have done that.

[HairyArsedBloke]

It's different this time

[larry]

Go for it.

For those who want to learn: http://www.learntrading.co.uk/ There's a free CD course on the basics of charting.

This guy gives some OK tips and observations on the markets, if a little noisily! http://www.youtube.com/futuresanalysts

This guy can train you and will shoulder your losses. AND it's his money!!!!!

http://www.moneyshow.com/directory/c...p?acctid=7609# You need to register (free) to view his presentation.

This is him actually trading http://www.vcmvideos.com/

This site has video tutorials on things like options http://www.woodiescciclub.com/index.html

Psychology is the key to being a good trader. Buy low/sell high is easy in theory - but some 90% of people who trade privately fail.

http://thetradingdoctor.com/

http://robindayne.com/