Option trading with DanPickUp
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Hi
Entering the market with options. How and specially when?
The subject was touched in the pass in this thread. Still: Many which would like to do directional trading got stuck with that particular part of trading. You may heard: Every monkey can enter the market. Does this mean that entering the market is so easy? Yes and no. Call your broker and say: Buy market now and you are filled. But was this just a good idea or should I may have thought a bit more about my entry level? And why I am so many times stoped out or market just makes a little move when I once right?
When we want to enter the market we must have a clear idea by our self's where we want to place or implement our entry trade. It does not make much sense to jump in the market when we feel: A now market goes up, so lets buy a call. Or: Hey, that members says we should now buy a call because of this or that. That is wrong and that is gambling. If you do it on an automatic system, that is different and not subject of that post.
Let me show a simple, powerful way of how we can enter the market. It is not new. It is even very old fashion, but at the moment it works, you will make money most of the times. It is specially for directional trades, as for directional trades you must have many odds in your favor and not only luck. You do not need any expensive charting software and that is an other reason why I will discuss that specific tool. So every body can work with it. I mean it is beautiful when you have such a program, but no need for what I show now. Use a screenshot program like Picpik and a paint program like Paint Net. With the screen shot program you can make a picture from any chart you have in your browser and the paint program you need to draw in your picture you made. Links to the downloads are at the end of this post.
Now look at this chart: http://i45.tinypic.com/123twk6.png. What do you see? What is the trend of the market? Would you enter long or short?
There is a long term trend which is down http://i47.tinypic.com/t68e4x.png and there are short term up and down moves http://i46.tinypic.com/2wgan4h.png .
I think you already got the idea where to enter the market when you do it with that simple trend lines. No fancy and bla bla indicators and what so ever. Just as simple as that. When you draw such trend lines be sure that they are touched at least three times. If you draw them to short, the chance that they are broken is very high. As more such a line is touched, as stronger the support or resistance is.
You only enter the market when the trend lines are touched http://i47.tinypic.com/awqi2p.png . Your chance to make money is far better compare to just jump in somewhere in the chart. You will not always be in the market with that simple system and you will not always be successful as you see with the following entry http://i49.tinypic.com/27zvhhc.png . You also have to wait until you can paint your first trend line. But waiting for your entry is the way to do it as you decide on what level you want to risk your money.
Now what about the situation in the chart. Do we enter or what are we doing? http://i47.tinypic.com/2dltdup.png Yes, we wait as the trend line not is touched.
To enter a trade in the shown way is most simple, powerful and it gives you the control about it. The shown way has its advantage and disadvantage. But as there is no perfect what ever in trading, we can use that tool and make money with it. Now lets look about our entry and how it did http://i48.tinypic.com/14uj6ua.png . As you see, the TL was at least three times touched and the fourth time we used it as our entry point. Here we had a limit buy order placed in advance by our broker. In advance because market not will wait for us and if we are not there with our order, market will move on. It is like in a store: You place in your window what you want to sell and when people walk along your window, they will buy because they have seen it in the window. Placing an order is the same thing and a must when using the shown tool the way I did.
To place a limit option order, you need to know what price the option should have at your entry level. In the following link you can calculate those price. http://www.option-price.com/index.php
You may now ask: But I am not interested to wait as I want to make money now. So what else do you have to show Dan? My answer: How many charts can you trade? How many futures and shares are out there on how many time frames? You can place every day such orders on different charts and on different time frames. Only work you have to do: You must search such chart pictures and then you will make your money. You also can place bigger orders on such levels, so you do not need to trade all the times.
Good trading
DanPickUp
Link for the screenshot program: http://www.picpick.org/en/
Link for the Paint Net program: http://www.getpaint.net/
Entering the market with options. How and specially when?
The subject was touched in the pass in this thread. Still: Many which would like to do directional trading got stuck with that particular part of trading. You may heard: Every monkey can enter the market. Does this mean that entering the market is so easy? Yes and no. Call your broker and say: Buy market now and you are filled. But was this just a good idea or should I may have thought a bit more about my entry level? And why I am so many times stoped out or market just makes a little move when I once right?
When we want to enter the market we must have a clear idea by our self's where we want to place or implement our entry trade. It does not make much sense to jump in the market when we feel: A now market goes up, so lets buy a call. Or: Hey, that members says we should now buy a call because of this or that. That is wrong and that is gambling. If you do it on an automatic system, that is different and not subject of that post.
Let me show a simple, powerful way of how we can enter the market. It is not new. It is even very old fashion, but at the moment it works, you will make money most of the times. It is specially for directional trades, as for directional trades you must have many odds in your favor and not only luck. You do not need any expensive charting software and that is an other reason why I will discuss that specific tool. So every body can work with it. I mean it is beautiful when you have such a program, but no need for what I show now. Use a screenshot program like Picpik and a paint program like Paint Net. With the screen shot program you can make a picture from any chart you have in your browser and the paint program you need to draw in your picture you made. Links to the downloads are at the end of this post.
Now look at this chart: http://i45.tinypic.com/123twk6.png. What do you see? What is the trend of the market? Would you enter long or short?
There is a long term trend which is down http://i47.tinypic.com/t68e4x.png and there are short term up and down moves http://i46.tinypic.com/2wgan4h.png .
I think you already got the idea where to enter the market when you do it with that simple trend lines. No fancy and bla bla indicators and what so ever. Just as simple as that. When you draw such trend lines be sure that they are touched at least three times. If you draw them to short, the chance that they are broken is very high. As more such a line is touched, as stronger the support or resistance is.
You only enter the market when the trend lines are touched http://i47.tinypic.com/awqi2p.png . Your chance to make money is far better compare to just jump in somewhere in the chart. You will not always be in the market with that simple system and you will not always be successful as you see with the following entry http://i49.tinypic.com/27zvhhc.png . You also have to wait until you can paint your first trend line. But waiting for your entry is the way to do it as you decide on what level you want to risk your money.
Now what about the situation in the chart. Do we enter or what are we doing? http://i47.tinypic.com/2dltdup.png Yes, we wait as the trend line not is touched.
To enter a trade in the shown way is most simple, powerful and it gives you the control about it. The shown way has its advantage and disadvantage. But as there is no perfect what ever in trading, we can use that tool and make money with it. Now lets look about our entry and how it did http://i48.tinypic.com/14uj6ua.png . As you see, the TL was at least three times touched and the fourth time we used it as our entry point. Here we had a limit buy order placed in advance by our broker. In advance because market not will wait for us and if we are not there with our order, market will move on. It is like in a store: You place in your window what you want to sell and when people walk along your window, they will buy because they have seen it in the window. Placing an order is the same thing and a must when using the shown tool the way I did.
To place a limit option order, you need to know what price the option should have at your entry level. In the following link you can calculate those price. http://www.option-price.com/index.php
You may now ask: But I am not interested to wait as I want to make money now. So what else do you have to show Dan? My answer: How many charts can you trade? How many futures and shares are out there on how many time frames? You can place every day such orders on different charts and on different time frames. Only work you have to do: You must search such chart pictures and then you will make your money. You also can place bigger orders on such levels, so you do not need to trade all the times.
Good trading
DanPickUp
Link for the screenshot program: http://www.picpick.org/en/
Link for the Paint Net program: http://www.getpaint.net/
Hi
An other query came up: Short at the money Straddle and how to trade them.
Short atm Straddles are implemented when we expect a sideways market and when we expect volatility to decrease. It is a high risk income strategy with very limited profit potential and unlimited loss potential. http://i50.tinypic.com/16b0suo.png The picture should made that very clear.
The goal with this strategy is to profit from time decay. It is not recommended for novices to trade such high risk strategies. Even more advanced option traders struggle some times to handle that strategy. How comes?
Entering when volatility was very low, then market starts slowly to get more volatile, but stays still in the range. What happens now? Option value increases through higher volatility on the underlying and no profit or just little on the time value side. People start to wait with the thoughts that time is in there favor. Now is this really the case or have we not forgotten some facts? What could that be?
The permanent risk you face are the unexpected moves in the market. Many trade short atm straddle short before expiring to profit from the heavy loss of time decay. This most of the times will work fine until when it comes to expiry day. And here many lost heavy when the market jumped in either one direction and made the option, which in the best case until now has lost nearly all value, an itm or even deeper itm option. As they sold that option and expiry day is over, they now have to buy it back for expensive money. No other way. This just to inform novices about how to be careful about that fact.
Now how can or could we handle such risk?
First of all: When entering such strategies be sure about your break even points and set your stop losses on each side. This can be done by calculating how much you want to risk and this amount you add on each side and that is your stop loss price for each leg. Those stop loss orders are placed by your broker in case you sit not the whole day in front of your chart.
When market now moves in either direction of one of your break even points, you can buy back that sold leg and sell the next otm strike option. In this case you converted the strategy in to a short strangle and you expanded your option trading range for the strategy.
An other way is to stay short with the legs and go long the next otm strike price. You best trade that by doing counter market buys, means when market is near your short call break even, you buy the long put and when market is near your short put break even you buy the long call. In that way you convert the short straddle into a long butterfly or you even can do a broken wing long butterfly.
The same you can do when you now have a short strangle. You then would convert it to a long iron condor or even a broken wing long iron condor. You see, there are many ways to handle the situation with option trading as you even would have more choices.
Now some come up with the question: Hey Dan, what about the future. Why should I go for a short strangle or long butterfly or even a condor when I just can trade the future against my short option legs? My answer: Well man, that is a possible way of handling such strategies. But are you a proven profitable day trader and are you in the situation to make some money with the future? Be very true about the answer you give now to your self. So think twice before risking your wife's shoes and shirts. Playing with two devils which are the short straddle and the future, your wife could be become the third one
Good trading
DanPickUp
An other query came up: Short at the money Straddle and how to trade them.
Short atm Straddles are implemented when we expect a sideways market and when we expect volatility to decrease. It is a high risk income strategy with very limited profit potential and unlimited loss potential. http://i50.tinypic.com/16b0suo.png The picture should made that very clear.
The goal with this strategy is to profit from time decay. It is not recommended for novices to trade such high risk strategies. Even more advanced option traders struggle some times to handle that strategy. How comes?
Entering when volatility was very low, then market starts slowly to get more volatile, but stays still in the range. What happens now? Option value increases through higher volatility on the underlying and no profit or just little on the time value side. People start to wait with the thoughts that time is in there favor. Now is this really the case or have we not forgotten some facts? What could that be?
The permanent risk you face are the unexpected moves in the market. Many trade short atm straddle short before expiring to profit from the heavy loss of time decay. This most of the times will work fine until when it comes to expiry day. And here many lost heavy when the market jumped in either one direction and made the option, which in the best case until now has lost nearly all value, an itm or even deeper itm option. As they sold that option and expiry day is over, they now have to buy it back for expensive money. No other way. This just to inform novices about how to be careful about that fact.
Now how can or could we handle such risk?
First of all: When entering such strategies be sure about your break even points and set your stop losses on each side. This can be done by calculating how much you want to risk and this amount you add on each side and that is your stop loss price for each leg. Those stop loss orders are placed by your broker in case you sit not the whole day in front of your chart.
When market now moves in either direction of one of your break even points, you can buy back that sold leg and sell the next otm strike option. In this case you converted the strategy in to a short strangle and you expanded your option trading range for the strategy.
An other way is to stay short with the legs and go long the next otm strike price. You best trade that by doing counter market buys, means when market is near your short call break even, you buy the long put and when market is near your short put break even you buy the long call. In that way you convert the short straddle into a long butterfly or you even can do a broken wing long butterfly.
The same you can do when you now have a short strangle. You then would convert it to a long iron condor or even a broken wing long iron condor. You see, there are many ways to handle the situation with option trading as you even would have more choices.
Now some come up with the question: Hey Dan, what about the future. Why should I go for a short strangle or long butterfly or even a condor when I just can trade the future against my short option legs? My answer: Well man, that is a possible way of handling such strategies. But are you a proven profitable day trader and are you in the situation to make some money with the future? Be very true about the answer you give now to your self. So think twice before risking your wife's shoes and shirts. Playing with two devils which are the short straddle and the future, your wife could be become the third one
Good trading
DanPickUp
Just an illustration for the above strategy
Spot level @6000
CE price @100
PE price @100
Short strangle net credit 200
Risk capital 50
BE for CE 6250 BE for PE 5720
Say after 15 day spot level @5750
Buy back 6000 PE and sell 5700 PE
or
buy 6100 CE (I have doubt on how it would save us from PE losses ?)
Spot level @6000
CE price @100
PE price @100
Short strangle net credit 200
Risk capital 50
BE for CE 6250 BE for PE 5720
Say after 15 day spot level @5750
Buy back 6000 PE and sell 5700 PE
or
buy 6100 CE (I have doubt on how it would save us from PE losses ?)
hello dan it nj from mumbai.......i'mnew here seems lik u is an expirenced guy here can u plz help me........!!!!
actully was having some questions lik i want to invest in option trading on this sitehttp://www.bbinary.com/ so being a fresher should i invest plz do reply me sir or contact me at 09969256501
actully was having some questions lik i want to invest in option trading on this sitehttp://www.bbinary.com/ so being a fresher should i invest plz do reply me sir or contact me at 09969256501
Hi dear nj
Following any body or any providers and not understanding by your self what is recommended there is not to recommend.
The same applies to any posts or links in which critics or what so ever are done and not proved in any way, as such post or what so ever are done from novices which have no clue about how to trade options successfully.
Take care to your money and all the best
DanPickUp
Following any body or any providers and not understanding by your self what is recommended there is not to recommend.
The same applies to any posts or links in which critics or what so ever are done and not proved in any way, as such post or what so ever are done from novices which have no clue about how to trade options successfully.
Take care to your money and all the best
DanPickUp
actully sir i'm an engineer at wipro being a science student i don't hav strong knowledge about binary options but some of my friends do trade on this site i.e., www.bbinary.com so i just want you to have a look at this site i.e., bbinary.com and tell me should i invest or no..........plz sir awating 4 rply
Hi
Entering the market with options. How and specially when?
The subject was touched in the pass in this thread. Still: Many which would like to do directional trading got stuck with that particular part of trading. You may heard: Every monkey can enter the market. Does this mean that entering the market is so easy? Yes and no. Call your broker and say: Buy market now and you are filled. But was this just a good idea or should I may have thought a bit more about my entry level? And why I am so many times stoped out or market just makes a little move when I once right?
When we want to enter the market we must have a clear idea by our self's where we want to place or implement our entry trade. It does not make much sense to jump in the market when we feel: A now market goes up, so lets buy a call. Or: Hey, that members says we should now buy a call because of this or that. That is wrong and that is gambling. If you do it on an automatic system, that is different and not subject of that post.
Let me show a simple, powerful way of how we can enter the market. It is not new. It is even very old fashion, but at the moment it works, you will make money most of the times. It is specially for directional trades, as for directional trades you must have many odds in your favor and not only luck. You do not need any expensive charting software and that is an other reason why I will discuss that specific tool. So every body can work with it. I mean it is beautiful when you have such a program, but no need for what I show now. Use a screenshot program like Picpik and a paint program like Paint Net. With the screen shot program you can make a picture from any chart you have in your browser and the paint program you need to draw in your picture you made. Links to the downloads are at the end of this post.
Now look at this chart: http://i45.tinypic.com/123twk6.png. What do you see? What is the trend of the market? Would you enter long or short?
There is a long term trend which is down http://i47.tinypic.com/t68e4x.png and there are short term up and down moves http://i46.tinypic.com/2wgan4h.png .
I think you already got the idea where to enter the market when you do it with that simple trend lines. No fancy and bla bla indicators and what so ever. Just as simple as that. When you draw such trend lines be sure that they are touched at least three times. If you draw them to short, the chance that they are broken is very high. As more such a line is touched, as stronger the support or resistance is.
You only enter the market when the trend lines are touched http://i47.tinypic.com/awqi2p.png . Your chance to make money is far better compare to just jump in somewhere in the chart. You will not always be in the market with that simple system and you will not always be successful as you see with the following entry http://i49.tinypic.com/27zvhhc.png . You also have to wait until you can paint your first trend line. But waiting for your entry is the way to do it as you decide on what level you want to risk your money.
Now what about the situation in the chart. Do we enter or what are we doing? http://i47.tinypic.com/2dltdup.png Yes, we wait as the trend line not is touched.
To enter a trade in the shown way is most simple, powerful and it gives you the control about it. The shown way has its advantage and disadvantage. But as there is no perfect what ever in trading, we can use that tool and make money with it. Now lets look about our entry and how it did http://i48.tinypic.com/14uj6ua.png . As you see, the TL was at least three times touched and the fourth time we used it as our entry point. Here we had a limit buy order placed in advance by our broker. In advance because market not will wait for us and if we are not there with our order, market will move on. It is like in a store: You place in your window what you want to sell and when people walk along your window, they will buy because they have seen it in the window. Placing an order is the same thing and a must when using the shown tool the way I did.
To place a limit option order, you need to know what price the option should have at your entry level. In the following link you can calculate those price. http://www.option-price.com/index.php
You may now ask: But I am not interested to wait as I want to make money now. So what else do you have to show Dan? My answer: How many charts can you trade? How many futures and shares are out there on how many time frames? You can place every day such orders on different charts and on different time frames. Only work you have to do: You must search such chart pictures and then you will make your money. You also can place bigger orders on such levels, so you do not need to trade all the times.
Good trading
DanPickUp
Link for the screenshot program: http://www.picpick.org/en/
Link for the Paint Net program: http://www.getpaint.net/
Entering the market with options. How and specially when?
The subject was touched in the pass in this thread. Still: Many which would like to do directional trading got stuck with that particular part of trading. You may heard: Every monkey can enter the market. Does this mean that entering the market is so easy? Yes and no. Call your broker and say: Buy market now and you are filled. But was this just a good idea or should I may have thought a bit more about my entry level? And why I am so many times stoped out or market just makes a little move when I once right?
When we want to enter the market we must have a clear idea by our self's where we want to place or implement our entry trade. It does not make much sense to jump in the market when we feel: A now market goes up, so lets buy a call. Or: Hey, that members says we should now buy a call because of this or that. That is wrong and that is gambling. If you do it on an automatic system, that is different and not subject of that post.
Let me show a simple, powerful way of how we can enter the market. It is not new. It is even very old fashion, but at the moment it works, you will make money most of the times. It is specially for directional trades, as for directional trades you must have many odds in your favor and not only luck. You do not need any expensive charting software and that is an other reason why I will discuss that specific tool. So every body can work with it. I mean it is beautiful when you have such a program, but no need for what I show now. Use a screenshot program like Picpik and a paint program like Paint Net. With the screen shot program you can make a picture from any chart you have in your browser and the paint program you need to draw in your picture you made. Links to the downloads are at the end of this post.
Now look at this chart: http://i45.tinypic.com/123twk6.png. What do you see? What is the trend of the market? Would you enter long or short?
There is a long term trend which is down http://i47.tinypic.com/t68e4x.png and there are short term up and down moves http://i46.tinypic.com/2wgan4h.png .
I think you already got the idea where to enter the market when you do it with that simple trend lines. No fancy and bla bla indicators and what so ever. Just as simple as that. When you draw such trend lines be sure that they are touched at least three times. If you draw them to short, the chance that they are broken is very high. As more such a line is touched, as stronger the support or resistance is.
You only enter the market when the trend lines are touched http://i47.tinypic.com/awqi2p.png . Your chance to make money is far better compare to just jump in somewhere in the chart. You will not always be in the market with that simple system and you will not always be successful as you see with the following entry http://i49.tinypic.com/27zvhhc.png . You also have to wait until you can paint your first trend line. But waiting for your entry is the way to do it as you decide on what level you want to risk your money.
Now what about the situation in the chart. Do we enter or what are we doing? http://i47.tinypic.com/2dltdup.png Yes, we wait as the trend line not is touched.
To enter a trade in the shown way is most simple, powerful and it gives you the control about it. The shown way has its advantage and disadvantage. But as there is no perfect what ever in trading, we can use that tool and make money with it. Now lets look about our entry and how it did http://i48.tinypic.com/14uj6ua.png . As you see, the TL was at least three times touched and the fourth time we used it as our entry point. Here we had a limit buy order placed in advance by our broker. In advance because market not will wait for us and if we are not there with our order, market will move on. It is like in a store: You place in your window what you want to sell and when people walk along your window, they will buy because they have seen it in the window. Placing an order is the same thing and a must when using the shown tool the way I did.
To place a limit option order, you need to know what price the option should have at your entry level. In the following link you can calculate those price. http://www.option-price.com/index.php
You may now ask: But I am not interested to wait as I want to make money now. So what else do you have to show Dan? My answer: How many charts can you trade? How many futures and shares are out there on how many time frames? You can place every day such orders on different charts and on different time frames. Only work you have to do: You must search such chart pictures and then you will make your money. You also can place bigger orders on such levels, so you do not need to trade all the times.
Good trading
DanPickUp
Link for the screenshot program: http://www.picpick.org/en/
Link for the Paint Net program: http://www.getpaint.net/
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