Kim 7,512 Report post Posted May 11, 2013 A while ago I got an email from one of my Seeking Alpha readers. He told me that he is a big fan of my articles and asked how he can learn more. Then he said that he is new to trading options, he set aside a small amount of money in hopes of doubling it at least yearly. Did you get it? The guy admits to be new to options, but expects to double his account at least yearly? I told him that for someone who just starts options trading, preserving your capital during your first year of trading would be a great achievement. Click here to view the article 1 Mikael reacted to this Share this post Link to post Share on other sites
cwelsh 1,500 Report post Posted May 13, 2013 This is a great point, and one that is not made enough. I consider myself a fairly intelligent person, a hard worker, and yet I definitely have had my share of learning bumps trading. Before I ever started, I think I read almost every book out there, spent literally hundreds of hours back testing and modeling, and months paper trading. Thought I had it down, dived in with about $20K of my own money. It was gone ten trades later. Started over, developed a strategy that seemed to work spectacularly, eased into it -- but did not REALLY understand how volatility impacts options. Had great returns for six months, then things went hay wire and I loss half of my money and half of a family members money that I was given. (That was hard to deal with personally -- I can deal with learning bumps/failures myself -- I DONT like hurting others, particularly family members. I know investments are a risk, but its different when YOU are the one losing the money for someone else). Flash forward six or seven years, and I finally feel like I know what I'm doing and am making good returns. Yet I still learn something new almost every month. It is GROSSLY unreasonable to expect to make 100% returns yearly -- EVER. It's particularly unreasonable to expect it right out of the gate. Not impossible, just unreasonable. 1 Mikael reacted to this Share this post Link to post Share on other sites
Hannes Kury 7 Report post Posted May 13, 2013 Thanks for sharing Chris! Share this post Link to post Share on other sites
Mikael 31 Report post Posted May 13, 2013 thanks for sharing, i think it's important to tune down expectations. I have a buddy that works in capital markets (actually the derivatives market but credit swaps) for HSBC and he told me many times that the traders that are the most confident in their abilities and those that let's emotions affect their trades lose the most money. Share this post Link to post Share on other sites
