Jul 17

daily trade log 2012 07 17, one more

Underlying Stock : NASDAQ 100 Futures

Strike / Expired : 2566.13 Call / 2569.38

Stake money : USD50

Payout / payout rate : US83 / 65%

Holding time : 9 mins

Net Profit : USD33

 

Reason to enter trade:

Purely rely on charting for entering trade with some extrapolating techniques for this binary options play. Signals pointed to reversal trend at point of entering trade, just before the 5-mins lockout period.

Jul 17

daily trade log 2012 07 17

Tweeted yesterday that I entered 4 trades with my EZTrader binary options account, played NASDAQ futures, won the first 2 but succumbed on the next 2. Called it a night to reassess my mistakes – I was too eager to enter trades last night AND at the wrong timings. Chart signals were not aligned properly but still I entered. Sigh…

Today, was a different story. 4/4 wins. Recouped all my losses from last night and pocketed USD67 in extra. Still not that profitable compared to my IB trades. More than that later….

Jul 16

Withdrawing funds from binary options brokers

To my horror, I read a couple of articles about the difficulties experienced by some traders in withdrawing their funds from binary options brokers only after opening my trading account with one of the brokers. While I experience no such issue with Interactive Brokers who I have maintained my account with over the past five years, having read those articles gave me the spooks. Come to think of it, the binary options brokers that I recced through before opening my account are mostly based and headquartered in Cyprus. I will try out the withdrawal process from EZtrader and post on that later on. Hope it will be a swift just like Interactive Brokers.

Jul 13

daily trade log 2012 07 12

My EZTrader binary options trades from July 6 (date of opening new account) till July 12. Initial 3 are “tuition fees”.. lol… added in a little bit of excitement and adrenalin. That’s why the losses.

Strategized and conditioned my psychology the next trading day and added in my chart reading “skill”. Hope the latter results would last forever. lol….

Jul 11

Binary Options trading

Binary options trading have been around since 2006, but it was not until I setup this site when I came across it. I read and studied binary options trading and to my astonishment, binary options trading is way simpler than the options trading I paid to learn. There are:

  1. NO technical jargons
  2. NO need to know technical strategies (such as butterflies, condors, straddles, strangles, spreads and etc) if you chose not to know although I opinionate that these strategies can be applied in binary options trading.
  3. NO worries on time value decay of options
  4. NO or very less emotions involved in stopping losses or letting profits run
  5. NO pattern day trading rule
  6. DO need fundamental knowledge of technical chart reading (my opinion)
  7. DO need to be aware of current market sentiment

Binary Options TradingSo what are binary options trading? Binary options are contracts entered by traders to predict whether an underlying asset (to that binary option) will rise or fall. Traders either buy a call contract (predicting that the price will rise) or a put contract (predicting that the price will fall). A trader profits if the prediction of the trader is correct (or “in-the-money”) and gets paid a fixed percentage between 65-80% of the trading value. In a nutshell, a trader only needs to assess and predict the price movement (either rise or fall) of the underlying assets to profit and need not care about anything else (items as mentioned in no.1-5 above). Learn more about binary options here.

Assets currently available for trading for binary options are:-

  1. Indices – major indices around the globe
  2. Stock equities – selection of some of the bigger corporations from US, Europe, Asia and Australia.
  3. Currencies – major paired currency around the world
  4. Commodities – few majorly watched commodities around the world

I have recently opened a trading account with EZTrader and tested out its trading platform. I have chosen EZTrader simply because of the larger asset list/index to trade. And EZTrader has all the underlying assets which I currently monitoring; AAPL, AMZN, NFLX and BIDU. So, EZTrader is it! Might write a review on the other binary options brokers which I considered before in another post.

So, what’s my take on binary options trading? Cynically, with all the technicalities and strategies employments in options trading (almost) gone, except the technical charting knowledge that I still use to enter trades, somehow rather I feel I am walking a fine line between investing and gambling. But, then again, I enter my trades in binary options on skill and use of a system based on research, not on gut feel and emotions; this is always my trading psychology.

Jul 09

Off trading

no tradeDid not trade for the whole of last week due to the 4th of July holidays AND am testing out one product on binary options trading and its trading platform. Deposited some funds into the newly created account and has been testing it the last week. Will write a short brief on my testing session soon. Meanwhile, happy options trading.

Jul 04

Options trading as business of a full time trader

optionstradingbusiness.comOptions trading as a business? Can it really be done? These are some common questions in our mind when Mervin and I explored the path to becoming a full time trader, for US options market at least.

First thing first, why US options market? Well, local bourse in the country I live in is not as liquid and as large as US market for trading, in my opinion. Stock prices’ momentum movements are scarce, hence not volatile. As a day/swing trader myself, I like to see high volatility in movement of stock prices. Long 1-minute candlestick bars are the best, doesn’t matter if it was green or red. Then, options… why options instead of the stock itself? Because I am not rich enough, you see – 1 unit of AAPL share is about USD600 today! Yes, just 1 share. If I were to buy 1 lot (100 shares), that’s USD60,000 investment in one stock, one basket. And that’s about a year and a half of the salary I earned from my fixed employment. So, trading options (to the stock) rather than buying the underlying stock itself is something more affordable to me. Options prices are a fraction of 1/10 (or may even be lower) of the underlying stock price. Ya.. most people say that options has a bigger risk exposure, but I assessed my affordability and this is just IT, there is nothing else for me to choose other than OPTIONS. And yes, there is Forex trading, but I just feel that it is just not my cup of tea. So, options it IS!

Mervin treats options trading like a business, I couldn’t agree less. How so? Options traders have sets of procedures and rules to follow when we trade, a trading system, just like any businesses which have their own sets of policies and procedures. We should not be (or at least try not to be) influenced by emotions when we trade, as in business are usually driven by objectives and numbers, not sentimental values. Businesses engage in the buying and selling products/services to gain profit, we on the other hand have only one product, stocks (and its options). All good businesses manage based on ratios and numbers, we manage the numbers in our trading system to stay profitable. All businesses have profit forecast and strategies, we too have a plan and strategy for each trade, to minimize risk and to exit in style even if the market has turned on you.

But the most important factor in treating options trading as business, is the persistence, the believe that the business is RIGHT for you and you can achieve success and financial freedom with options trading business. As many businesses may experience obstacles, so does options trading. I mentioned that I had my account wiped out a handful times, did I not? I learned from the mistakes, I improvise on my trading system, my psychology and I persisted in options trading because I still believe it is the RIGHT business for me. And the best thing, once you have learned the principles of options trading, it will never change (at least in my lifetime, I opinionate). I can use the knowledge over and over again to trade this business with the same one product.

So, is options trading the RIGHT business for you? Learn more now.

Jul 01

full time trader trading psychology

trading psychologyI would think trading psychology is the utmost important factor to a full time trader albeit a successful trader. Of course, you would need technical knowledge in trading of equities and instruments in general, but it is the traders’ psychology that determine a trade altogether – his/her decision to select which portfolio, which stock to watch, timing to open and close, which strike price to choose, what price to cut, take profit or cut loss. These are the decisions one trader has to make, and there could be more.

I was once told that you may be systematic in your job, gentle behind the wheels (not a road-bully!), tolerate and respectful in your living, but when you sit in front of your computer, trading online, you are a different ANIMAL. Lol…. I believe!

Let me relate the above to myself. I am an accountant by profession. You know.. how a typical accountant works, I’ll spare you the details. But put me in front of the trading screens, I am like a live wire. Maybe it’s adrenalin push, maybe it’s the thrill of winning, maybe it’s the thrill of trading, but I am definitely not myself in front of the screens, clicking away my thoughts. Taking a step back and looking at the way I traded, it’s like seeing a double physical me but another cognitive psychological me. Phew…. scary! Why so? Because of the way I traded – I managed to wipeout my account a few times (haha, my guru once told me that in the lifetime of a trader, one should at least experience that, and I did, not once but almost a handful times). You know… all options expiring worthless, out of money!

I thought I have the system, the discipline, the mindset of a trader, but the fact is I don’t. It took me years and am still trying to reinforce the psychology barricade for my trading so that I follow my own set of rules and don’t wipe out my account again. And I am seeing some results. May not be perfect as yet, but am seeing some differences in my trading psychology. I remembered reading a book once from Dr Alexander Elder titled Trading for a Living, recommended by Mervin when we first started to options trade. It is a self-help book for continuous self-improvement in one’s trading. What I liked most about the book was about the psychology part of being a stock trader. Heck, I might as well go read it for a second time just to refresh and reinforce myself psychologically.

Jun 27

daily trade log 2012 06 26

Underlying Stock : AAPL

Strike : 585 Call

No. of contracts : 10 contracts

Enter/exit price : 1.10/1.25

Holding time : 6 mins

Net Profit : USD135

 

Reason to enter trade:

Market did not show any signs of big movement, but after yesterday’s big pull back by AAPL (I missed two windows of opportunity last night to open trade, so I switched off my laptop and went to watch TV) and to my limited experience, AAPL stock usually rebound, I waited for the signal, and wahla…. but exited too early…

Jun 27

daily trade log 2012 06 22

Underlying Stock : AAPL

Strike : 580 Call

No. of contracts : 6 contracts

Enter/exit price : 1.50/1.68

Holding time : 3 mins

Net Profit : USD104

 

Reason to enter trade:

Traded on chart signals. Big drop in the opening 2nd minute, a slight long lower shadow, bingo!

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