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Looking to trade Options on the stock market ? Want to use Technical Analysis but don't know where to start ? Charting packages are too expensive ? Well have a look at this! MAKE MONEY FROM
Trading is very personal and you can buy books, systems and charting packages that promise everything. Except the important thing. Will you understand it all? After thousands of dollars, many books, real and E, charting packages, trading systems and 5 years, I couldn't. So I stopped trading for a while. When I regained my interested, I found that there was nothing new under the sun. So I went back to basics and put down what I found in an E Book.
Here, I outline what I think, with enough links and information for you to be able to see the trees from the forest. Then I found that the charting software I bought, was obviously written by smarter people than I. They knew what I wanted and gave me heaps of user manual stuff to show me how to use every function available. The packages are good and have their uses, but I wanted to trade, not read. So I built an Excel spreadsheet that can download daily data for the shares in which I was interested. I trade on the ASX (Australian Stock Exchange), but have been looking at the NYSE (the worlds biggest.) This Workbook works on shares from many exchanges. Supplied by Yahoo! Finance - Click here to see them You can mix them, as shown in the example below. The shares with the AX after them are ASX listed shares and the ones without the extension (the Suffix) are listed on the NYSE.
The workbook then builds charts and the user can change the parameters. For example, Gerald Appel the inventor of the MACD suggests that the parameters 29, 12, 9 should be used for long-term trades, but for shorter term trades 17, 8, 9 could be used. All the charts on this workbook have cells, which easily allow parameter and chart changes.
I have built the charts as a visual indication of the shares movement. But the Workbook also has algorithms to give Buy and Sell signals, based on the charts. See more on Indicators and Charts I have a trading summary page, a portion of which is shown below.
Suggestions pop up, based on the criteria I have set, at which time I can look at the worksheet containing the share charts and make a decision. This helps to identify trades as they are happening, that is, every time I update my data.
This starts the Macro that does the business. The Workbook, Worksheets, how the formulae
are written, the macros and the algorithms that prompt me to trade
are all explained in the E Book, which I called If you're not all that familiar with Excel, I even explain how I use Excel to do what I wanted. Unlike
most systems, this one has no protection. Actually its not really a system, it's the way I trade by numbers. See what's in the Excel Help part of the E-Book
Before you go any further, I suggest you take a few minutes and browse the following site.
Check out FIDO and see the Warnings Section This is not to turn you off, but be aware. You may ask what's Stock trading has to do with Options. Well as the Options are directly connected to the Stock, you must know about Stock trading before you can trade Options I am an active trader, usually hold my positions for a few days. I can't imagine making money by using buy and hold strategies. But I have held shares for over a month. The way I pick my trades allows for short term trading, swing trading, momentum trading and long term trading. I have even day traded. That's why I called the E Book Daily OPTIONS Trading (DOT). You must be prepared to monitor your open positions on a regular basis - Stock daily, Options at least every few hours. Stock and Option trading is not rocket science, in fact neither is using Charts for Technical Analysis of stocks. The data used by charts is the Open, High, Low, Close prices and Volume of a share per day. Statistical methods such as averages are applied and we have indicators, which are put on a chart. There are literally hundreds of indicators, and since computers came about, you can buy as many black box systems as there are indicators. The important thing is not to mush your brain running around the web, ending up with a toilet roll of share site favourites and still no idea on where or how to start. I only use 4 indicators and these allow me to make good trades. You need to only be 60% right and have a good money management system to make money at this game. If you're not looking at trading to make money, then stop looking at these types of sites. But if you are serious about making money from the stock exchange, remember it is a gamble. It's like betting on horses, analyse the form and put on the bet, but unlike a horse race, here you can get off, if it's not going your way. STOP LOSS I believe if you are given a starting point, you will develop your own style and I think that this book and Excel Workbook will allow you to do just that. I explain what I have done as an active trader, & explain the Excel book in detail. All my trading to date has mostly been on line, except when I started trading options, I used a real broker (a bit painful), now I do it all on line. If you are interested in starting out, I think this will give you a good start. If you are a professional trader, what are you doing here? The most common question I am asked, is how much do you need to trade. The quick answer is around $10,000.00 (AU). You should know, that you need to buy 10,000 of something that will rise by 1 cent to make $100.00 (That should cover the Buy and Sell brokerage costs). No I haven't made millions using my ideas, but I am better off than most, as a result of trading this way. Although the ideas presented here describe share trading, I mainly trade in ETO's (Exchange Traded Options - also in the book). The reason is simple. As I stated before, you need to buy 10,000 of something that will rise by 1 cent to make $100.00. Position Sizing - depending on the trading bank size and the risk, I trade in 10,000 lots. In the example below NCM5R was the Call option for the underlying share NCM (NEWCREST MINING.)
On the 18 May 05 NCM was trading at $13.65 - Buy 10000 = $136,500.00 On the 20 May 05 NCM was trading at $14.30 - Sell 10000 = $143,000.00 Profit = ($6500 - Brokerage) = $6410.00 that's 4.7% Can you afford the $136,500.00 for a trade? The option over the same time: - the outlay was $2,646.15 and the profit $2,207.70 that's 83% and I could sleep over those few nights. My maximum risk was $2,646.15, if I didn't sell the option and let it expire, that's all I could lose. A usual blue sky is the maximum return. You should notice that not all trades are wins, but by applying an automated STOP LOSS you can cut your losses early enough, to make a profit.
Disclaimer The content made available in this book is not intended to be used as the basis for making any investment decision. You are solely responsible for any use you choose to make of this information. It does not provide investment advice or make securities recommendations.
Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
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