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Trading TipsNo Fancy Straddles Are Necessary |
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Direct Access Electronic Trading is a WYSIWYG system: What you see is what you get. It is not necessary to study the spots off any book, or to absorb and understand complicated mathematical formulas promulgating fancy year-end straddles, butterfly straddles, and other complicated trading techniques. While many of these ideas look good on the drafting board, they normally work only in theory. In point of fact, complicated option and alternative market strategies are difficult for the average person to establish at profitable spreads. Since the DAET trader is only taking a small position for a relatively short duration of time, there is normally no need to seek fancy but impractical positions geared for the long-term investor or trader. |
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Success in trading comes from internal beliefs in concepts such as detachment, patience, avoidance of loss, and discipline. There is no complicated system other than the market is going up (down) so I will buy (sell); or the market has gone up (down) far enough so I will sell (buy). The business of DAET is basically straightforward. You must sell at a higher price than you buy. |
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Many people ask me, "How many trades should I do each day?" This question is akin to how many pages are there in a book or how long is a rope? The number of trades you should do each day will depend upon your personality and abilities and be dictated by market opportunities. When you first begin, 10 round-trip trades a day may be enough. As you become more proficient, you will want to increase your number of trades. In order to objectify trading potential, the market opens at 9:30 a.m. and closes at 4 p.m. This totals only 390 minutes a day available for trading. My best trader once did about 420 trades in one day. Just for the record he was able to average about a quarter of a point of profit per trade and he earned about $87,000 for the day. This is a very active level of trading which is highly unusual today. |
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As I said above, for the first few weeks, you most certainly should focus on one or two of the most liquid high-cap, widely |
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