Then I found another website where I had the privilege of paying a so called “expert” $199 each for two months. This particular trader in my opinion doesn’t know how to trade safely or make high probability trades. When I started to emulate their style, not necessarily following their trades, but trades like they would make, I lost money 7 of the next 8 weeks. This style centered around putting on a credit spread, call or put, at about 2-3 days before expiration and letting the stock expire out of the money, if it did, which it didn’t most of the time, it was full profits! But for me, this system didn’t work because first, you actually are providing risk premium, whereas when you put a trade on with 45-60 days, the additional time to expiration provides you with additional premium and a much larger profit zone.
I had 2 experiences that I wish I could take back. One I was helping my wife at her school, judging a history fair when GOOGL decided to fall apart, and by fall apart it was probably like a 2% change, which when you trade 45 days out is no big deal, but at 2 days out, it’s everything. I stared at my phone, watching as my account went down and down and finally hit my max loss. I was very upset and still was in charge of helping judge the history fair. Neither my mind nor my heart were there that day because I didn’t know what I was doing and I was on my way to losing $800. The next time was Black Friday morning when my family and I went to the mall. I was stuck in my phone, by 10:30 it was about to die, just like my account as PCLN was going down and taking my account with it. It just managed to stay outside my short strikes and I think I had a scratch on that trade, but the stress was absolutely awful and I couldn’t be there once again for my family.
My final straw was when I knew (or at least I thought I knew) exactly what the market was going to do when the Fed raised rates late in the fourth quarter of 2016. I once again put on a ton of call ratio backspreads. My basis was that when the election happened, the market exploded up, when Brexit happened, the market exploded up, so of course any news makes the market go up, right? No, you’re wrong kid. While the market did go up, the explosive nature never happened and it may have even come down slightly. Either way, my account that started at $5000.15, I added another $1000 along the way was worth $1683 by the time I finally threw in the towel.