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Could I become at least a millionaire by age 23 by trading options using a “Straddle” strategy every time?

Question by William M: Could I become at least a millionaire by age 23 by trading options using a “Straddle” strategy every time?
I am 17 now, will be 18 in 2 months, I’ve read about all the different investment vehicles there are to make money. Because I live in the UK, I could trade CFDs (Contracts for Differences), but they don’t float my boat now. I’ve read into options trading, bought books, read blogs and articles on the subject, and I’ve been exploring into the many various strategies you can use to invest with and Straddles catch my eye. Straddles are strategies where in which you purchase a Long Call & Long Put with the same strike price, in which before the option has any value, the price of the stock must go strongly up or down. What I’d like to know is if I started with, say, £500 and tradeed stocks using Straddles every time, but once I made enough money, branched out and diversified my investment just to avoid losing everything, could I in 5 years, from age 18 to age 23, or as an alternative, by age 27 become a millionaire, and is this possible and has anybody ever done it in this short of time?

Best answer:

Answer by Jaminio
Straddles and their out of the money cousins Strangles, only work with high volatility underlyings as you use these strategies when you believe that the underlying will move by a large amount, but you don’t know which way (or you would just take the directional trade). First off, to make any money you need for the underlying to move by more than the premium before you can break even.
The problem with high volatility stocks is that this volatility is price into the option (Vega) and the higher the volatility, the more the option costs.

To be put into perspective, your £500 would buy you two options. Because of high cost of bank balance sheets and high Vega on stocks at the moment the average in the money option is running at around 15% premium. So for you to make any money overall, one leg of the option needs to move by 30% before you even break even.

This is a type of hedging strategy so will never make large amounts of money that you are thinking of, what you should do is study one or two areas of the AIM market and then trade CFD’s.

Being very honest, anyone who becomes a millionaire is very good at what they do. So the chances of you becoming a millionaire in the next 10 years through trading is very, very slim unless you are good at it.

Good luck and happy hunting

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THE “RIGHT” TARGET FOR EVERY TRADE !!!

www.daytradexpress.com Is the target of X number of pips significant on a trade?? Some thoughts for you to consider.

Uncovering The Winning Strategies Behind Every Successful Forex Trader

The route to trading Forex currency trading (FX) successfully involves many factors. Factors influencing the forex market are a country’s economy (which have an underlying effect on currency exchange rates), a government’s economic policies and monetary policies undertaken by the country’s central bank.  The daily macroeconomic events related to a country will also have an imapct on Forex trading.  Hence, it is a pre-requisite for traders to have a Forex Trading strategy in place as a fundamental to minimize losses and maximize profits.

The first forex strategy is to only invest in money you can afford to lose.  It is inmportant that you do not withdraw money from your retirement or saving accounts to fund your forex trade.  You should use surplus money for Forex trading as the market is speculative, which can lead to huge losses. Margin account trading is not always profitable and you are likely to pay more if you lose money in the trade. Out of the surplus funds, successful traders will usually allocate 20% to their trading capital as a first principle.

Your Forex trading strategy should also determine whether the market is moving upwards or downwards.  This can be determined through pre-trading. You should acquire knowledgeable to determine the length of the time period that the trend will continue through charting.  It is necessary that you understand the economic indicators influencing the direction of the Forex market. After determining the direction (bull/bear) of the Forex market, you can establish your entry and exit points in the trade.  You should always keep two exit points in Fx trade: the first exit point determines the point you will exit the trade if the trade goes up, and the second exit point determines the point you will exit trade if the trade goes down. In this way, you are able to setup profit protection and limit your losses in the same trade.

Paper trading is also one of the successful Fx trading strategies, where you can practice Fx trades using paper money in mock accounts without the risk of losing real money. In this way, you are able to practice through a paper account. This will provide you with good experience when trading in different market conditions. A common thumb of rule good traders usually adopt is to achieve successive paper trades for at least 3 months prior to commencing actual trading. This period will be the time to learn from mistakes and fine-tune the strategies in place.

You can also use forecasts of established Forex traders in the market.  Forex traders use tools such as 14-day RSI, Fibonacci retracement, MACD and exponential averages. These tools and indicators can be used to determine the entry and exit points in Fx trade. Established traders uses Forex indicators and Forex signals to determine their trading in the market.

Forex trading strategy also involves developing a plan which will allow you to make small changes without completely revamping strategy.  The plan should emphasize on taking advantage of market conditions and available market data for making decisions.

You should select a currency pair that you wish to trade, and the number of units for the trade. You should decide to buy or sell.  The trading is initiated through a market order or limit order. A market order starts Forex trade at current market price, whereas the limit order trade is initiated when the currency reaches a certain value.

You should decide on a time frame for Forex trading.  It is necessary that you decide whether to trade intra-day (short term trading), medium term or long term. The time frame and type of Forex trading will help you decide when you can undertake research and analysis.

It is necessary that you learn the basics of Forex trades before taking the leap into Forex trading.  Your emotions are your worst enemy, and many times you can avoid huge losses by curbing your emotions.

The best trader is usually the most calm and emotionless when it comes to trading. They already know their upside and have protected their downside through limit orders with the appropriate strategies in place.

Secret Forex Strategy that works Every Time

Do you wonder how successful forex traders make profit every time they enter into any trade? No matter what the market condition is, no matter rates are falling or rising they always manage to make profits. The secret of their success lies in the way they think and enter into any trade. If you understand how and when they make purchasing and selling decisions it is very easy for you to copy them and you too can make profit in every trade you make in forex.

Before looking into the secret strategy of successful traders let us first look at why most of the novice inexperienced traders miserably fail in forex market. If you notice around you will see that most of the traders have a mindset of ‘buy low and sell high’ notion. While it may be true but it will entirely depend on guessing and predicting the future.

No one can predict future 100% correct, let us face it. And so it is futile to attempt to predict how market will move in future. Buying on support point and selling on resistance levels can go wrong at least 8 times out of 10. The reason is several factors play a role in market movements. It’s just not possible for any expert to predict the market future movements.

It is for this reason that experienced smart traders don’t bother to predict the future. They rather try and follow the trend. Their strategy will be to ‘Buy High and Sell More High’, and this works every time. You need not to care why market is coming up or why market is coming down. Simply catch a point while rates are moving up and enter the trade and come out of it the moment you see you are making minimum profit.

Forex Trading Basics – 10 Facts About Forex Every Novice Trader Needs to Know to Win

If you are thinking about entering the exciting world of Forex trading, you need to know some Forex trading basics and the ones enclosed are essential for any novice trader, be aware of them or lose…

Here are your 10 facts and there in no order of importance – there all important!

1. Forex Trading is NOT easy

The fact you need to be aware of is that 95% of traders lose and to win you need to get the right Forex education and have confidence in what you are doing, to have the discipline to execute your plan for long term success. It’ not easy, that’s why 95% of traders lose. The good news is …

2. Anyone Can Learn to Trade

While most traders are too lazy to get the right Forex education, it’s a proven fact that anyone can learn to trade. This was proved in spectacular fashion by trader Richard Dennis, who taught a group of traders from all walks of life to trade in 14 days and they went on to make 100 million in just 4 years! Ok you may not make as much as this group – but the opportunity is there for everyone to succeed.

3. Beware of Forex Experts and Robots

They make me laugh – but many traders think there going to get rich for 100 bucks, alas life is not that simple. All these systems come with a lot of hype and a made up paper track record which won’t help you win in real time – Avoid them or lose!

4. You Don’t need to Work Hard to Win

While Forex trading is not easy, you don’t need to work hard, you need to work smart and learn Forex trading the right way. Take the example we gave you of the traders taught by Richard Dennis, they learned to trade in just 2 weeks!

5. You Don’t need to be intelligent or Clever

The best traders are not mathematicians or nerds, the biggest group of successful traders are ex card players and some of them are multi millionaires.

Sure they don’t know much about maths – but they know about the odds, taking losses and running profits and that’s why they win. Nothing clever, nothing flash just playing the odds for big gains and keeping losses small.

6. Keep It Simple

As you can gather from the above, simple systems work best, as Forex is an odds game. Complicated maths doesn’t work as markets don’t move to certainties, that’s why simple odds based systems are better so – keep it simple and win.

7. Prices Cannot be Predicted

Lots of people tell you that you need to predict to win – but this is rubbish!

Try it and your predictions will end up as accurate as your horoscope. The way to win, is to wait and trade the reality of price change on a Forex chart. Trade the truth not opinions.

8. Day Trading and Scalping Doesn’t Work

There are many who will tell you it does – but it doesn’t! The time period is to short. If you see a day trading track record, look at and you will see back test in hindsight.

Forex scalping or day trading is a mugs game pass it by.

9. Money Management is the Key

This is the ability to keep losses under control and this is really the key to making big gains. Many traders never really think about it – but over leverage and poor stop, or no stop placement, causes more accounts to be wiped out, than any other reason.

10. You Need Discipline to Apply Your Plan

To win at Forex trading the hardest part is having the mental discipline to execute your plan and keep going as the markets give you losses.

If you deviate from your system you have no system at all.

Mental discipline is built on confidence and self knowledge and is the big difference between winners and losers.

You Can Do It!

So the really message of this article is yes you can win but you have to put in effort, do it on your own and ignore the myths and experts and that say it’s easy.

While it’s not easy to win, if you approach Forex trading with the right attitude and get the right education, no other investment can offer you the chance to ear such a great income as Forex trading.

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Forex scalping tricks that work nearly every time

Last Chance!

Drop by today at either 1:00pm EST or 9:00pm EST to discover how Jason Fielder, Acclaimed Creator of the Delphi Scalper, ONLY ever take high probability trades.

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Sit back and watch as I demonstrate what separates a good trade from a bad one, a good time frame to trade v.s. poor one, a good risk to reward ratio compared to one you should never accept.

Jason will also be revealing some crazy bonuses as well, so it will well worth the time to be there…

And this will be his last day of webinars on scalping for a very long time!

See You In A Few Hours – and be prepared to take some notes, you’re going to learn a lot!

Jason Fielder, Acclaimed Creator of the Delphi Scalper noticed that he’s been receiving a lot of questions about how to improve trading accuracy. It seems that many traders are struggling to get over what he calls the trading “hump”. And what he means by that, is taking your trading from the point where you are randomly pulling pips out of the market…

To being able to do it consistently enough to count on growing your account over time.

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So based on the feedback he’s been getting and the flood of questions he’s been getting, Jason’s decided to hold a webinar this Thursday, where he’ll be revealing some of his latest and MOST powerful trading insights to help you with your trading right away.

In fact, he’s going to go as far as giving away his 4 most important trading secrets that made a monumental difference to HIS trading accuracy once HE began using them (and I dare say they will do the same for yours if you’re watching).

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So if you want to move forward with your accuracy and have a better idea of when to pull the trigger…If you’re looking for an easy way to know when NOT to enter the market…

Or if you’re simply looking to get a bit more of an edge…

Make SURE to drop by Thursday where he’ll be sharing a few of his greatest tricks that will help you to be prepared in these ever changing markets.

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5 Technical Analysis Stops That Every Trader Should Know

It has been said many times that is not important where you enter a trade, but where you exit that really counts.  This is very true in the fact that entry points can be profitable anywhere, if you get out at the right time.

Using technical analysis to mark your exit points will make your trading strategy that much more accurate.  Good stop losses will make it much easier to reach your trading goals and stop the dangerous cycle of drawdown and teach you to improve your trading.

Below horizontal support

It would be foolish to put a stop loss right at a horizontal support line.  Chances are that the security will bounce off the support line and continue upward slightly.  Many new traders, in an attempt to be ultraconservative, will put their stop losses right on top of horizontal support.  Horizontal support is one of the strongest support lines so putting your stop loss directly on the line makes simply zero sense.

Oscillator support

When the oscillators, such as the MACD or RSI, are reading very low numbers, it would be wise to place your stop loss closer to the current price.  The chance that a new wave of momentum will carry the price higher is greater, and thus, assuming more risk on a less risky investment would increase your chance for bigger losses.  Technical analysis oscillators are very good at picking bottoms; use them as a way to gauge future support areas.

Between a gap

Gaps are often underestimated for their power.  Strategies for gapping up work very well on the daily charts, as do strategies for gapping down.  Gaps usually represent horizontal support, although they may work with slanted trendlines.  Placing stops below a gap will lessen the chances of becoming stopped out, which will inevitably improve your trading.

200 period moving average

The 200 period moving average works very well as a support and resistance line.  Arguably, the most used moving average and possibly technical analysis indicator, the 200 day moving average works very well with the basic trading fundamentals.  If the price is above the 200 day moving average, expect plenty of support after a large drop.

Bollinger bands

If you don’t use Bollinger bands for any other purpose than support and resistance, you’re still getting your money’s worth.  Bollinger bands, even in the default setting, are great as support and resistance due largely to the numbers of people who use them.  Placing a stop loss below the current bottom Bollinger band line is a good way to protect yourself from an untimely exit.  Indeed, Bollinger bands are one of the best technical analysis assets available.

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