Options Trading Tutorial
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Question by Dustin Y: Where to start with stock trading?
I am currently a university student interested in low-risk, low-reward stock options. I am not planning on investing more than a few hundred dollars at most. I merely want to “learn the ropes” if you will.
With this being said, I have no prior education in stock trading and have no idea where to start. I know there are plenty of online services out there, but I don’t know which one to pick.
Where should I start with stock trading?
Best answer:
Answer by Irv S
Providing you don’t bet more than you can afford to lose,
open a Scwab account and have at it.
‘You DO realize that stock options are leveraged and you are risking
a lot more than the cash you put up right?
Those ‘options’ are contracts that can impose an obligation.
(I do know one man who actually got ’stuck’ with a contract.)
What do you think? Answer below!
Below is a list of the top traits of successful investors and options traders.
They Are Properly Capitalized - A very easy mistake for beginner traders is not being properly capitalized. Beginners see the leverage option trading offers and think they can turn ,000 into ,000 in a matter of weeks. Before long, a couple of losing trades have completely wiped out their capital.
They Have A Low Tolerance For Risk - Successful option traders also have a low appetite for risk. The best traders will only trade when there is a low risk high reward scenario. They like to have the odds skewed in their favor as far as possible. The best option traders will not try to hit home runs with every trade.
Trades Only When The Market Provides An Opportunity - One quality all great traders have is patience. Successful investors will only enter into trades when the odds are stacked in their favor. They would much rather be the house rather than the average guy on the street trying to win big. They are focused on the bigger picture and are willing to wait and have the patience to only trade when the right opportunity presents itself. Some of the best traders often talk about sitting idle and just watching the markets, waiting for the perfect time to make a trade. Beginner investors find it difficult to not trade and are enthralled by all the green and red numbers on their screen and feel like they are missing out on the action.
They Have A Trading Plan – Before opening an account, everyone needs to have a trading plan. This shouldn’t just be in your head either, you need to write it down! By writing it down, it is distinctly defined and you can refer back to it at any moment. It will also seem more real if you write it down and you’ll be much more likely to abide by it. In order to be successful you need to have a plan and think things through rather than just flying by the seat of your pants.
They Have A Risk Management Plan - Only trade with what you can afford, don’t risk money you can’t afford to lose. Trade conservatively, rather than think of what you can make, every time you place a trade, think about the worst case scenario. What you could lose and how you are going to handle the position if things go badly? Amateur traders have trouble getting a grip on how much to risk on each trade. When starting out you shouldn’t have 90% of your capital tied up in one trade. Another good risk management rule is to set a fixed percentage of you capital as your risk per trade. A common approach would be to set 5% as the maximum capital to risk per trade, but for beginners you could make that even lower. Once a trade is placed you need to be vigilant at monitor risk levels, you can’t just have a set and forget policy, you have to stay focused on your positions and your total portfolio risk. Having a risk management plan is crucial to success as a trader and something that should be done before you start trading.
They Can Control Emotions – Options trading is an incredibly emotional experience and one that you cannot fully realize until you have your own hard earned money at risk. The great traders are able to control their emotions not just when times are bad, but more importantly when times are good. The best traders can keep their ego out of the equation and stay grounded even in the midst of fantastic winning periods. In addition, when one of their trades turns out to be a loser, they are able to admit they were wrong and close out the trade. The best traders never get attached to a trade or a certain stock. A bad trade could turn out to ok, but sticking to your pre-defined trading rules is critical. You should always stick to your trading rules and keep your emotions out of it.
They Are Incredibly Disciplined – Successful investing takes a great deal of discipline. Amateur traders may find it very difficult to just sit and wait for a good opportunity to trade. Waiting for the right opportunities may mean you don’t trade for a few weeks, but trading out of boredom or excitement is one of the worst things you can do.
Having a money management and a risk management plan is one thing, but in order to be a great trader, you have to have the discipline to stick to it.
They Are Focused – For beginner options traders it is very easy to get carried away and become energized by all the green P&L numbers on their account screen. Keeping a level head is crucial. It can also be hard to stay focused when there is so much news on the markets and so many experts, each with a different opinion. The most important aspect is to stay focused on your goals, your trading strategy and your rules. Don’t try to copy someone else’s trades or go against your trading rules just because of something Jim Cramer said. Get to know yourself as a trader as well, if you find yourself losing focus, or getting too distracted and stressed with everything going on, it can be a wise move to close out all of your positions and take break for a while. Sometimes that is the best approach and will allow you to come back with a clear head, more relaxed and more focused.
They Are Committed - Options trading involves a great deal of commitment. Any time you have your own capital at risk, you should be aiming to get the most out of your investment strategies and controlling your risk. You need to be on top of your things all the time. When you stop paying attention to the market, you will get burned. You need to be staying abreast of the current news, market cycles and investment outlook. If you’re a beginner options trader and find you’re struggling with the commitment required to keep up to date with the market, or find you are suffering from information overload, there are many sites out there that provide great summaries of current market conditions.
They Have Back Tested Their Strategy - Backtesting is a key part of establishing your options trading plan. This involves checking your trading strategy against the market to check the past performance. The average investor may not have the capabilities to run these calculations on their own but there are a number of software providers out there that will be able to perform backtesting. Most brokers such as TD Ameritrade have backtesting software that is free to account holders. Backtesting allows you to evaluate the pros and cons of your strategy and also provides scope for improvement or alteration of your strategy. However, a few things to consider are:
* Make sure you are using an appropriate time period
* Take into account sectors
* Take into account commissions
* Past performance may not be a good guide to the future
For further information visit Options Trading IQ.
Start trading: This how-to video shows what steps you need to take to start trading from your new direct access stocks and options account. Questrade, an online Canadian brokerage is known for the .95 stock trade — the best trade commissions in Canada. This is the first in a series of how-to videos that will guide you to a better online trading experience.
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marketheist.com – OptionsANIMAL founder Greg Jensen answers some of my questions about his book “Spread Trading: An introduction to Trading Options in Nine Simple Steps.” (see our book review of “Spread Trading”). Greg explains his unique approach of writing this book in story form, explaining several times in this interview that most books are written like textbooks with lots of information but do not bring the markets to life. By taking readers through the “journey” of learning to trade stocks and options, Greg hopes it can get readers more interested in taking control of their financial destinies. Just as Lori Ann LaRocco mentioned in her interview with us (marketheist.com Greg believes people must educate themselves about their finances and investments because no one has more riding on your financial well-being than yourself. See our previous interview with Greg and his journey to becoming a successful options investor: marketheist.com Get “Spread Trading” by Greg Jensen: marketheist.com Learn from Greg’s OptionsAnimal.com: optionsanimal.com Follow Greg on Twitter @optionsanimal Follow us on twitter: @marketHEIST @JeffreyLin
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Cleansing Salad with Pepper Cups
Image by Barry Gourmet and Raw
Breakfast or Lunch Approx: 10 min. serves one
Cleansing Salad with Pepper Cups
“This delicious RAW rainbow of colors,of Green,Red,Orange,Yellow, and Purple will have you covered for high antioxidant and phyto nutrient support for your immunity and cleansing protocol.”
Ingredients for Cleansing Salad:
Your favorite fresh Leafy Greens around the house? I chose Water Cress, Chinese Spinach,and Red Oak Leaf, in equal parts about 2 cups.
A few Cherrie Tomatoes (Organic)
One Beat Root
One Medium Carrot
Ingredients for Cleansing Vinaigrette:
On stand by all in glass 100 % Organic
Cold pressed Extra Virgin Olive Oil
Wet pressed Virgin Coconut Oil and centrifugally extracted
Cold pressed Raw & unfiltered Apple Cider Vinegar with Mother of Vinegar
Raw unfiltered Honey
Bee Pollen (Natures Mineral and Vitamin Supplement)
Lemon or Lime Juice
Ingredients for Cleansing Pepper Cups:
1 Hand size Sweet Red Bell Pepper (Organic)
1 Haas Avocado
1 cob of Corn (Organic)
1 half Onion (Medium Size)
2 garlic cloves
A hand full of Your favorite unsalted Nuts of , Whole Almonds with skins ( If you soaked them over night and rinsed them out in the morning you have Sprouted Almonds.
Or you can use any nut such as Walnut, Cashew,Chestnut,Brazil,Hazel,Pine,Pecan,Pistachio, or even Peanut which is really classified as a Legume or Bean.
On stand by your favorite green SUPER FOOD such as , Spirulina, Chlorella, Kelp,Sea Weed combinations, Wheat or Barely Grass, or any mixed reputable whole food Green Super Food Powder that has no fillers in it.
Extra Virgin Olive Oil Cold Pressed
¼ Cup of loose fresh Mint herb
On stand by have the following Shaker Options at the ready ! (Organic is Best)
Red Chili Powder (Hot & Spicy)
Garlic Powder (Pungent)
Ginger Powder (Sweet Savory)
Mustard Powder (Hot Sharp)
Wasabi Powder (Hot Sharp)
Sea Salt Powder (Salty)
Black Pepper Powder (Pungent)
“ Please do not worry I am not going to force you to use all of the above powders at one time!”
On stand by have the following Liquid Options at the ready!
Lemon or Lime Juice (Sour)
Sole ( Pink Himalayan Sea Salt Crystal that is dissolved in pure water) (Salty)
Cleansing Salad Method :
On your cutting board chop your selected leafy greens into small pieces and place in a large mixing bowl for tossing.
Add your diced Beats and Carrots with Cherrie tomato and put bowl aside.
Cleansing Vinaigrette Method:
In a separate mixing bowl add the following ingredients:
1 table spoon Cold Pressed Extra Virgin Olive Oil
1 table spoon Cold Pressed Virgin Coconut Oil
1 tea spoon Cold Pressed Raw Apple Cider Vinegar
1 tea spoon unfiltered Raw Honey
1 tea spoon Lemon or Lime Juice
1 tea spoon Bee Pollen
1 level tea spoon of your favorite Green Super Food?
Stir together and taste….. What do you think? Savory ? Brings a Smile to your Face? It did for me and since all people have different taste buds you are allowed to make adjustments to your liking . You are the Gourmet of Your Kitchen.
Cleansing Pepper Cups Method:
On your cutting board split the Sweet Red Bell Pepper in 2 parts down the middle.
Scrape out the seeds and flesh .( Discard or do what I do Compost and save seeds for planting)
With a pairing knife cut V shapes around the edges of the 2 Bell Pepper Cups.
Do not discard the V shaped little pepper shapes , you can toss them in your Salad Bowl with Greens. ( Nothing should go to waste in your Earth Kitchen)
Put your newly decorated Pepper Cups aside to make the chutney style filling.
Chutney style Filling:
Cut ,peal and spoon the flesh of your Avocado into a medium size mixing bowl and squash the fruit down with a fork. ( Discard the Pit)
On your cutting board , with a knife slice down ward ,turning the cob as you cut the raw kernels downward and across the board. Split the pile of kernels in half and add that half to your salad bowl greens to join the previously V shaped pieces of Peppers.
Divide again the pile of corn kernels into 2 parts , then add that part to the mixing bowl of your mashed Avocado.
Then on on your cutting board chop very finely the fresh Mint Herb and divide into 2 parts.
Mix in the one part Mint with your Corn kernels and mashed Avocado.
Add your selected whole nuts or you can elect to chop them smaller for that nutty flavor.
Less will give you a more creamy paste and more will give you that crunchy nutty flavor , its your call? “I like the nutty option myself “!
Add in your finely chopped half medium onion and 2 garlic cloves.
If you wish to thin down your Chutney paste ,then just add a little Olive Oil for this and keep mixing. Now taste it …… What do you think ? How do you Feel ?
Believe it or not the whole Avocado used seemed to have neutralized the pungency of even the 2 garlic gloves and half onion, but the added fresh Mint Herb added some savory taste with the sweet corn kernels. The texture and nutty flavor is there of course , but other wise the Chutney
filling is rather bland to my taste , but could be fine for you ?
This is where it gets interesting. For me I like that Hot Spicy taste , so with my arsenal of powdered cleansing herbs I add a dash of Red Chile Powder and Garlic & a small pinch of Mustered and stir it in until I got it just right.
I enjoy a sour sweetness to my foods so I added raw unfiltered Honey and Lime Juice to taste.
After you have achieved your combination taste , then spoon the filling into your decorated Sweet Red Bell Pepper Cups on a serving plate.
On the surface filling of each Pepper Cup add an island of corn kernels surrounded by a sea of your finely chopped fresh Mint herb.
Pour your vinaigrette dressing into your salad and toss then spoon into your serving salad bowl.
Complement your Cleansing Salad with Pepper Cups with your favorite Lemon or Lime drink or do what I do if you live like I do in the tropics for convenience.
I pour fresh Coconut Water into my Cup with a squeeze of Lime,Orange and Raw Honey.
“Very refreshing and Alkaline for your body enjoy”
Barry Gourmet & Raw
Nutritional Information:
This RAW Cleansing meal is very easily digested and nutrition is assimilated effectively into your body with all the Enzymes , Good Fats,and Proteins intact from these Living Foods. It is scientifically proven that a Vegetarian Based diet that is rich in raw foods will assist you for effective weight loss, I know because I did it for one year to cut my body weight all most in half.
It is very important to eat this hydrating , high fiber meal (Fiber Supports the Liver) slowly and thoroughly as digestion starts in the mouth to break down the complex carbohydrates . We don’t want to be rushed at the table ,even though it takes only about 10 minutes to make this wonderful Cleansing Meal, which is a good thing.
I must add that this Cleansing meal is also anti -inflammatory with out the meat Purines to help you with any Gout or Arthritis condition. I was once afflicted with gout and arthritis myself many years ago and when I slowly changed to a plant based diet , these symptoms are no longer in my life.
About the unrefined Oils ,Nuts and Avocado ,the Good Fats:
We need certain FATS like the ones in this Cleansing Salad to help the Fat Soluble Vitamins A,D,E,and K to be absorbed by our bodies fat reserves. The Fats in this Cleansing Salad are Essential ( Meaning we cannot make it our selves and we must get it from out side foods)consisting primarily of Omega 3 fatty acids found mostly in whole unrefined oils, nuts, seeds,Sprouts, Avocado and in some of my other recipes as well ,with oily cold water fish such as wild Salmon, Sardines,Mackerel ,Tuna and other seafoods of non predatory nature, that are placed lower on the marine food chain.It is important to note that Sea vegetables such as the Super Green Food Spirulina is providing a massive amount of mineral nutrition including Iodine that is less available on land with our unsustainable agricultural practices of mono cropping.( This is why the refined Salt industry is putting iodine into their salt product, because it is missing a lot or deficient on our land based produce. )It is common practice with Organic farmers in America to amend their soils with sea vegetables to put back needed Calcium, Magnesium ,Iodine, and other trace minerals to help replenish our top soils that in return feed the plants that we in return consume. Iodine is a nonmetallic black crystal element that in trace amounts is essential for the health of our brain functions.
All Ocean sea weeds are a great source of essential iodine for your body and that is why I included this ingredient into the Cleansing Salad from sources of Super Green Foods from the sea.
One other Super Food from Nature that I would include in your life for supreme nutrition would be Bee Pollen.
The pollen is a fine spore grain that flowers produce to in huge quantity to entice honey bees , butterflies , and other insects to feed on ,and to transport to other flowers for cross reproduction. This food from Nature has been used by man for centuries and contains a broad spectrum of trace minerals and vitamins that I use personally for additional support for my immunity and good health.
About the Water Soluble Vitamins in this Cleansing Salad is many. This Salad is very high in Vitamin C from the Greens and Red Peppers. The color Red is normally very high in C but destroyed by cooking. This salad provides a lot of the B vitamins as well. The Super Green foods, plus the Bee Pollen provided from NATURE will help provide additional nutritional Vitamin and Mineral support for the cells in your body.
“Experience the Gourmet in YOU “
Why do I go out of my way to list certain Foods to be Organic on my Recipes?
You probably noticed that for some of the ingredients I list in (brackets ) the word Organic is listed. Why would I do this you may think? Well I have done a lot of research on the subject and later discovered after many years of study that the intensive , and unsustainable farming practices today has effectively stripped a lot of our foods vitamin and mineral base , and further depleted our top soils with chemical fertilizers and pesticides to combat disease and insect infestations of our food crops.
There is a very important point behind all this .
I know that most people do not want to hear this , but the TRUTH needs to be spelled out and addressed so that consumers can take necessary precautions to limit their exposure to certain foods that are treated with chemical pesticides.
The Truth is that all living things including our selves , and the Vegetable Kingdom of Fruits ,Vegetables ,and Grains are all SYSTEMIC.
Systemic meaning that the roots of any plant will absorb the good and the bad such as pesticide Chemical residue into the internal cells of the plant through the plants root systems. So this means that all the washing , scrubbing , and cleaning will not help us at all to get rid of of the plants toxin.If I can use this analogy, Its like how our own skin functions , such as letting the hormone Vitamin D absorb into our body from the sun. But the D will be blocked by Sun screen lotion applied to our skin and like Vitamin D will be absorbed into our body.But again our skin will release fluid salts and waste materials through our skins pores when we sweat ,and perspire toxins out to dissipate, so plants are the same way we are, with incoming and out going exchange of materials good and bad.
The BioTech industry knows very well that the root systems of all plants absorb everything attainable from the soils, so the agribusiness scientists over the years have developed many delivery systems to help the host plant take up the pesticide through its root systems to make the edible plant more pest resistant. But the problem with this playing with Nature Protocol is now backfiring on us , as the target insect , or pest develops immunity over time and new ,and much more stronger toxic chemicals are being developed,over time to try and stay ahead of the
problem. When will this dangerous but short term profitable Mono Factory Farm practice ever end?
As we know today , it is all most impossible to find a grocery store that stores and sells everything 100% Organic. Most stores will have some items , but in most cases most of the fruits and vegetables are conventionally treated with chemicals, so what can one do?
First I need to point out that , and not a whole lot of people that I talked to know about this. And that is most of the agricultural fat soluble pesticide residues are found in the fatty flesh of animal and less in the fruits and vegetables. Simply put , our crops are less exposed to the treatment with shorter growing seasons compared to a cow that lives 30 years longer than a plant. Alot of the feed that is growing for livestock consumption is GMO ( Genetically Modified Organisms. ) These crops are Soy, Corn, Rapeseed/Canola,Sugar Beets,Rice,Cotton,Dairy,Aspartame/Artificial Sweetener,Papayas,Farm raised Salmon and many processed packaged food items, from the giant food manufacturers with confusing labels that take all day to read.Yes people will say that going Organic is more expensive , but is it really?
Organic farming is more labour intensive to amend the soils , and to harvest the bounty ,and today every farm that wants to make the change over to Organic is required by Law to let the land heal and settle into a more natural state then 3rd party inspections are enforced to Certify the produce. So it is understandable why Organic Fruits, Vegetables, Seeds , and Nuts will cost more. But the trade off in my mind is worth it as ,after all its something we put into our body, and I love to eat the edible skins where most of the nutrition is held anyway.
Farmers markets and buying locally is also a good idea as well.
So this fact compels me to post a list of what foods are contaminated and what foods are more safe to eat if its conventional. I cannot think of a more authoritative source than Environmental Working Group EWG.
Regards Barry Gourmet & Raw
EWG’S SHOPPER’S GUIDE TO PESTICIDES Trade Mark Owned by EWG
DIRTY DOZEN By These Organic
Worst
1 Celery 2 Peaches 3 Strawberries 4 Apples 5 Blueberries
6 Nectarines 7 Bell Peppers 8 Spinach 9 Cherries
10 Kale/ Collard Greens 11 Potatoes 12 Grapes (Imported)
CLEAN 15 Lowest in Pesticides
Best
1 Onions 2 Avacoco 3 Sweet Corn 4 Pineapple 5 Mangos 6 Sweet Peas 7 Asparagus 8 Kiwi
9 Cabbage 10 Eggplant 11 Cantaloupe 12 Watermelon 13 Grapefruit 14 Sweet Potato
15 Honeydew Melon
List Resources: Environmental Working Group www.foodnews.org
Comment from Barry Gourmet & Raw:
This list provide by the Environmental Working Group is more comprehensive if you visit their website at www.foodnews.org
This list is valuable information to inform you about the pesticide load on certain foods to help you to make informed decisions and to reduce your exposure. But over all it is still wise to eat a wide variety of fresh Fruits and Vegetables more and to limit or reduce your intake of packaged processed goods.
