Irrationally mad decision making to obtain the American Dream.

Starting again with $1000 to trade options with…

I begin again on my big school tuition journey funding my OptionsXpress account with $1000 to trade options with. The real question I ask myself is am I learning from my mistakes? Will I prevent myself from getting into bad trades? Will I wait for when everything is “right” and all “probabilities” are in my favor to trade a Call or Put option? I guess I’ll find out after trading over 20 $1000-2000 funded start trades. Actually more like less than 10 that I can think of.

My trading plan:

First I’m just going to let the money sit in there until I’m 100% certain a trade will work because the story of the market and stock should show and tell me when and how to trade a stock. Just waiting and not overtrading should help me, not that I over trade, but sometimes even only doing 1-3 trades a month feels like over trading.

Secondly I only deposited $1000 so I couldn’t trade a bigger trade then $1000. If I can’t double or triple my $1000 then I shouldn’t be trading anything larger such as a $5000 or $10000 trade.

Any profits larger than $1000 off the $1000 trade I’m going to withdraw them back into my bank account. Why? This will prevent me from trading more than a $1000 trade because knowing thyself I will trade bigger trades with my profits and likely blow them off. Keeping myself on a $1000 trades will in some way discipline myself (which taught) until I can master just trading $1000 constantly. I may only be able to by two contracts at a time. This is OKAY. I’m use to being cheap trying to make it rich and buying tons of contracts just to run out of time and lose all my money on one trade, which happens commonly.

If and that is a BIG if I can manage not to lose my $1000 on any trade I’ll just get good at trading small number of contracts until I know I’ve fixed many of my previous and ongoing mistakes.

Losses – If I’m only trading with $1000 I’ll have to cut my losses quickly or else I’ll have to fund my account again which I don’t ever want to have to do again. I want this $1000 to go and work very hard for a very long time. Since I’m still working it will be hard to sell out of the market so I will be using limit stops more often or not trade at all until I have a clear view of what thet market is doing and react to it.

I’ve traded $1000 into $10,000 and up to $40,000 within months so I believe I can do it again, except I will be keeping trades exactly at $1000 so I will only be able to see profits in my savings account which will go towards paying off debt. It would be really nice to see my account over $40,000 again, but that can wait. My goal is to just be able to not lose money and stay profitable trading in the money with at least 2 months of time like I know I should be doing, but haven’t been doing.

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2 responses

  1. Sounds like a good plan. You could also plan to take out half of the profits of any trade so you have some growth to look forward to. You’ve mentioned paper/simulation trading before. How has it gone? I am currently working on daytrading in simulation until I am sure I am consistently profitable.

    January 22, 2008 at 11:59 am

  2. thanks moom i really need the support of the new stimulus package trading plan! haha. I still plan on taking all the profits and putting them away so I am forced to stick to $1000 trades.

    I continue to paper trade. It does help you understand if you are right or wrong and sometimes you can understand why which is the hardest thing while trying to trade stocks.
    Stimulation trading supports real trades even if it is boring and time consuming.

    January 23, 2008 at 3:19 pm

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