1/8 How to become profitable traders like institutions? (Answer at the end of the thread)
Why Institutional Traders are more profitable than Retailers?
Because they have a very good risk management and need to follow a strict discipline to survive in the industry.
2/8 If some institutional trader loses say 2% at the start of week itself, he can't trade for rest of the week and need to serve others.
If he loses for 3-4 weeks, he can't trade for next month.
And if he loses for 4-5 months, he will be fired.
3/8 So, institutional traders first priority is not profits but to stop losses and to preserve capital.
The fear of losing a job will make them more disciplined and the money management rules set by the corporate firm is so strong and they have to obey it.
4/8 On the other hand, most of the retailers performance is not known to anyone. They try to hide losses from family members and friends. If a retailer gets some profit, they will show to their friends but in case of losses they will keep with themselves.
5/8 And they dont have strict discipline and risk management rules because no one was there to question them.
They always try to recover losses immediately thus resulting in even more losses.
6/8 Now the main answer for how to become profitable like institutions?
Appoint a boss for yourself. Be it spouse or father or anyone whom you respect.
Come up with a strict risk management plan and tell them about the plan.
Daily show your profit/losses to the virtual boss.
7/8 If you lose a predefined money in a week, ask them to change password and they shouldn't give the account details until the cool off time set by you initially.
And tell them that if you lose a certain big amount, you will stop trading for atleast 1 year.
8/8 With this, you have a fear of not trading a year, discpline to follow risk management and a companion to give moral boost irrespective of your profits/losses
Follow it and see the results.
Best of luck :)
"Strategy is least important, risk management is the most."
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I am not against webinars, but the knowledge you get in reading a complete book is far better than attending a webinar.
As many of you were asking me the books to read, I am listing some of the books that cover option strategies, Greeks, Trading psychology, Risk management.
2/7
I suggest you to read 1 to 5 books first and then choose other books as per your interest.
I am giving amazon links for reference so that you can read the preview and decide, it doesn't mean that you need to purchase. You can always search the web for free pdf :)
3/7
1. The Option Trader Handbook: Strategies and Trade Adjustments amzn.to/3kQ8dEj
2. Option Volatility and Pricing: Advanced Trading Strategies and Techniques - Sheldon Natenberg amzn.to/3nIPHQd
1/n @asitbaran@Raghunath_TL@itjegan@PRSundar64 Saw Mr. Asit thread on option greeks saying it's very important.
But I believe, Greeks are required only for beginners to understand how options work. Correct me if I am wrong.
2/n Once you know about how options work, then no need to consider any greeks, everything comes default while taking/adjusting positions. And by seeing underlying option prices, you can know about all the so-called greeks. After all, Price is the KING.
3/n 1. You know in 4 days option value becomes 0 if the market is not moved. i.e theta 2. You know if the market moves up, ATM CE moves up too 0.5 times and ITM moves up by some factor say 0.7 and deep ITM moves by big factor say 0.9. i.e Delta