How I Turned $10,437 into $111,669 in 13 months Trading Options Part Time

13か月の取引オプションパートタイムで$10,437を$111,669に変えた方法

My Story

I always wanted to be a trader. When I turned 18, the first thing I did was open a brokerage account and deposited $200 I had saved up from my allowance money.

I was investing in stocks, doing fundamental analysis, reading income statements and balance sheets, but a few months went by, and I realized you actually need a lot of money to make decent money with stocks. Naturally, I was losing motivation.

But then, I found options. And it has been a wild ride…

I remember my first trade: XOM weeklies. I watched them go to 0.

After that, I figured out it was easier paying for a signals service. They were day traders and traded weeklies. I was naive and a (very) dumb teenager who wanted to get rich quick, I had no idea of what risk management meant and a total disregard for it. A recipe for disaster.

I ended up losing $9,000 in a day. It was all I had. I was shaking. I remember going to Wendy’s and buying a Nutella Frosty and crying in the parking lot.

After that, a few months went by, and I came back with $2,000. I was determined to master options, studying heavily, and I ended up learning about spreads.

With my newly found knowledge about spreads, I doubled my account 2 months in a row, I was so happy. I was sure I was going to be rich. Looking back, that was a really nice period in my life, I went to the jewelry store, bought myself some gold jewelry, and I was listening to “I love the Dough” by Biggie and Jay-Z all the time.

Although I had found short term success, I still had not learned risk management. So, what do you think happened next? I lost all the profits I had made in just a single trade. It was AAPL earnings, I was so nervous I couldn’t sleep.

So after that I quit trading for a few months.

My freelancing business took off, and I was making more money than ever, but I wasn’t happy. I needed the thrill of trading options, so I went back.

I tried a few things: day trading, spreads, swing trading, alert services, technical analysis, The Strat…

I made a lot of money and lost a lot of money, and I can assure you: Every strategy, every type of analysis, trading style, everything there is, I’ve tried it.

Nothing worked for me until I found my current system…

And I was able to turn $10,437 into $111,669 in 13 months.

The System

I’m going to start with risk management because it’s the single most important thing in any system.

Position sizing and stop loss:

My size is around 9% of my account per trade. And I use a 25% stop loss.

This way, I’m only risking around 2% of my account per trade.

See the example below:

ACCOUNT SIZE: $5,000

POSITION SIZE: $450 (9% of account)

RISK: $112.50 (25% of position size)

Profit taking

I always take profits at 30%. Base hits add up.

Notes:

You will not be able to size exactly 9%, we’re talking about averages here. maybe you will lose or make more money than planned in some trades, but those % of your account are the averages you should be aiming for.

Additional risk management rules:

1. Don’t have 2 trades in the same sector. Sectors tend to move together. If you have calls on an airline stock, don’t buy calls on another airline stock, because they move together.

2. Try to have a balance between long and short positions, so if something happens overnight, you’re not overly exposed to just one side.

3. Zero emotions. Trade like a machine. Just execute the system. Money will come.

Trade Frequency

I try to make 3 trades per week, so 12 trades a month in total. (Sometimes there’s opportunity for more trades). But I try not to over-trade.

Let’s run the numbers:

My average win rate is 75%.

So on average, I win 9 out of 12 trades.

Using the same $5,000 account example:

AVG. Winners: ($450 x 30%) x 9 = $1,215

AVG. Losers: ($450 x 25%) x 3= $337.50

P&L: $1,215-$337.50 = $877.50

$877.50 on a $5,000 account is 17.5%.

I averaged a bit more over the last year, around 20%.

Your numbers will also probably look a bit different, but just to give you an idea: If you start with $5,000 and average 17.50% every month for a year, you will end up with $34,627.76.

The key to compound the gains is to always think in percentages, and of course, sticking to the system and its rules.

Again, you can do better, or you can do worse. This is just to give you an idea. Now let’s talk about how I find trades.

Finding trades

What I do is I follow smart money. In order to understand how the market works, you need to understand who the key market players are, because they are the ones who can move markets.

Smart Money — Hedge funds, institutional banks, proprietary trading firms, billionaires.

They accumulate and distribute large quantities of stock, and they determine the market sentiment.

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How I Turned $10,437 into $111,669 in 13 months Trading Options Part Time