Your Questions About Successful Trading

Lizzie asks…

How does one get into trading equities or commodities for a brokerage house?

After much thought, I have decided that this is what I would like to do. I’m not afraid to make a commitment and work hard for this. I self educated myself on this topic and have had a successful track record trading mostly energy and tech stocks. However, taking the plunge into a new career is a bit overwhelming. Does anyone have any idea of where to begin? I appreciate any and all input.

John answers:

Start with putting in a resume.
Provide the resume, a list of references and proof of your Bachelor’s degree in Business and you are on the way to getting the job you want.

If you don’t have a degree, your job opportunities will be much less since your prospective employer will want some kind of proof that you stick to a job, have the skills to complete the job and have been measured against some kind of academic standard.

Good luck.

Laura asks…

Looking for one tip to make a trade show successful?

It might be easy to organize a trade show but really difficult to make it successful. Can anyone come up with one tip to make a trade show successful?

John answers:

First of all, no one is going to shae their mailing list with you. It costs too much to create a good mailing list and that is a tightly held secret.

Like Buying a home or orating a business…it is always location, location, location. Something close to the entrance, where you can catch the eye of traders coming and going is a main key to a successful trade show. Location, combined with a desirable product and a knowledgeable staff, will give you 75% of what you need to be successful.’s the other 25%? Plain old luck.

Daniel asks…

persuasive speech : NAFTA is a successful trade agreement. can anyone tell me about the pros and cons?

im doing a speech on North American Free Trade Agreement. i dont know much about it and was wondering if someone could tell me the pros and cons about it. It would be greatly appreciated. =D
please help!

John answers:

See this article particularly the criticisms and controversies section

http://en.wikipedia.org/wiki/Nafta

Paul asks…

Does anyone have a somewhat reliable trading plan when trading basic calls and puts?

Looking for 5-10 important, key factors when trading basic calls and puts that have proven to be fairly successful when you trade options. My trading plan hasn’t worked very well. I seem to lose any gains that I’ve obtained. I can’t be consistent. Any good suggestions?? Would appreciate any helpful hints. thank you.

John answers:

I am not sure what you mean by “trading basic calls and puts.”

If you mean only taking simple, one-sided positions (such as selling puts on a stock because you think the stock price will go up) I doubt if there is a “somewhat reliable” trading plan. There are, however, some things I would suggest including:

o Keep positions small enough that a big adverse move in the stock price will not seriously damage your portfolio.

O Don’t worry about the current profit or loss when deciding if you want to close a position. Every day you decide to leave a position open instead of closing it you are essentially saying if you did not have the position already it is a position you would like to open today. If you would not want to open the position today it is time to sell an existing position.

O Make sure you know what all the risks associated with options are. The risks include all “the greeks” (Delta, Gamma, Vega, Theta and Rho) but also include other risks associated with events and markets. For example, it a company spun off another company after you had sold a call option on its stock, you will usually be required to deliver stock in both companies if the option is exercised.

O Do not assume that just because something has never happened in your trading experience that it cannot or will not happen in the future. Even if you find a stock that has gone up every April for the past 50 years that is no guarantee that it will go up next April. Similarly even the most remote risk in options trading will hurt you sometime if you make enough trades.

If “trading basic calls and puts” means avoiding any binary options, exotic options, flex options, and any other options that are not traded on an exchange, you can trade very much the same way market makers do, which is a “somewhat reliable” trading plan. Market makers have some advantages over you, such lower trading costs, but you also have some advantages over them. Most market makers try to profit from changes in volatility at least as much as they try to profit from changes in the stock price. You can do the same using spreads (multiple positions with the same underlying stock).

O Use spreads to keep delta and gamma close to zero. If they get too far away from zero adjust one or more position to bring them back toward zero.

O Theta can be your friend since about the only certainty in options is that time will pass, and the passage of time will have an impact on option prices. Try to take advantage of theta, but remember it may not be the most important factor.

O Concentrate on vega. If you think the current implied volatility is too high, you want to keep vega negative. If you think the current implied volatility is too low, you want to keep vega positive.

O Don’t worry about trying to squeeze the last five or ten cents profit out of a spread. Paying an extra 10 cents to substantially reduce risk is almost always a good choice.

O Don’t open an options position unless you are able to follow events in the markets, events in the company, and changes to greeks for the options. You don’t have to watch all day every day, but checking for major events once or twice a day can be very helpful.

O Remember that no plan can prevent losses all the time. Be prepared for ride through multiple losses in a short time period which will happen, but not too often.

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Of course I have no way of knowing how much you already know about options. Everything I said about “the greeks” may not mean anything to you. If that is true, obviously I would recommend you invest some time learning more about how options work.

“Options Volatility & Pricing” by Sheldon Natenberg is a great reference book for learning about the greeks and most of the things market makers do to control risks.

Edit:

I see another answer said

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Let me quote Natenberg:

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Betty asks…

How successful was the slave trade enterprise?

I need to write a paper on how successful the slave trade enterprise was… I have no idea how to answer this. Anyone know how this is suppose to be answered?

I’m not suppose to say “it was a successful venture” right?

Thanks for your help! 🙂

John answers:

It was VERY successful. There was little, or no risk involved, very little overhead, and if a slave died on the ocean trip, or anywhere before their sale, oh well! Very little money was wasted. The biggest threat, was other slave ships, trying to take over your load, on the High Seas. Along with disease, and an occasional revolt from the slaves. And yes, it is still going on today, in EVERY country.

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