Fortune Hunters Run Away!

1

Options Trading

It is not 2005 anymore…

It is not 2005 anymore, when you could buy anything on the stock market, you practically could not lose, because everything increased. We live in very different times, and ignoring this fact can be fatal!I will say in advance that I do not want to scare anyone, I just want to share my experience of the past 10 years and how I see the trading today, based on this.

2

There is no quick money!

Unfortunately, I receive many mails even today saying that "Gery, I have € 300 saved, do you think I should start trading binary options with it, because I saw on youtube, how easily we can make money with 60-second (!!!)options? ". What do you think is my answer to that question? My answer is NO WAY, it is guaranteed that you will fail.

3

There is no quick money!

If all your saved money is € 300, buy books and knowledge rather than risk it on a new online casino called binary options. The only thing that always pays off is investing into knowledge and the development of yourself, but that's another topic.Even today, incredibly, many people believe naively in getting rich quick on the stock exchange. That does not exist. Period.

4

There is a huge amount of scams on the Internet!

The Internet is full of a variety of "successful" strategies. Always beware of brokerage firms who advertise “good” things to you, the robot, the binary strategy. They want to take your money! Their goal is to make you open an account with that firm and lose all your money, especially if they are dealing desk brokers. Since I mentioned the 1-minute successful options strategy above, let's take a closer look at it.

5

There is a huge amount of scams on the Internet!

The level of one-minute price movement is very close to the predictability of the movement of chaos theory fractals, therefore it cannot be guessed at all. What kind of technical or fundamental analysis could tell you if the EUR/USD will go up or down in a 1 minute? There's nobody and nothing in the world who could tell you that for sure. Of course, you can bet on it, this is a good business, especially for the brokerage firms who are working with a 70/100 payout ratio.I beg you not to fall for these! There is no profitable 1-minute strategy for options!

6

However, the black swans are alive

I have written a lot about the black swan phenomenon, so I will not repeat it here, I would rather bring a few examples from the recent past.

For simplicity, let's just look at swans (except CHF), where the price movement was very fast and almost no stop would have been able to protect you, only risk management with options!

7

31/10/2014 - EUR / JPY

A move over 300 points after the intervention of the Bank of Japan.

8

15/10/2014 - /ZB

A movement over 500 points in the US 30-year government bond within a day. During the crisis, there was never such a big candle in this product. They never figured out what exactly caused the continuous increase.

9

25/02/2014 - /NG

Natural gas fell more than 30% in two days, until the /NGH4 futures product ran out and the weather settled down, or at least speculation ceased.

10

12/15/2014 - USD/RUB

A 40% rise in a day after the intervention of the Russian central bank.

11

06/05/2010 - SPY

Good old 'flash crash' in the S&P500 index. An 8% drop within a day, in almost a few ticks.

12

What is common in the above charts?

There is a vast movement, mostly unexpected, manipulative and difficult to handle. One thing is certain in these situations, the stop does not protect you because of the wide bid/ask and price jumps. But the maximum size of the account does not protect you, either. Many FX brokerage firms advertise that the customer's accounts cannot go negative, but now they demand the debt arisen from the SNB intervention from their customers.

13

What is common in the above charts?

As you can see, the above cases are not occurring in isolation. Except for the example of SPY, each came in 2014. As the money pump and the inability of the states and central banks grow, volatility and uncertainty will increase. You must prepare for this and be able to handle it. Remember, it is not 2005 anymore ...Many people traded in the delusion that their maximum loss is the size of their account. Unfortunately, this is not the case, the world could clearly see this in connection with the SNB case.The most important lesson is risk management!

14

Sound risk management

People who trade with 1:500 leverage on the FX market deserve their faiths! Your loss is unlimited in a simple leveraged FX spot transaction, regardless of whether you use stop or not !!!You can only survive a movement similar to that of the CHF on the FX market, if you had options, if you covered your transaction with options, you had warrants or your leverage was down at the 1:1 area.

15

What options remained for you?

If you do not want to lose your entire fortune, or even more than that, you have the following options:

You trade options on a covered way, even on the foreign exchange market.You buy FX warrants, the maximum risk of which is their cost, even in case of one option.When trading underlying products, you hedge with options, not with stop orders.

No other way remained, only the hope, but we saw that it is not profitable.

16

Where is your money?

If you're a novice, or even if you have traded for some time, it is worth examining, where your money is. If it is in an uncontrolled environment, in an offshore area, at companies of dubious origin, it is better to make a plan B as well. I would never transfer money to offshore areas, to for example, no-name binary options brokerage firms that were registered a few months ago, but have a very appealing marketing. I would not transfer money to a place where the minimum level of insurance of customer capital is not regulated by law.Obviously, these aspects are only important if you do not want to start treasure hunting with € 500 ...

17

Feel free to ask me!

18

Email: gery@optionsrules.comMy webpage: http://www.optionsrules.com/

You can find me:

Facebook: https://www.facebook.com/OptionsRules1

YouTube: https://www.youtube.com/user/optionsrules

Twitter: https://twitter.com/optionsrules

LinkedIn: http://hu.linkedin.com/pub/gery-nagy/6a/513/261

Skype: opcioguru