Beginner Trader Making 50k in First Two Months

In this article I'd like to tell you about the success I had within my first two months of trading. If you want to know about options trading strategies in general, look for my other articles on the subject.

I started trading options on the Australian Stock Exchange end of March 2008. Well, that is not entirely true. I actually started trading on paper in December the year before. I tried to make that as real for me as possible. So, by the time I actually put real dollars into the market I had about 4 months of active trading experience. I was doing well on paper but you never know until you have to manage your own hard earned money.

I did my first "live" trade while I was on a business trip in Finland. I remember waking up completely jet lagged in 4am (which was about 2pm in Australia). I fired up my computer and scanned thought the stocks on my watch list. I found one that fit my rules, I called the broker and entered the trade. It was a bull call spread on AWC. It cost me around 9k to get in. I got out two days later for about 2k of profit or 21%. This was the first time I realized that the way I trade options actually works and that I could make some serious cash with it. I remember sitting in my hotel room, alone and still unshaven, literally exclaiming "Holy cow! This stuff works!".

In the next two months I went on a killing spree. I did about 30 trades like that, both bullish and bearish and only 2 were a loss. There was a bit of luck involved, I admit, because the market was benevolent. Still, I think that was a marvelous success for a beginner trader.

My system is actually very easy. It is purely technical which means that I don't follow fundamental information (e.g. earnings reports, P/E ratios and what have you). In fact, 2 weeks ago I actually stopped even reading the news. The amounts of information are confusing and the opinions of "experts" often contradict each other.

All I do is to look at charts! I try to follow the trend of a stock; I trade on breakouts from support and resistance. And I also pay attention to a few indicators such as RSI and bollinger bands (if you have no idea what I'm talking about look for my other articles or visit my blog). Looking through my watch list every day takes me about 45 min.

I hope you enjoyed my article on options trading.

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