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-----Original Message-----
From: Philip Schmitz <pschmi02@xxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, September 11, 1998 9:31 AM
Subject: Re: trades anyone?
>Nice point you're making here, Brent, and
>important for a less experienced trader like
>myself. What can be heaven in options, can be
>hairy in futures.
>
>> Kevin, I agree with the first part. I have a
>> comment about your trade. It
>> has been my experience that when extreme
>> volatility happens, many of the probabilities go
>> out the window. I usually decline to trade in
>> these
>> conditions now.
>
>This is productive. Tell us more. In concrete
>terms, when do you stand aside based on
>volatility? Can you post an example? Other than
>chart tracings that look like 8.5 on the Richter
>scale, what criteria do you apply to determine
>when a market 'doesn't make sense'?
Hi Philip,
All market conditions offer opportunities to profit (Ferenge Rule of
Acquisition # 101). For example, an option trader looks for high volatility
as an opportunity to sell options. The theory being that the extreme
volatility will return to normal allowing the seller to keep the premium.
It is important for a trader to develop a complete set of tools, but
this takes time. So until you develop methods to trade all market
conditions it may make sense to step aside.
Good luck and good trading,
Ray Raffurty
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