Let me explain how I am trading currently. It is a limited risk trade, as long as you trade very volatile stocks, like the big banks. Usually it takes some time, 02/03 weeks for you to have profits:

- Buy options with at least 06 weeks to expiration from very volatile stocks

- I usually choose only ITM (in the money) Options

- The logic is to have 02 legs an make some calculation with their delta, in order to make them completely equal when you are buying

- You expect that any movement in one direction (or time decrease) will unbalance everything and you will have profits in the end

- Calculate the amount you will trade in the follow way:

Number_Call X Call_Price X (1+ Delta_Call)=Number_Put X Put_Price X (1+ Delta_Put)

Let’s say that in the end, you found:

Number_Call = 0.2 X Number_ Put …….So in this case, just multiply by 5 and you will have an even number, or:

5*Number_Call=1X Number_Put

AJVS

http://shankystechblog.blogspot.com/2009/05/vix-falling-wedge-double-bottom-and.html

Sorry you had that happen but your not alone. I also built up a hefty account during the nazdaq bubble and lost it all by doing exactly what you did. Got out of stocks for years until about a year and a half ago when I knew the economy was in trouble and the market would crash. I borrowed $10k from a credit card and over a year later built it to over $200k. You can come back but you have to treat it as investing and not gambling. I too lately have lost money during this run up. I even had it in my head that it could go to 915 but got impatient & bored sitting in cash and got in early. I purchased May puts and they are now pretty worthless so I took a huge hit to my account. But I learned from it. I wouldnt enter the market short until after the bank stress test rally exhausts which could be thurs or maybe early next week. We will see a correction but when you have gains right now you have to take them because the gov is pumping so much $ in the market that all the everyday people are jumping in not wanting to miss the boat. Also the market is such low volume that it is easy to manipulate right now. Once we retracement I see the market continuing up again. You have to play the trend for right now even though all the smart investors know the economy is crap. And thats okay because let them build up the s&p back up to 1000 to 1100 because later this year after we dont pull out of recession, more people losing jobs, businesses shut down, banks continueing to need $ to survive, the market will be on another down trend and we will get to take advantage of the s&p dropping from a higher point. Better for us. I honestly believe that once unemployment gets severely worse w/ more people losing jobs and everyone being taxed for everything, and the recovery they promise doesnt happen & leaves all the people in severe debt that there will be rioting that may cause capitulation. Remember cash is a position if you are unsure of the market. Dont give up yet because this is a once in a lifetime chance to make a ton of money as long as you dont make any more major mistakes like chasing stocks on the way down. Use stops and be patient. If you want to be safer, buy long term put options that expire in 10 or 11′, thats how I gained my $ is in long term puts and just waited for the crash. Its harder now because the stocks are cheaper but with them pushing the market up so high again looks like I’ll be able to do that stragegy again. Again, DONT GIVE UP!

I was so far down and that night when everyone thought that it had topped and was heading south I thought that it was the time to risk it all and try to get it back. I figured that even if it was short lived I would have at least gotten some of it back. Like every other time I buy a stock the market went the other way. I am a total loser.