Market in a proper sense is like a casino where the chances of | Stocks expert

Market in a proper sense is like a casino where the chances of winning is skewed more towards the operator/professional trader than at retailers, traders and public who loses more than 90% of the time as they enter when the chances of their winning are only 50% because after their entering either the prices goes up or down. But because of their psychology their chances of losing becomes more than 90% because when the stock goes up they book profits very early and when it goes down they will stay invested till the draw down is deep and losses blossoms.

Consider a game of roulette where the odds are in favour of the house than in terms of players ie there are 18 red, 18 black and 2 green so if a player bets on red or black he has 18/38 ie 47.3% chances of winning than 52.6% in favour of the house so the casino has around 5% edge over the players. That is why casino always is the winner at the end and affords free drinks and food on the house. So in a market inorder to have an edge over others, the trader should have the probability of winning of more than 50% and the trader psychology is improved ie he keeps his target more than the sl ie for eg for a stock with cmp of 100 his sl would be 98 and target would be 104. In this case if his winning probability is 60% and a trader takes 10 trades in 20 days of a month with 1000 quantities each time so he will be winning 24,000 and losing 8,000 so his net winning will be 16,000

Similarly while playing in options the odds are very high in favour of those who are writing options instead of those buying the options. As per the statistics around 90-95% option buyers lose money.

So as a trader and personal investor I believe in selling options and earning money instead of buying options and waiting for a chance to hit a jackpot once in a while. I am planning to give covered option calls for my subscribers to notice.