Choosing the Best Strategy

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Created: Tuesday, 05 August 2014 15:05

Written by OptionDave

One of the most popular questions I get at the conclusion of each Training Series is how a new Member should attack the Market. Some want to start off with multiple strategies in their toolbox. Others like to have one or two to focus on and master before moving forward.

So, what do I suggest is the best way to approach this? Well, as always I am not here to give specific investment advice, and I always encourage Traders to do their own due diligence. With that said, while I certainly believe that everyone is different, I have always been a proponent of mastering one strategy at a time. I guess the old adage “Jack of all trades, master of none” comes to mind here. Knowing a little bit about everything is certainly the best way to begin your trading career. However, once that foundation is laid, I believe it is time to build and the most effective way of doing this is one piece at a time.

The Training is designed to help us focus on all aspects of the Options World, and give a proper foundation for success moving forward. Once we have a foundation, it is much like building a house. What do you think would be the best way to construct a house: One wall at a time or work on all the walls and roof at the same time? Well, I am not contractor, but I think that mastering one thing at a time is probably the best and most efficient route. The same applies here.

For the beginning trader, mastering Calls and Puts is certainly the first step. Once we have those in our toolbox, Credit and Debit Spreads are the logical next step, then Calendars and Straddle/ Strangles, and then the advanced strategies. They typically build on one another anyways, so mastering the basic trades will make your efforts much easier when you are ready to tackle the advanced ones.

Now that we have that clear, the next question is which one is the “best strategy” to use? Well, that depends. I know, easy answer right? Well, when you think of all the different market conditions, all of the different types of Traders, etc. it is actually the only true answer. Rules based trading simply does not work. A one strategy approach to trading will never last over time. We have to think on our toes, be willing to mold with the market, change our approach when necessary, and only then will we realize true success. And this is all I want for ALL ETNtraders. No matter what your definition is, I wish you nothing but pure SUCCESS!

Happy Trading,

OptionDave

Upcoming Boot Camp Training

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Created: Wednesday, 09 July 2014 15:18

Written by OptionDave

Starting with this Friday's New Member Orientation, ETNtrade will begin another round of our popular Option Spread Trading Boot Camp Training Series.  This fantastic training will run July 15- 25 and will cover all aspects of option trading including Strategies, Risk Curve Analysis, the Greeks and most importantly the Psychology of Trading (to include Risk Management, Asset Allocation, Trading Plans, etc.).

Don't miss this opportunity to join us.  We will be hosting a Free Introduction Class this Thursday and we would love for you to join us.  You can simply click here to register: https://www2.gotomeeting.com/register/937532674.  On that class, we will cover the ETNtrade Trading System, put together some live trades and give you the opportunity to join us while saving $300 off the normal tuition rate for the Boot Camp. 

I hope to see you there!  Happy Trading,

OptionDave

May Expiration... Breaking Records

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Created: Thursday, 22 May 2014 02:03

Written by OptionDave

This has truly been a very special year so far here at ETNtrade. While we have always been able to show results that would be considered record breaking in most trading circles, this year we have taken it to a whole new level.

May was certainly no let down month for us… not by a long shot. For starters we had not 1 but 2 record breaking weeks during the May Expiration month. Obviously, that is a big reason why May was a record breaking month in itself. But calling it simply a record month would be a real understatement of what actually happened this month. Here is a rundown of the months highs, lows, records and results:

Our Mock Portfolio, which tracks every trade we give out during our Live Trading Sessions, started off the May Expiration month on 3/21 with a balance of $229,650. That in itself was quite impressive, seeing as we started the year at $100,000. But put on your seatbelt as I announce where the portfolio is currently valued. As of May Option Expiration on 5/16, the Mock Portfolio had a value of $468.829. That is an incredible $239,179 profit, or 104% Rate of Return!  Let’s break it down further.

For starters, we did 65 trades this month. 40 of those trades were winners; 25 trades were losers. That is a success rate of 62%. Not bad, but that is not what is important. What is most important is how big the winners were and how small the losers.

Our top winner of the month, and one of the best ever in the 5 year history of ETNtrade, was a 454% ROR Credit Spread on Disney. Our biggest loser, of course, was 100% as we sometimes have spreads that will go worthless. However, with good money management, these trades will not wipe us out, and they are easily offset by trades like the DIS one.

Some of the most successful trades we did were Credit Spreads, Debit Spreads, RICs and Iron Condors. Many of our Technical Analysis based trades performed very well, and comparing Priced In versus Average Move has netted us some great results on Earnings trades. We plan to continue this style of trading until the Market dictates a change. In the meantime, our hardest decision will be where to take our next vacation, and not what to do with our portfolio. It was a great month, but just wait until you see what we do in June!!!

Happy Trading,

OptionDave