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Successful Trading 101

With the Market and individual stocks as unpredictable as ever, it is often hard for Traders to find the right mix and balance of trade types that will allow them to profit and at the same time to avert risk in their portfolios.  At ETNtrade, we take a number of steps to ensure we do both of these on a consistent basis.

First step is to use proper asset allocation.  While many Traders feel the need to over-allocate themselves in positions, we maintain strict standards in our trading that allow for us to create 4-6% profits on our overall portfolio per trade, while never risking more than 2-8% of our overall portfolio. This allows for much more diverse trading, better probability for success, with much less stress, which is one of the most important necessities in proper trading.

Next, we diversify our trading strategies.  Many Traders get stuck in a pattern of trading that can lead them to high highs but even lower lows.  What I mean is that they pigeon hole themselves into a style of trading that may work well currently, but carries too much exposure to outside variables. For example, they might trade Out-of-the-Money Credit Spreads.  While this can be a somewhat effective way of trading (though I believe they are Alligator Trades for most Investors), they also carry immense risk if the Market were to make a dramatic move.  This can wipe away months or years of gains in a single moment. We never want to have that type of exposure. So, ETNtraders diversify. And I am not talking about doing more than one trade. I mean our strategy selection covers multiple stocks, sectors, directions, risk profiles and much more.

Lastly, we are very selective in our developing of our watch list. It is very important as Traders to take the time to lay out multiple opportunities and only take the best of the best. We start by developing a watch list of candidates every weekend that will ensure that we are only in stocks that actually have options, have plenty of open interest, have strike prices that make the trade customizable, and of course ensure that there is a catalyst which will potentially provide profits. Once we have done this, we work through that list and assign trades to each of them. Once we have 10-20 good trades, we select the 5-10 that are the absolute best and execute them. That is how a diligent, Elite Trader manages his/her trading day. And to top it all off, the numbers prove that it works. At the end of the day, that is all that matters: PROFITS!

Happy Trading,

OptionDave

The Holiday Season is Here Again!

The Holidays are upon us once again, and while many people are busy hosting guests, spending time with family, shopping for those bargain deals and putting together their New Year's Eve plans and resolutions, I want to remind you all not to neglect your portfolios!!!

For the last few years, we have seen a bit of a selloff in the final week of the year. This is often due to profit/loss taking by traders for the current tax year. While this may be a little different this year since the Market hit record highs, I would still be cautious as the time approaches. For the last year, we saw a dip in the Dow heading into the final trading days followed by a nice gap up after the 1st. I would look for that trend to possibly continue.

December has always been our best month at ETNtrade.  If you are not already on board, what are you waiting for.  The tuition is very reasonable and the Membership has more benefits than any other trading site out there.  Message me now or join us at one of the upcoming Live Trading Events by clicking the link in the right column of this page.  I look forward to trading with you all in 2019.

Happy Trading,

OptionDave

Welcome to Money Week!

Starting Wednesday, July 10, and running through next week, we will host a plethora of stock option live trading events, educational classes and opportunity-based online sessions.  Many of these webcasts are listed on our Calendar, however those that are Invite-Only require special access.

If you would like to join us for the public sessions, please click on the Calendar tab at the top of this page.  If you are interested in the sessions which are invite-only, please click Contact Us and request your links.

As always, we are here to help in any way with your investment needs.  Please do not hesitate to contact us with any questions, concerns or trade related issues.

Happy Money Week!

A Word of Caution!

On today's Live Trading Class, we noticed an anomaly across the boards on option pricing.  Not only was there a significantly higher than normal amount "priced in" on the ATM options, but also IV levels are scorching.  This is a sign of things to come.  Implied Volatility (IV) is the measurement of potential future movement, and when it increases, that typically means stocks are likley to drop.  While I am not trying to be a fear monger, nor do I have a crystal ball, I think it would be prudent to be cautious in this current environment.  The Market is telling us it is gearing up for a down move.  If it does, are you prepared?

Why Become an Options Spread Trader?

One of the greatest myths of investing is that in order for you to become a great trader, you have to be a great "stock picker".  However, this could not be farther from the truth. Actually, while most traders will own stock or funds in their portfolio, the best traders don't care about finding the perfect stock.  Why not?

Well, it is actually simpler than you might think.  I look at stock traders like I look at a person doing home repairs with only a hammer in their toolbox.  So, in order for them to be successful, they must find a nail.  Stock traders spend their entire time looking for the perfect nail (stock) to fit their only tool (buying shares).  Once you realize that there are thousands of other tools that one could have in their toolbox, your paradigm will change dramatically.

This is where options come in.  While even most option traders simply buy a Call or a Put depending on which way they believe the stock will move, the only way to truly succeed in the markets CONSISTANTLY is to learn to become a Spread Trader.  Spread Trading is the art of combining together multiple option trades (buying and selling calls and puts) to create strategies that can be used to profit on a stock NO MATTER WHAT IT DOES.  The best of the best learn ways to profit in multiple directions on the stock.

Do you want to learn how to do this?  If your answer is no, then I will tell you what I tell people all the time who do not have the time to learn, GET OUT.  Do not be the donator.  Those that do learn will always win. 

IF you said YES, you are ready to learn, we are here to help.  Attend one of the Free Classes listed on the right of this page.  Sign up for our free newsletter on the left.  Better yet, use the above CONTACT US button and let me know you are ready, and I will put together a plan with you that both fits your budget and your schedule.

The only person who can lift the anchor and set the sails is you.  Until then, you will be stuck in the same spot.  I am here to help you set sail, leave the harbor safely, and reach all of those dreams and goals you have set for yourself. 

Happy Trading,

OptionDave

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Next Free Webinar Event:

 The ETNtrade Trading System

Focus: Introduction to Options

Thursday, March 7 @ 1pm ET

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