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!