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S&P500 Long Call Vertical 66% Probability Of ProfitI've played yesterdays some S&P500 with vetical spread. (1) RSI in the middle zone Any direction is possible (2) Forming a bullish triangle - again Similar cases in the past one year: (3) There is a little more space to the upside (4) Relative Implied Volatility is low So I'm choosing a debit strategy. CONCLUSION: I'm using LONG CALL VERTICAL - Buy 1 SPY April16' 375 Call Sell 1 SPY April16' 380 Call Debit call spread for 4.12 debit Probability of Profit: 66% Profit Target relative to my Buying Power: 21% Max profit: 88$ Max loss at expiry: 412$ (Buy Power) Max loss with my risk management: ~95$ Tasty IVR: 4.8 Expiry: 36 days Stop/my risk management: Closing immediately if daily candle is closing below $379 Take profit strategy: I'm taking at the 55% of max.profit in this case with auto sell order. (at 4.56 credit) If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW , and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
AMEX:SPYLong
by TanukiTrade
9
Why 90 Percent Of Traders Lose MoneyYou might have heard this, “90% of traders lose 90% of their money in the first 90 days of trading.” This is known as the 90/90/90 rule. I don’t even know if this is true, but it seems that a lot of traders are losing money. So this is why today, we’re going to talk about what causes most traders to lose money. Then I’ll give you practical tips on how to avoid it so that you can be part of the few that actually make money with trading. What Do You Need To Become A Successful Trader? There are three things that you need to really become a successful trader. If you’re missing even one of these things, you already have a big problem. So let’s start, with the first thing you need. This is the most important thing that a trader needs and this is a trading strategy. Now, there are traders out there who are trading without a strategy, and the number one reason that I see traders fail is they don’t have a trading strategy. A trading strategy tells you what to trade, when to enter, and when to exit. So as you can see, a trading strategy doesn’t have to be super complicated, but you need to know what to trade. Here is what I see many traders doing since they don’t have a trading strategy. They are going for the flavor of the day, and the flavor of the day might be something that Jim Cramer is saying, something that Cathie Wood, the famous, or infamous hedge fund manager of Ark Investments is saying, or maybe something that they read in the news. This is the worst thing you can do. I’ve been talking a lot to traders, or not really traders, but people who are getting started in the market, and I ask them, “what are you trading right now?” They usually just name the most popular stocks that are being traded. These are stocks like TSLA , AAPL , AMZN , and NFLX . Then recently, as you know, with the GME hype, the GameStop hype, a lot came up there. But you see, if you’re not trading with a strategy, you are not a trader, you are a gambler. Now the second important piece that you need as a trader is that you need to have the right tools, and I can’t stress this enough. Here’s the deal, if you want to compete in what they call the game of games, if you want to really make it as a trader, you need to have professional tools. Think about it this way, if you only have a strategy without a tool, it’s like trying to win NASCAR riding on a lama, right? I mean, it doesn’t work this way. So it is super important that you have the right tools. You can’t win a car race on a lama or on a donkey, you get the idea, right? The third thing you need to be a successful trader is having the mindset. So you see, you can have the best strategy, you can have the best tools, but if you don’t have the right mindset, you will lose money. You see, in fact, I see it all over. Sometimes people think all they need is the right tool, and they will be successful traders. Or they think all they need is a trading strategy and they will be a successful trader, but that’s not the case. The reason why traders fail is not having the right mindset is because they let emotions get the best of them. The two main emotions that we have as traders are greed and fear. I mean, obviously, we are greedy. We want to make money this is why we get into this game of trading in the first place, at least that’s why I started trading. But then there’s also the fear, the fear of losing money, but you got to be able to control these emotions. We will talk about losses in a moment, but one of the challenges, because of greed, traders will often trade too often, meaning that they are overtrading. Have you ever been guilting overtrading? It happened to me at the beginning of my trading career. I remember when I was still a young trader and new to the whole trading game somebody told me, “if you want to make it as a trader, you have to take at least 100 trades a day.” This person was probably a broker because I tried this, and it is impossible. I traded on a one-minute chart, tried to make 100 trades a day, and I found it just didn’t work this way. Then there is revenge trading. Revenge trading is something that I did in the beginning because I thought, after I took a loss was the time for me to make back the money that I lost. Something important that you need to understand is that the market doesn’t owe you anything. Sometimes the markets give, and sometimes the markets take away. So this is why revenge trading is something that you need to avoid at all costs. The good news is in the long run, usually, the market likes to give, at least to those who are serious. You must understand that losses are part of our business as traders, and it is sometimes really easy to become overconfident. However, whenever you think that you have the markets figured out, is when the market is going to throw you a curveball. There will be always surprises and situations that you have never encountered. Some call these black swan events. Often what I see is that many traders who are new to trading simply focus on the wrong things. Most young or new traders focus mostly on the entry. They think if they can just time the entry, this is when they’ve figured it all out. Well news flash, money is made and lost when you exit a trade. So timing the exits is almost more important than timing the entries. Sometimes traders focus on just having a strategy with a high winning percentage, but this is another mistake. You don’t need a high winning percentage. In fact, you can make money with trading even if you’re wrong half of the time. The magic happens actually when all three things are coming together. So how can you do this? I want to share a little bit with you about what I am doing. Well, first of all, let’s talk about trading strategies. The Trading Strategies First of all, what you need to understand is that there is no “best” trading strategy. It amuses me actually when people argue with me about this. People will ask me what will you do if this or that happens. Well, you see this is where I’m not saying that you should trade my trading strategies. I show you what I personally do, and how I’m making enough money to trade for income to trade for a living, and let you make the decision if it’s right for you. I can’t tell you if my strategies are right for you or not, but I can tell you there is no “best” trading strategy. Either a trading strategy is making money or it doesn’t, right? So if a strategy is making someone money, I would never, ever criticize anybody who is making money with that strategy. Who am I to say you’re doing it wrong? When it comes to the strategies I use, sometimes people ask me, “why do you do it this way? Why don’t you do it the other way?” and I’ll be happy to explain to you why I do certain things. It’s always interesting to see that some people feel that I need to become a better trader, and I appreciate your concern for me, but I’m actually doing pretty good. A trading strategy must fit YOU. It must fit you in terms of capital requirements. There are some trading strategies that you can start with as little as $5,000. There are other trading strategies that require more money. So you need to make sure do you have enough money for this particular trading strategy. The other thing might be time requirements. Some trading strategies require you to sit in front of the computer all day long. Now, this is not for me. I personally like to watch the markets for 10 or 15 minutes before they open, and then for 30 minutes after they open. So personally my own trading is usually just 45 minutes in the morning. Now, fortunately, I don’t have a job, I have nothing else to do but watching the markets, this is why I do it. However, some of the trading strategies that I trade, actually don’t require you to watch the markets at all. So there are time requirements to consider, there are capital requirements to consider, but then also possible drawdowns you need to keep in mind. Without risk, there’s no return. No risk, no reward. See, if you don’t want to take any risks at all, and make sure that you never, ever lose any money, then you should put your money into a savings account. In a savings account your money will be safe, right? But it also earns only about a quarter percent right now. So if you want to make more money with trading, then you have to risk some money. So there’s a fine line regarding the risk and rewards ratio. So you need to be aware of the risk, and the more risks you’re willing to take, the higher the rewards will be. But keep this in mind when you’re looking at a trading strategy, there are a few things where it might make sense for you to trade the strategy or it might not make sense for you to trade the strategy. The PowerX Strategy There are two trading strategies that I like to trade, and the first strategy is the PowerX strategy. Now, for the PowerX strategy, there are a few criteria here according to whether or not it's the “best” strategy. So, first of all, the PowerX strategy is great for a trending market, and it doesn’t really matter if the market is trending up or down as long as it trends. It does not perform well in a sideways or in a choppy market. This is what we are having right now, and this is why right now I am not trading the PowerX strategy as much as I used to last year when we did have trending markets. Now, trading with the PowerX strategy requires a minimum of $5,000. So if you have five to $10,000, that’s actually perfect to get started with the strategy. If you have less than this, I don’t think that this strategy is for you. Honestly, I don’t know a trading strategy that you could trade with less than $5,000. This is where I’m not claiming that I have the best trading strategies. I have trading strategies that I personally have traded for many, many, many years that have stood the test of time and that are proven to make money, at least for me. Now the PowerX Strategy is perfect for growing a small account, and here is why. With the PowerX strategy, you can apply money management, and money management is the turbo boost in your account. It can help you to take your trading to the next level. Now in terms of time requirements, when we talk about this, it takes around 15 minutes per day and you can do this absolutely while the markets are closed. So if you have a demanding daytime job that doesn’t allow you to step away and look at the markets, then actually The PowerX strategy is perfect for you. Again, it does have some limitations so it doesn’t work all the time. So you need to know when to use this strategy. The Wheel Strategy The other trading strategy that I like to trade is The Wheel Strategy. So the Wheel Strategy is perfect for a market that going up, going sideways, even when it is choppy, or when the market is slightly going down. It is not good for a bear market where the market is going down. So you need to know when to apply what strategy. This is where, in the same way as you have multiple tools to fix the home, you need to have multiple trading strategies. So here, when you’re trading The Wheel Strategy, it is an options trading strategy only. Here specifically, you are selling premium. So this is where you could have a large drawdown, which is possible if you’re stuck in a position, as I am right now. I am stuck actually in two positions. So let me show you the two positions that I’m stuck in. One of them is AAPL , I bought it at 133. Right now, it is trading at 120, so I’m losing $13 per share that I own and I own 800 shares. So the question is, are we in a bear market? No, we are not in a bear market right now. Not at all. We are somewhat in correction territory, and correction territory is when a market is going from the top from the recent high to down more than 10%. That is how a correction is defined. According to the Nasdaq, we’re clearly in a choppy market. Since the beginning of the year, we have been grinding higher, coming back, going up, going sideways. In fact, year to date, the Nasdaq is down .37%. So pretty much haven’t moved since the beginning of the year, but we are not in a bear market. So you could have a large drawdown while you’re stuck in a position. Let’s talk about the other position that I’m in. The other position that I’m in is RIDE , and RIDE is not doing well at all. So I’m flying a rescue mission here right now. I bought RIDE at 21.50, and right now it is trading at half of what I bought it for. So obviously that’s not good at all, right? So what I need to do right now, is work my breakeven all the way down by actually doing dollar-cost averaging. Right now, I sold some more puts trying to bring down my cost basis from 21.50 to 18.70, then to 16. What I’m hoping for, and this is part of this strategy, is that I am getting a quick bounce. Now, absolute full disclaimer. What happened here with RIDE, to be honest, why I got into this is because I was getting greedy. This is where trust me, I’ve been trading now for more than 20 years, even after this, I love money. I saw a lot of premium on RIDE and I got blinded by the premium. This could be the one trade out of, I believe, now close to 150 trades where I have to take a loss. So it happens. Losses, as I said, losses are part of the business, and never let greed get into your way. So you could have a large drawdown. So here with this strategy, you need a minimum of, I would say, $10,000 in cash and you have to put it into a margin account so that you get $20,000 in buying power. If you’re trading an IRA, you need at least $20,000 in your IRA because in an IRA you don’t get any buying power. Time requirements for this strategy also require about 15 to 30 minutes per day. I think the best time to trade this strategy is during the open. So this means from 9:30 to 10 a.m. Eastern Time. If you have been following me for a while, then you know, I’m not standing here and telling you, “You have to trade this way. My trading strategies are the best.” I would never do it because they may, or may not fit your style, which is absolutely fine. The Best Trading Tool, The PowerX Optimizer However, if you choose to trade these trading strategies, this is where I believe that I have the best tool in the world for trading the strategies. I’m absolutely biased, but the tool that I have here is the PowerX Optimizer. Here is why I think that this is the absolute best tool for it because this software has been programmed for these two strategies specifically. Now, if you look at any other tools, for example, like TradingView, it is software with which you can do some backtesting and has a bunch of indicators built-in. So first of all, this software, I feel is very complex to learn because you have multiple functions. And it basically allows you to trade any trading strategy whether you use a moving average strategy, you can trade with it, or you’re using a MACD strategy, you can trade with it, or you’re using Bollinger bands, you can trade it with it. But you see, especially with the PowerX Optimizer, it has been designed to support the PowerX and the Wheel Strategies. This is where it shows you exactly the three things that you need to know when you have a strategy. It tells you exactly what to trade, it tells you exactly when to enter, and it tells you exactly when to exit. I’m using this tool every day, and I wouldn’t want to trade without it. I want to be absolutely honest. If you would take PowerX Optimizer away from me, even though I know these two trading strategies inside out, it would be super difficult to find the best stocks to trade. The other super important thing that PowerX Optimizer does is that it actually tells me what would have happened in the past if I had traded this particular stock group on here for example, according to the rules of the PowerX Strategy. This is important to me because it gives me more confidence. The trading report basically tells you if you had followed the rules of the PowerX Strategy, what would have happened over the past year if you had traded a stock. The summary it shows me actually the ROI, it shows me how many winning trades and losing trades I would have had, what is the winning percentage, the profit factor, the average win, and the average loss. This here is based on a $10,000 account. So see if you have a $10,000 account, and your average loss is $122, I mean you’ll be fine, right? You’re not wiping out your account. What is important to me in a tool? So first of all, what I want to have is a powerful scanner, because what the scanner does, a scanner tells me what to trade. Now, the second thing is I want to see what would have happened if I traded this stock with this strategy. This for me is super important. Then, of course, I want to get all the important data for trading. This means I want to know how many stocks or options should I trade, when to enter, and when to exit. So these are the important things. This is, of course, combined with what can I expect from this trade. It’s so important that I also see the risk and reward ratio. So here, for Groupon, I can expect to risk a dollar and trying to make $2.33. Now let me ask you, does this sound good? It sounds pretty good to me. With the PowerX Optimizer, I also have The Wheel Calculator and The Wheel Scanner. The Wheel Scanner shows me what are the best candidates for The Wheel right now. I’m actually super excited because we are about to release version 2.0 of The PowerX Optimizer. Within the software with the new update, we distinguish between the PowerX Strategy and The Wheel Strategy.
TVC:NDQEducation
by rockwelltrading
1
When To Take Profits on Options I’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Options trading is really fascinating, and it’s a great way to make money, and I think it is very important to know when to take profits, especially if you like trading The Wheel as I do. So the question is, when should you take profits when trading options? How exactly do you figure this out, is there a formula for it? In this article, I’ll share some guidelines for how and when you should take profits on an option trade. We will answer the question of whether you should let options expire or take profits early. I will show you some very specific examples of two trades that I have going on right now (at the time of this writing on March 17th, 2021). One of them, I took profits today, and the other one I’m still holding on and I will show you exactly why. ]How To Calculate Profits On Options Firstly, let’s talk about how to calculate profits on options. In order to address this, there are two types of options traders. One type of options trader are ones that are buying options, and the other, which I feel is very lucrative, and this is what I’ve been doing for a long time, is selling options and collecting premium. I want to actually talk about selling options and receiving premium, because this is, as I said, what I’ve been focusing on recently with trading The Wheel Strategy. My year-to-date profits on this account so far are more than $54,000 selling premium on options, and I’ll show you exactly how to do this. So when selling options, you’re receiving premium, and for me, the most important metric here is the so-called premium per day or PPD. MARA Example The first example that I want to give you is my position with MARA. Looking over my transactions with MARA over the last 30 days. I sold puts at a strike price of 20, and for this, I received $0.28 in premium per option that I sold. Now options come in 100 packs, so this means that per option I made $28. Now, in this specific example, I sold 50 options total, so this means that I’m receiving a premium of $1,400. I put this trade on March 10th, and these options expired on 3/19. This is $1,400 in premium in 9 days. This comes to $155.55 in premium per day, or PPD. Now this includes weekends. My rule is I’m buying back the option when I can get 90% of the maximum profits, but there’s an exception to this rule. First, let me tell you what that means. So again, I sold each contract for $28, for $0.28. The idea is to buy back the option at $0.03, and this is exactly what I did today (March 17th). So we have another two days to expiration. So today, I bought back a total of 50 contracts at $0.03, and by doing so I made $0.25 in profits on MARA. Now, this is where again, we’re looking at 50 contracts, times $25, so this is $1,250. I was in this position for 7 days. So $1,250, divided by 7 days, means that I made $178.57 a day. Let’s just round to $179 per day. As you can see, $179 is more than the $155.55 that I planned per day. Now let’s think about it. If I would keep MARA right now, if I would keep this option until expiration, but what would happen? I would make an additional $150 in three days. This means that now my premium per day is only $50 per day. This doesn’t make sense to me because this here is actually bad, because my plan was to make $156 per day, and I was able to make $179 per day by buying the options back. If I would hold on to this trade and let it expires worthless. So this is where here, and let it expire worthless, right? This is what would happen. I would make an additional $150 in three days and the premium per day would only be $50. That does not make sense to me at all. This is why here in MARA, it made sense to buy back the put option because by doing so, it frees up buying power meaning that now I can sell more puts. So the idea here is that I’m selling more puts and making more money on the new puts than I would make holding on to MARA. DKS Example Let’s go over another example with a position I have right now with DKS . I sold the 66 strike on March 10th. I sold 15 of them and I received $75 in premium. 15 contracts times $75 comes to $1,125. So let’s do the math right now and see if it makes sense to close this trade today (March 17th) or if we should keep it, and we’re using very similar logic here. So we sold the 66 put expiring March 19th, and we received $75 per contract for it, $1,125 total. We then divide this by 9 days to get to our premium per day, which is $125. So right now, on March 17th, let’s see how much DKS is still worth. Right now, the bid/ask for DKS is $0. 05 over $0.10, and that’s really interesting because I want to buy it back at $0.07. Let’s say right now, if I would place an order right now, I could buy it back at $0.10. Should I do it? If I did this, I would make $75, minus $0.10 ($10 per contract), which is $65 per contract. For all 15 contracts, I would make $975. We find our PPD by dividing $975 by 7 days, which comes to $139. So if I really wanted to, and if I needed to free up some buying power, I could do this. But let’s see what happens if we hold this for a few more days. So if we hold DKS until expiration, we can make an additional $150. It might actually make sense to close it out because $150 over the next three days does not make a lot of sense. When I looked at the option earlier, DKS suddenly jumped from 78 to almost 79. This is a 10% jump in 30 to 45 minutes. When we opened this morning, first, we went down, and then we went a little bit up, and then we were hovering right around where we opened. Earlier this morning, the DKS put was trading at $0.25. So the question is earlier this morning, would it have made sense to close it? Earlier today on March 17th, I could have bought it back for $0.25. So that wouldn’t have made sense, right? Because then if I’m buying it back for $0.25, I would only make $0.50. So this here, $0.50, this is then $750 in seven days, and if we divide $750 by 7 days, this is $107 premium per day. As you can see, the $107 premium per day is less than what I expected. If I would hold DKS to expiration, we can make an additional $0.25, $25 times 15 contracts is $375. Now, if you take the $375 in 3 days, that would be $125 premium per day. So when I’m getting $125 premium per day, this is when it does not make sense to sell it just yet. Should You Take Profits Early? So this is the important thing because the question always is, do you take profits early, or hold until expiration? Well here’s my formula for this. So I want to give you a very specific formula that you can use if you want to. If the current realized premium is a premium per day, PPD, is larger than the planned PPD, this means close it out early. If the remaining premium per day is smaller than the planned premium per day, close it. Only if the current realized premium per day is smaller than the planned premium per day, in this case, hold it. If the remaining premium per day is larger than the planned PPD in this case, you want to hold it. Summary This is why today I wanted to show you my formula for when to take profits on options, especially when you are an options seller. You see, selling options and receiving premium is what we do with The Wheel Strategy, and the most important metric here is the premium per day (PPD). This where using the PPD, you can actually get down to a formula of when exactly you should buy or sell. This is where it’s just a good rule of thumb if you don’t want to do all these calculations. So the rule of thumb is I close a trade when I can realize 90% of the maximum profits.
NASDAQ:MARAEducation
by rockwelltrading
3
CRUS - Monthly MultiplierThis month, I'm trying a new trade setup where I use 10% of the premiums earned for potential multipliers with limited risk. When I entered this trade, price was hitting the bottom channel of 88.06. Semiconductors as a sector has been doing well Weekly and Monthly. Hence I entered the following trade 9 Contracts, 100 Strike @ 1.10 that amounts to $990 (Excluding commissions). As I'm entering this trade setup much later after I entered. In hindsight, I think Monthly contracts are not great as the Theta drops pretty rapidly once price deviants. I might have to relook how I plan and select Monthly Multipliers. I also feel picking a single direction trade very difficult and after so long of not doing it, it feels strange haha. This is probably not a trade I'm happy with, even if somehow I end up profiting (Which I doubt is possible)
NASDAQ:CRUS
by Ronin_trader
1
[FUBO] Iron Condor - the FuboTV Inc EVENT play Another lazy trade for today, just an event play. Very risky to holding neutral positions in uptrend, so literally just for a few days on table. Event plays are usually a "trade and pray" strategy, so I'm not preferring (TastyTrader Bob and Tom like it, but I've sucked many times width them) In current case I've decided to take the risk. (1) MurreyMath distances More than 5 MurreyMath fraction distance (5/8) for break even border, current price almost the middle of it. I'm judged to secure area 2.5 fraction up, 2.5 fraction down. (2) Nearest pivot points detecting danger area Secure level upside is $54, downside: $30. Inside this I can sleep well. Outside this I'm looking for any kind of minimal profitable exit point. CONCLUSION: Iron Condor for today event Buy 1 FUBO April16' 20 put Sell 1 FUBO April16' 25 put Sell 1 FUBO April16' 60 call Buy 1 FUBO April16' 65 call Expiry: 45 days Take profit: after event at the first possible moment. Risk management: I'm closing the trade immediately - if the daily bar closing outside my strikes - and I'm cutting my loss . (no matter what I'm believing)- usually I'm losing mutch less than my max profit in this case. Danger zone check every day.
NYSE:FUBO
by TanukiTrade
2
RUSSEL ETF 20% profit play during correction with Iron Condor One of the most highest probability of trades are: neutral Iron Condors with high Implied Volatility on large indices. (SPX, DJI, RUT) The more an indice is overbougth, than better this strategy works, as the correction also results more movement into downside. Unlike other overvalued stocks, however: the indices are not collapsing. (except for 1-2 extreme cases where immediate intervention is required, eg March 2020) I'm always trading the alternative ETFs of these indices: SPY = S&P500 = ES mini futures IWM = Russel 2000 = RT mini futures DIA = DJI = YM mini futures .etc... On Friday I've opened an IWM Iron Condor, so here are my reasons: (1) RTY1! Futures Analysis The Russel mini futures at local top hit the 3 year trendline, bluffy upside trendline permanently broke. (2) Divergence with breakdown Hard daily divergence in the last few months, my smooth RSI trendline breeaks. (3) Relative high IVR Relative Implied Volatility Rank (IVR) increases. This value, if high enough (e.g., above 45), favors neutral credit strategies like Iron Condor. In the case of indices, this is particularly rare, occurring every few months. At these times you can safely open neutral strategies (wide wings), for example: Iron Condor, Strangle. (4) My Iron Condor hunter script signal My Iron Condor Hunter indicator give me an automatic signal with safe ranges. As you see: in the past almost every time indicated the safe range successfully. (I'm not counting the 2020 Marc, every regular strategy failed in that crash). (5) Safe levels are well defined in my range I'm always defining safe price levels (based on the nearest short term high/low points). In my case these levels are well defined inside the Iron Condor Hunter range: CONCLUSION: I've opened an Iron Condor on IWM (Russel ETF) Profit target: 20% Max profit: 68$ Max loss: 332$ Tasty IVR: 13 POP: 69% Expiry: 42 days Strategy: Neutral IC Buy 1 IWM April16' 185 Put Sell 1 IWM April16' 189 Put Sell 1 IWM April16' 244 Call Buy 1 IWM April16' 248 Call Stop: Closing immediately if daily candle is closing below put strikes or above call strikes. Safe levels (190,205,229) are defending my borders. Take profit strategy: I'm taking at the 55% of max.profit in this case. Inside the curve I'm usually in profit. If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW, and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
AMEX:IWM
by TanukiTrade
10
Options Trading For A Living In this article, I’m going to show you how I made $52,138 in 8 weeks by trading options (at the time of writing this article March 12, 2021). The key question that I’m always asked is, “Is trading for a living possible?” For me, this is a resounding YES! I’ll break down all the steps from how to trade like a pro, where and how to find great trades, how patience is extremely important when making money, and more. What Do You Need? You might be thinking, “How the heck does anyone make that much money doing something so risky?” The answer is simple. You need: Number One a solid trading strategy, which we will discuss in this article. We will talk about the trading strategy that I personally used to make more than $50,000 in the past two months, and I’ll show you how to do this step by step. Number Two you need the right tools. You will see why that is so important, and I’ll show you the tools that I’m using. Number Three you need the right mindset. I know that mindset is probably the most boring thing to talk about it, so I will not spend a lot of time on this, but having the right mindset is important if you want to trade for a living. Now, there’s one more thing that you need, and this is money. I hate to break the news to you, but if you don’t have any money you can’t put money into your account, and you won’t be able to make money. And yes, I made more than $52,000. Before we talk about the trading strategy, let me just add a very, very important disclaimer. No, these results are not typical. Yes, I am very good at this, and I’ve been doing it for over 20 years. If you start trading this strategy, do not expect the same results. I will talk about this later, but it is super important that you start paper trading on a simulator first. How Much Money Do You Need To Trade Options? The key question that you might be wondering is, how much money did I need to put into this trading account to make this much? For this account, I deposited $250,000 in cash. This is a margin account, so this gives me $500,000 in buying power. Let’s dive in. The Wheel Strategy If you have been following me for a while, you know that I like to trade using The Wheel Options Trading Strategy. There are three steps to this strategy. Step Number One , what we are trying to do here is sell puts and collect premium. When selling options, I typically like to go with expiration dates 1 to 2 weeks out. The idea here is to collect a “weekly paycheck.” I’m putting this in quotation marks because this is where some people say you can collect weekly paychecks with no risk, and that is simply not true. When trading there IS risk. You want to make sure that you trade only the best stocks. What do I mean by this? Well, currently in my account I have positions with companies like AAPL, AMD, DBX, DKS, GDXJ, HAL, HAS, IBM, and JWN. These are all super solid stocks. These are not fly-by-night stocks. You will not see any GME, AMC, BB, BBBY, or any of these meme stocks in my account. We’re talking about super solid stocks, stocks that you have to be okay with owning if you’re assigned the shares. So let’s look at DKS , which is Dick’s Sporting Goods. They are a solid retailer. The idea here is that we are selling puts at a strike price that is at support. Here I looked at short-term support. You want to see at what price level did prices touch several times and then bounce back. They were at the 66 level, so I sold a 66 strike. If DKS closes above then I keep the premium, if it closes below, we would get assigned. Now, another stock that I am trading right now is SNAP , Snapchat. Here we are looking at a strike price of 49. Again, this is where you want to pick super solid companies. I don’t know about you, but do you have kids? My kids live on Snapchat. They’re not on Facebook, Twitter, or Instagram, but they’re on Snapchat. I believe SNAP it is a super solid company. We see that we had support four, almost five times. So this is where I sold a strike price at 49. You want to make sure that you’re only trading the best stocks and that you always look for support. The support that I like to see is a support level that held at least over the past 8 weeks. So, again, step number one is where we’re selling puts and collecting premium. The basic idea here is that we are buying stocks at a discount, or as many people would say right now, “buying the dip.” This is something that has been working really, really well. It’s a tactic that Warren Buffett has been using for many, many years to scoop up stocks at a discount. Step Number Two is where you may or may not get assigned. This means that if the price at expiration of the stock is below the strike price that you sold, then you have to buy the stock at the strike price you sold it. In this case, if this is happening, then you would go to step number three, which I will share with you in just a moment. Now, if the price is above the strike price at expiration, then you don’t get assigned. You just keep the whole premium and you would go back to step number one. This is why it’s called “The Wheel,” because we keep doing this, right? Step Number Three is when we are assigned, we will sell covered calls and collect more premium. This is the strategy in a nutshell. As you can see, it is not really complicated. The trick is to trade only the best stocks with solid support levels in case you are assigned. Using The Right Tools The second thing that you need is powerful tools. Let’s talk about the tools that I personally use. If you have been following me for a while, you already know that the tool that I use is the PowerX Optimizer. Now, here are the two things for me personally that are super important when we are picking the right tools. First of all, I want to have a scanner built-in. A good scanner not only finds the best stocks to trade, but also tells me what strike price to trade, and at what expiration. When it comes to expiration, I already told you in broad strokes, I’m only trading one to two weeks out. But should I trade this week’s expiration or next week’s expiration? This is super important, and this is where a tool helps me. The second thing, which for me is super important, is that the tool has a calculator. With this calculator, it tells me exactly how much premium I should get, how much risk is involved in this trade, right? These are the important things you need to know. Then, of course, a calculator should tell you how many contracts should I trade based on my account size. When trading options, you know the important things are, that you know what is the underlying stock, what is the strike price, what expiration, what is the minimum premium you want, and of course you want to know the risk. So let me show you exactly how I am finding these stocks. So here we see the PowerX Optimizer. The scanner actually gives us a bunch of symbols that are candidates to consider right now. Now, one of the things that we need to do is we need to make sure that we only pick the strong stocks, and that we only pick those that have a good support level. So one of the examples of a stock that I’ve traded recently is NIO . The scanner actually shows me in the data window what strike prices I should consider right now. It also shows me what premium I can get, and how much this would be annualized. What PowerX Optimizer told me is that right now I could sell at a strike price of 36. And I would get some decent premium for this. Now, we always want to go back over the past few weeks, and if we look over the past 6 to 8 weeks, we see the support see, it touched the level three times. So it looked like there was strong support at 36. Now, the next thing is, and this is where PowerX Optimizer helps you, that you see exactly here how much premium you can get, especially if we are looking at it annualized, right? For me, the minimum option premium that I should get to get at least 30% annualized. For me, that’s what I want to do. This is how I was able to make more than $50,000 thus far this year, and it is only March 12th, and I started on January 11th. Now I also want to know how many options should I trade based on my account. How much in premium would I collect, and what is the premium per day that I would make? So how much money per day do I make when trading this? This is where we go back to why it is so important to have a tool that shows me all this because let me ask you, how else would you find all this out? I mean, if you tried to do this manually, I don’t know, I mean, for me, this is almost impossible to do it. So and believe me, no professional trader does this with only a calculator or a cell phone in his hand. You must know your numbers. Trading is a numbers game, and if you don’t know your numbers, it will be really, really difficult for you to make money. Another key question is, if you don’t have a tool, how else would you find these trades? I mean, every single trade that I did in this account here, that you see over the past eight weeks, that have yielded $52,000, has been taken from this scanner. I mean, if you would force me right now to trade without this tool, I couldn’t do it. This is where I believe that having powerful tools like the PowerX Optimizer is giving you an unfair advantage. Think about it, when trading you are trading against other traders, but you don’t have to be the best trader in the world, you just have to be better than the other trader. You just need to have an edge, and this is where I must say this tool is actually giving me an edge. If you want, you can even say that it is not only an edge, you could call this if you want to, an unfair advantage, but when it comes to trading, you need to play every ace. You don’t want to show up with a knife to a gunfight, you’re trading against the smartest traders in the world. Traders Mindset Now, this brings me to the last point here of how to trade for a living, and this is having the right mindset. This is something that many traders underestimate because they think, “Hh, you know what, that’s fine, I just need a strategy and I need a tool and I will just be fine.” Having the right mindset is important, especially if you want to trade for a living. You must be focused on what I call SRC profits. This stands for systematically, repeatable, and consistent. So this is what SRC stands for, and this is why this so important. You see, as a trader, for me, at the end of the month, I’m wiring money out of my account, out of my trading account into my personal account. I mean, it's great when you have windfall profits. If recently you participated in the GME hype, and you double, triple, quadruple many maybe 10x your account, then good for you. Congratulations, and I really mean this. However, can you do this again this month? What is the next stock that is going crazy like this? Or if you were able to capture the Tesla ride all the way up, good for you, but what happened when Tesla went from 800 to 500? Did you take a hit in your account? See, this where it is super important to have these SRC profits. When it comes to trading for a living it is also important that you have patience, and here’s what I mean. You’ve got to grow your account systematically. So, and how do you grow your accounts systematically? If you don’t have a trading strategy, this is why it’s so important to have a trading strategy that produces these SRC profits, the systematically, repeatable, and consistent profits. So you see how it all comes together. I mean, this is why there’s these three pillars, the trading strategy, the tools that are supporting your trading strategy, and the mindset. Now, the other thing is that when you are trading, patience means that you can’t panic. You see this is where recently, people started talking about these diamond hands, but I think the way how some people talk about diamond hands is just holding on to a losing trade. No, this is not the case. It basically means you let the trade play out. How do you let the trade play out? You follow your plan, but to follow your plan, you must have a plan. So this is where it goes back again to having a trading strategy. Summary To sum things up, first of all, is it, is it possible to trade for a living? The answer for me is yes because that’s what I’m doing. Now, does it mean that you can do it? Again, this is why it’s so important that you practice on a paper trading account first. So you’ve got to have the right trading psychology. For the trading psychology here is that you are aiming for SRC profits and not the YOLO-windfall every now and then profits. To start trading for a living, what are the things that you need? You need to have a strategy, you need to have the right tools, you need to have the right mindset. Now, if you are looking for a strategy, today I presented to you The Wheel Strategy, which I think is a great trading strategy because it’s simple to understand and it gives you an edge, right? You also want to have the right tools, and for the right tools, I might be biased, but I think PowerX Optimizer is the best tool not only for trading this strategy but also for trading the PowerX Strategy here.
TVC:NDQEducation
by rockwelltrading
1
BIDU IRON CONDOR with high Probality of ProfitHi everybody! After a very big break - MrAnonymCrypto back on board! The past year I'm spent for learning and developing my new trading system and indicator pack and full trading strategy system for option trading of the us stock market. I'm tired to waiting for any bitcoin daytrades and unregulated price moves: those instruments eated my life and time.  Ever since I’ve only been dealing with the stock market for up to an hour a day: my life has changed - in a positive direction.<3 Today I'm releasing the first live tradig publication of my indicator: the Iron Condor Hunter .  // If you are new in the option's world I'm recommending to learn options first via tastytrade youtube videos   // More about my Iron Condor Hunter script in advance:  This script is for neutral credit strategy trades. This script indicates the secure Iron Condor setups automatically on any liquid+volatile instrument, based and calculated with auto  Murrey Math level script and current price actions, and IVR. (MurreyMath is my other script, telling more later) If the script indicates new potential setup: you can see a blue background with the levels of the Iron Condor wings, automatically! You can check the success rate of the script for the past with same setup I've designed this indicator for 45-60 days expirations, (because you can exit automatically at 50% profit in 30 days, if the instrument stays inside your original range!) And now, let's look an today live example: BIDU ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  REASONS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ (1) Backtesting the indicator 17 Iron Condor detected in the past 10 years,  with 100% succes rate, with exact range detection at the beginning. Today I'm catched another signal, so I'm grabbing the opportunity! (2) The trading range & IVR Today Iron Condor Hunter script detected the 372-221 range for safe-play this setup. Because the most volatile expriation is the April 16th in the 45-60day range: I'm playing this for credit. The (tastytrade) IVR is high (above 80) -  this is very high Implied Volatility Rank - safe for credit play, the instument is liquid.  Good Defined Strikes: Sell 1 BIDU Apr16' 220 put Buy 1 BIDU Apr16' 210 put Sell 1 BIDU Apr16' 370 call Buy1 BIDU Apr16' 380 put (3) Divergence on my oscillator As you can see: the very obvious divergence is detected at the overbought levels. This and the formation meaning for me: some correction started. No kind of event ( divident ) coming in the next 60 days, so I'm not expecting more significant price movement. (4) Define safe zones At Iron condor setups I'm always define some "safe-zone" : for upside and downside too. Safe zones meaning for me: I can sleep peacefully until the price is moving between these edges. BUT! If the safe zone beaks: my eyes on the final strikes. Another seat beld is the 0.618 fib-retrace level, because if the price is falling straight down: at this level we are expecting some resistance. But in current case: the fib 0.618 level is inside our range. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SUMMARY - MY TRADE SETUP ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Max profit:  $288 Max loss:  $712 IVR:  87 Probability of Profit:  68% Expiry:  50 days Strategy: 67.7% wide delta neutral Iron Condor for credit Risk management : I'm closing the trade immediately  - if the daily bar closing outside my strikes - and I'm cutting my loss. (no matter what I'm believing)- usually I'm losing mutch less than my max profit in this case. Profit management: I'm sending an order  at the 50% of max  profit, immediately after my position  successfully opened  Welcome any comments:  * whether about the options, my indicators in the future.  * in private, I will be happy to help you with any questions about the option for free.  * are you interesting in options, or only "when bitcoin moon"?
NASDAQ:BIDU
by TanukiTrade
6
The Wheel Options Strategy: 29 Things You MUST KnowI’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Those of you who have been following me know I love trading The Wheel Strategy, in fact, with my $500,000 trading account that I’ve been trading on since mid-January, I just $50,000 in REALIZED profits for the year. The Wheel Options Trading Strategy is a powerful trading strategy that can be fairly low risk IF you know what you’re doing. This is why, in this article, I wanted to give you a complete squad of trading tactics for trading The Wheel Strategy. I look through all of the comments on my YouTube videos & the questions that I get in my live streams, and I have compiled a list of the questions I get most often. So today we’re going to talk about the 29 things you must know when trading the Wheel Options Strategy. The Wheel Strategy Overview So let’s briefly talk about the basics, and the basics of the Wheel Strategy, are actually pretty simple. So let me just tell you the three steps that we need to do when trading this strategy. Step Number One: We want to sell put options and collect premium. Step Number Two: Here, we may or may not get assigned. Step Number Three: If we are getting assigned we will sell covered call options and collect more premium. If we are not assigned, then we will just stay at Step Number One, and keep selling put options to collect more premium. So as you can see, it’s really not that complicated. I mean, wouldn’t you agree? Now I divided this into 3 sections: The Basics, then Picking The Right Stock, because there’s a lot of questions about this topic, and then we will also talk about Selling Calls After Getting Assigned, as well as What To Do When a Trade is in Trouble. The Basics 1.) I have around $30,000 in my Interactive Brokers account. Is it enough to start trading the Wheel? Here is my recommendation. You should have at least $10,000 in cash so that you can get $20,000 in margin. I highly recommend that you are trading a margin account. If you have less than $10,000 in cash, I do not recommend that you trade with the Wheel Strategy. Now, if you have a smaller account, I recommend that you do a maximum of three positions in your account. As your account grows, you can go up to five positions in the account. 2.) What is the best expiration date when selling options? What I personally like to do is go 1 to 2 weeks out, so this also means that I like to trade weekly options. So I’m looking for a really short fuze here because I believe that this is where you have the most control over the prices here. The idea is actually to collect so-called “weekly paychecks,” and I put this in quotation marks because it always sounds so glamorous, right? However, it’s really important that you know what you’re doing here. Now, the next question that I receive all the time. 3.) Should I use margin to increase my buying power? My answer to this is yes, absolutely. I highly recommend this, however, keep in mind that margin is a double-edged sword, which can work for you as well as against you. 4.) How do I know if I have enough capital if I get assigned? It’s easy. So let’s say that you are selling a 100 put, which means a put with the strike price of 100. This means that when you’re getting assigned you have to buy 100 shares at $100 each totaling $10,000, so this is how much capital you would need. So all you need to do is basically just take the strike price that you are selling of the put, times 100 because options come in 100 packs, and multiply this number by the number of options that you’re selling. Let me give you an example. I recently sold 8 put options of Apple at a 133 strike price. So how do you know whether you have enough money in your account? Well, this is where we are taking the strike price, 133 times 100, times 8. This means you would need to have $106,400 in your account. So please make sure that you are sizing your account appropriately. The good news is, if you do have the PowerX Optimizer, which is the tool that I’m using, it will show you exactly how many shares you can trade. So what you need to do here is that you are actually filling in your buying power, and again, your buying power might be different. How many positions you want to take, and this is where I said if you have a smaller account fill in three, if you have a larger account you want to fill in four or five. Then based on the strike price that you are selling here, it will tell you exactly how many options you should trade, and based on how many options it also tells you how much money you need, and how much margin is required if you were to get assigned. I highly, highly, highly recommend that you do use a tool, because you see, if you do all the math in your head, it can go horribly wrong. The tool that I personally use is the PowerX Optimizer. Many of you already have the tool, many of you are familiar with it. 5.) Is there a certain percentage you buy to close at? Some people say 50% profit is best statistically to close. I like to close a position at 90% of the max profits. So as an example, this morning (March 10, 2021) I sold puts on DKS, Dick’s Sporting Goods, and I sold them for $0.75. So this is where right now I have a working order in there to buy this back at $0.07, which is 90% of $0.75. So, yes, if I can get 90% of the max profit here, this is when I want to exit. 6.) So is there a rule of thumb of what percentage this account is tied up with the strategy? It really depends on how many trading strategies you use, right? So right now I trade two strategies. I trade the PowerX Strategy and The Wheel Strategy. The PowerX Strategy is perfect for a trending market, but the markets right now, are far from trending. They are super choppy going up and down, so, therefore, right now I’m dedicating all of my money in the account to the Wheel Strategy. Once I start trading the PowerX Strategy again, this is where I would just decrease the buying power here and say instead of using the $500,000, I might just use, let’s say 400K, and use 100k for the Wheel Strategy. 7.) What screening criteria does the PowerX Optimizer use for the Wheel Strategy? The PowerX Optimizer has a built-in scanner to find the best candidates for the Wheel Strategy, and there’s a conservative scanner as well as an aggressive scanner. For my criteria, we are looking for stocks between $5 and $300 here. We are also looking for stocks that have a down day because when you’re selling put to collect premium, you want to make sure that you’re selling when the market is going down. We are also looking at the implied volatility because want to make sure that there’s enough premium there. Then most importantly, we want to make sure that the annualized premium is actually at least above 30%. There are a few other minor criteria. First of all, we only look for stocks that have weekly options. This is what I explained briefly a little bit earlier, I’m not interested in trading stocks that only have monthly options. 8.) What can I expect? 30% yearly annualized based on what capital? The capital here this would be based on is the buying power. So in my account, I have a $500,000 buying power. This means if I’m looking for 30% based on the buying power, so this would yield into 60% based on the cash that I put in the account because the cash that I put in the account was $250,000. So when I’m talking about the 30% yearly annualized, it’s based on the buying power. If you don’t trade with margin, then this would be based on your cash. Picking The Right Stock: 9.) Do you have a defined universe of stocks that are your “good list?” Well, first of all, I want to make sure that I’m trading the stocks from the PowerX Optimizer Scanner, and then I just look for stocks that I like overall. These are some of the stocks I've traded thus far this year: There's been DBX, DKS, GDXJ, HAL, HAS, IBM, JWM, LL, MARA, MNST, NIO, RIDE, RIOT, SNAP, and many more others. These are stocks that I really like to trade, and as you see, most of them are very well-known names so I’m not trading any exotic stocks. You also will not find meme stocks like GME or AMC on this list here. 10.) Is there a certain level of IV, implied volatility, on a stock that you won’t go to? I’ve traded some 200% plus of IV is that too high? Just as a rule of thumb, the higher the IV the higher the risk. This means that now stock can really swing back and forth. So for me, what I feel is a sweet spot, I like to see at least 40% IV, but no more than 100%. Sometimes I do take trades that are higher than 100 but honestly, for me, the sweet spot where you find most trades that are fairly safe is anywhere between 60% to 80% implied volatility. This is where I don’t have hard rules here, but I need to like the stock. 11.) Markus, have you changed from your “When I started I just wanted to know the symbol. I did not want to know anything about the company, as it might cloud my view. Trade what you see, not what you think” mentality? My answer is NO, for the PowerX Strategy. I absolutely do not want to know anything about the symbol. However, for the Wheel Strategy, the answer is YES because when trading The Wheel Strategy I only want to trade super solid stocks. 12.) So I noticed that some of the stocks on your list for the Wheel have very illiquid weekly options. Do you watch for options liquidity or just the credit limit and hope to get filled? For me, I don’t care about open interest and volume, and here’s why. I am selling premium and I’m fine letting the option expire worthless, so I don’t need to buy it back. If I can buy it back I will, otherwise no. So this is where here I don’t care about the open interest. But again, it really depends on the strategy. I mean, if you’re trading a different strategy, open interest and volume might be very important to you. For me, it is not. 13.) Besides technical support/resistance levels, how do you objectively decide which are the best stocks? Do you take into account any fundamental analysis to filter out which underlying to trade? No. So here is what I do, and this is it’s pretty subjective, so I don’t have objective criteria here. I must like the company, because the point is, you must be OK owning this company, and I must like the story of the company. Yeah. This is where I always use Peleton as an example because I know that many are trading Peleton and it has lots of premium in there. But you see for me, Peleton, it’s a company that I believe can easily be ripped off, and at some point, a major competitor might swoop in. So I must like the company and the story of the company. This is fairly subjective here because the key is that you must be OK owning that stock at the strike price. 14.) Since you are suggesting not to sell puts on leveraged ETFs, why are they then included in the Wheel Scanner? You know what? This is a great question and we actually might exclude them in version PXO 2.0. So right now I thought you’re all adults, and as adults, you can do whatever you want. I did not want to restrict you, so but we might exclude it or, we might add an asterisk as a warning sign. It’s a good suggestion, and I know that some get blinded by premium on leveraged ETFs. So I do not trade leveraged ETFs, anything that has 2x or 3x in the description I stay away from this. 15.) Why do you select growth stocks only instead of a mix of value and growth stocks? Seems that growth is in trouble due to interest rates. Growth stocks offer attractive premiums, but value stocks rarely do. I want to give you a very specific example here, and let’s actually go to IBM, because IBM is one of the value stocks that I have traded. I traded IBM after a massive drop where I sold the 117 strike. Usually in IBM, you won’t find enough premium in there. The implied volatility lately, is usually around 34 or 29. So this is the very simple reason why I’m going for growth stocks because I’m looking for a minimum of 30% annualized in premium. Selling Calls After Getting Assigned 16.) If you sell a call lower than your original put strike price can you still make money? This is actually super dangerous, and here’s why. So when you sold a put you got assigned, and you had to buy stocks at the strike price. I’m using an example of AAPL, and I was assigned Apple at $133 per share. Now, if I’m now selling a call, it means that I have to sell stocks at the strike price, so if I’m selling, let’s say a 125 call, it means that I have to sell the shares for $125. Now here’s the challenge with this. I bought them for $133 and now I’m selling them right now for $125. This means that I’m losing $8 per share. Now when you’re trading options, they come in 100 packs. So this means that you would lose $800 per option. So this is where you need to be careful when you’re selling a call lower than your original strike price. If you do this, make sure that it is above your cost basis, and we’ll talk about the cost basis here in just a moment. 17.) Why are covered calls more profitable in your experience than cash-secured puts? Are you targeting a different percentage return? No, I do not. Here’s a rule of thumb for what I do. Let’s jump to PowerX Optimizer and go to the Wheel Income Calculator. Here is something that I did today (March 10, 2021) where I sold calls on RIDE. Yes, and let me, let me quickly double-check before I do this, what did I sell on RIDE? So on RIDE I sold calls that expire March 19th, and I sold them for $0.35, and the calls that I sold were at 23. So by doing this, this actually gave me an annualized return. By default, I am not going as many strikes out, because all I need here right now is a rise in 7%. So if you are rising seven percent here, then I will be able to make money not only on the premium that I collected, the 16.45, but also an additional $7,000 on the stock, right? So this will be a total of $8,500. It’s just the nature of the beast because when you are selling calls you’re usually closer to the strike price, and therefore, usually higher premium for a higher ROI. This is why I keep telling you, I’m always looking forward to getting assigned because selling calls is actually more profitable. 18.) When you sell calls to reduce the cost basis, do you also include the premium received from selling first the put to reduce the cost basis? Yes, I do include the premium. 19.) Is there a risk of the portfolio becoming nothing but stocks and not being able to sell covered calls out of the money (OTM) to hit your targets? The answer to this is absolutely yes. When trading there’s risk, and there is a possibility that you own a bunch of stocks and you cannot sell calls against. So you have to hold on to these, and so for a few weeks, it could absolutely happen that you’re not making any money. I was recently assigned shares of AAPL, and have not been making any money with them because I have not been able to sell calls. But you see, even though I have one dud in my account, it’s only one of my positions, and I still have been able to make almost $51,000 in about 8 or 9 weeks. So, therefore, it’ll even out. So is there a risk? Absolutely. When trading there is always risk. If you are not willing to accept the risk when trading, do not trade, because there’s always the risk of losing money. 20.) Markus, if you haven’t sold a call against the Apple 103 strike price haven’t you been missing out on money? Not really, and here’s why. Right now, if I would try to sell a 133 call on Apple, that is, for example, expiring this week, I would get $0.01. I’m not missing out on any money, right? $0.01 translates into $1. So, no, I’m not missing out. Even if I would go out next week and I’m looking at the 133, I would only get $0.14. That’s $14. For me, it’s not worth it, and again, everybody’s different, so you might have different rules. For me, however, it’s not really worth it. 21.) When running a rescue mission on margin, how does one sell a covered call? My broker requires cash for any call that I sell. If this is true, change the broker immediately, and here’s why. So I own Apple shares, and if right now I want to sell calls against these Apple shares, let’s say 8 calls, it would not have any effect on my buying power. It’s the opposite So here I highly recommend you change the broker if this is true. Your margin requirements should be reduced when selling a covered call, this is how it works. 22.) Why not still sell calls at your cost basis after the stock drops? Because sometimes there’s not enough premium. If there is enough premium, I will do it, but sometimes there is simply not enough premium and then you are sitting on your hands. This is why I said I have this, the one dud in my account, AAPL, is not making me any money, but everything else IS making me money. I was able to sell calls against GDXJ and RIDE. With DKS, MARA, and SNAP, I sold puts. So everything else is making me money. I mean can’t change the wind, I can only adjust my sails and this is what I’m doing here. What To Do When A Trade Is In Trouble 23.) What do you mean by “rescue mission” for those who have not heard it before? But a “rescue mission” is where you have been assigned shares, and now the trade is going against you. You sell more put options below the assigned strike price. By doing this you collect more premium. If you are assigned, you lower your cost basis, making it easier to get out of that trade. You only should consider flying a “rescue mission” if the stock is down at least 30% from your assigned price. 24.) Why not still sell calls after your stock drops? Because there might not be enough premium in there. So very simple, right? If there is, we will do it, if not like with AAPL for me right now, then it is what it is. 25.) What happens when you run out of buying power and can’t sell calls at your target? So first of all, you can always sell covered calls, because you will not run out of buying power for selling covered calls. What they probably meant is what about not being able to sell puts, and there are two things that you can do. Number one, you can either wire more money into your account, which is probably not always feasible. Number two, you can simply close some positions to free up some buying power. 26.) Is it possible to buy options rather than sell options because selling options is supposed to be very dangerous? Well, of course, and that would be the PowerX Strategy. So with the PowerX Strategy, you are buying options if this is what you prefer to do, and if you’re trading the Wheel Strategy, this is where you’re selling options. So pick your poison. I mean, you got to do one thing, either you’re buying options or you’re selling options. So I have a strategy for each of these. 27.) Any point in waiting to make sure that the market has stopped dropping before flying a rescue mission? Yes! You don’t want to try to catch a falling knife. Wait until you see that the market or the stock is stabilizing here. 28.) I understand starting the rescue mission when the stock drops 30%, how do you determine the new put strike price to enter? The next support level? Yes, absolutely. This would be the next support level that you’re looking at. I got assigned at 21.50, and the next possible support level is right around 12,13, so this here it would be a strike price of 12–13, so this is where I would do it. If we go to Apple, which is another stock that I have, I did get assigned here at 133 and the next support level is around 108, right? So I would probably be most interested in selling the 108 strike price. 29.) It’s hard to make money on a small account unless you get assigned. Yes, it is hard to make money on a small account, period. I know that many want to start with a smaller account, like $500 or $1,000, but honestly, it is super, super, super difficult to make money on such a small account. In order to do this, you would have to trade this account way more aggressively, which means that you are basically risking a whole lot. So if you want to try to double a $500 account, you basically have to risk the full $500. This is what many Robinhood traders and these YOLO’ers do. It’s all-in and maybe it doubles or you lose all of the money. So, yes, it is absolutely difficult. So this is why the capital requirements, I highly recommend that for the PowerX Strategy if you want to trade it, that you have at least $5,000, and if you want to trade the Wheel Strategy, that you should have at least $10,000 in cash, which gives you $20,000 in buying power we talked about this at the beginning of the show here. So this is super important. If you do have smaller accounts, there might be trading strategies for you. I want to be honest with you though if there are, I don’t know them. When I started trading, I started with an $8,000 account and I saved until I had $8,000. Now, I shredded that account into pieces, down to $1,600 and then I saved money up again. Then the second account that I was trading was $16,000. Now that one, I also lost more than half. So I lost, I traded this down to $8,000 and this is when I put some more money in, brought this up to $12,000, and this is when it finally clicked. So again, if right now you have a smaller account, good luck, there might be strategies out there. I wish I had some for you. I promise, if I knew how to grow a $500 account I would tell you. If right now, if all I had to trade was with $500 to trade, I wouldn’t do it. I would probably find a way to save money or make extra money with Door Dash, Insta Cart, or something like this until I have at least $5,000. I wish that I could tell you something different, and unfortunately, I can’t. I’m not saying that it is impossible. All I’m saying is that I’m not the right person to teach you these strategies because I don’t know them. Summary If I didn’t cover a question here in this article that you may have, I promise I’m reading through all of the questions that you have, and I will answer them in one of the upcoming Coffee with Markus episodes. I hope that you enjoyed this article because I love talking about trading. Anyhow. Have a fantastic rest of your day and I’ll see you on the next one.
TVC:NDQEducation
by rockwelltrading
DOW JONES debit spread play with good chanceI've opened a LONG CALL VERTICAL spread yesterday end of day for Dow Jones. Correction maybe consolidated, I'm expecting some short squeeze soon. Otherwise the probability of profit is godd, and the trade is manageable because of lower strikes. (1) Relative Implied Volatility is low I'm using my Relative implied volatility indicator to determine the credit/debit type of option trades. Low relative implied volatility justifies debit option strategy (longing options) instead of creadit strategy (shorting options) (2) Neutral RSI - no oversold or overbought Uptrend still holding after a quick correction. My Smooth RSI indicator is in no one's land. There is plenty of room up and down. (3) Observing other Down Jones instrument Every Down Jones instrument pretty same indicator values for RSI and RIV too: DJI, YM, DJIA, DIA CONCLUSION: I'm using LONG CALL VERTICAL - Buy 1 DIA April16' 305 Call Sell 1 DIA April16' 310 Call Debit call spread for 3.92 debit Probability of Profit: 67% Profit Target relative to my Buying Power: 26% Max profit: 105$ Max loss at expiry: 395$ (Buy Power) Max loss with my risk management: ~120$ Tasty IVR: 3.1 Expiry: 38days Stop/my risk management: Closing immediately if daily candle is closing below $309 Take profit strategy: I'm taking at the 55% of max.profit in this case with auto sell order. (at 4.55 debit) If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW, and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
AMEX:DIALong
by TanukiTrade
6
My #tradingview Win-win-win covered calls & naked puts on $RBLX This is my new go-to this year for options trading, I own shares in $RBLX, so as the share price goes up, my shares benefit.... Also since options just released for Roblox, they are all over priced, so I'm selling covered calls that expire in 3 days and collecting $240 each call. Also in combination I'm selling a naked put expiring in 3 days at $65 (and I'm defs 100% ok owning RBLX at $65) for extra premium collecting.
NYSE:RBLXLong
by leongaban
2
Using VXX as VIX alternative with good P/L Yesterday I've played an alternative VIX instrument. I've tired to searching good ROI or P/L rates at VIX $20 VIX support, so I've searched some alternative, but VIX related instrument. Lets see what can give us this BARCLAYS BANK VIX Short ETN (=VXX) (1) Yearly support + incoming buy volume The lowerst value of the previous year was $13. In the past month significant buy volume arrieved. Combined this two reason could lead into sidewalking or bounceback from this level. VXX is a Trust, so we see volume displayed (unlinke in the case of the VIX) (2) VIX play ROI vs VXX ROI You could see VXX like an ETN alternatative of the VIX. Same dates for big edges, and melting down between the big edges. Compared this two instument's ROI: the conclusion is obvious. VXX ROI at support $13 for April with vertical spread: 37/63 = 58% VIX ROI at support $20 for April with vertical spread: 20/80 = 25% CONCLUSION I'm buying a few call spreads for April, because the IVR not so high. I think this is a very good P/L rate with a very high probability of profit! Target: ............. 52% Max profit: ...... $111 Max loss: ......... $189 IVR: ................... 20 POP: .................. 65% Expiry: .............. 44days Strategy: long call vertical spread (average IVR) Sell 3 VXX April 16' $13 call Buy 3 VXX April 16' $12 call Stop: Closing immediately if daily candle is closing below $13. Take profit strategy: I'm taking at the 65% of max.profit in this case. If you liked this article, check my other ideas. Anyway: HIT THE LIKE BUTTON BELOW, and follow my fresh ideas ( @mrAnonymCrypto on tradingview ).
CBOE:VXXLong
by TanukiTrade
8
AAPL -very near term trade Idea I expect some very short term downside to finish this week. As can be seen on the four hour chart, rising wedge within a downward bearish channel. For short term I expect it to fall to position 5, finding a bottom and then reversing. Looking at the day chart I think its possible with the TTM squeeze turning positive as well as a possible cross on MACD we break out of the bearish channel and push higher permitting that there isn't any significant bad news market wide and for AAPL. Always do your own analysis before taking any position. share your thoughts.
NASDAQ:AAPLShort
by skmcgee
[ X ] United States Steel Corp short call vertical spreadLazy day, lazy trade. My Iron Condor Hunter script indicated a potential iron condor for this instrument for the 12 - 23 range. Let's check for the best setup for this signal. (1) Basic TA to background check After a quick TA I judged it too risky, because it limiting the downside potential correction. The script indicated good ranges in the past 4 years, but now I'm a little bit hesitating about the downside move limit. The script shows me 12$ as secury bottom target in the next 30 days, but the lowest low may be ~10$, based the green trendline (2) Murrey Math levels -1/8 and +1/8 are used for some kind of attempt to catch a trend reversal. -1/8 is an extreme support level during a bearish trend , while +1/8 is an extreme resistance during a bullish tendency. A test of these lines indicates that the current trend is weakening. As a rule, the price doesn’t revers here and starts corrections towards 0/8 and 8/8. After that, the previous trend resumes. On the weekly perfectly fit to my Murrey Math Lines Auto +1/8 script. (3) Daily divergence Divergence on daily chart , without any more comment..... Indicated local correction. Breaked down my custom oscillator => correction validated. CONCLUSION : Modifying the strategy from the originally planned Iron Condor to Vertical Spread. Sell 1 X Apr16' 21 call Buy 1 X Apr16' 23 call Max profit: ...... $80 Max loss: ......... $120 IVR: ................... 18.3 Probability of Profit: 73% Expiry: .............. 45days Strategy: Short call vertical Risk management: I'm closing the trade immediately - if the daily bar closing outside my strikes - and I'm cutting my loss. (no matter what I'm believing)- usually I'm losing mutch less than my max profit in this case. Danger zone starts at 20.28$ Profit management: I'm sending an order at the 50% of max profit, immediately after my position opened - as usually.
NYSE:XShort
by TanukiTrade
3
Trigger line's for spx's options total volume study11 signals: (Above 967449). ---------------------- Going down bottom going down going down up siwng bottom up swing bottom bottom bottom up swing --------------------------------- 3 going down, 5 bottoms, 3 up swings ---------------------------------- Summer: - 45 % @ bottoms. - 27% up swings - 27% false signals SAFER TO GO LONG !!!! --------------------------------------------------- *********************************************** 8 signals: ( Below 22818) ------------------------------------- 77 days before a crash 63 days before a top up swing @ a top going down 63 days before a top sideways 286 before a crash ------------------------ - 4 @ months before a top like months !!! - 3 false signals -1 @ a top -------------------------------- Summary: 50% months before tops 10% @ top 40% false signals
O
by samitrading
Why Most Traders Lose Money — Here Are The Top 3 ReasonsI’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Anyone that has been around the markets and trading for any period of time has probably heard that most traders lose money. In fact, there’s actually an old trading adage that says: 90% of new traders will lose 90% of their account within 90 days. So after reading that, before you reach for your broker’s phone number to wire out all of your money… how about I let you in on a little secret: If you follow some simple rules and avoid these 3 mistakes, you can be in that minority of traders that actually make money consistently in the markets. And if you are currently making one or all of the mistakes, I’ll also show you exactly how to fix it. So let’s dive in! 1) Most Traders Enter A Trade Too Late The first thing on my top 3 reasons why traders lose money is: Most traders get into trades WAY too late! There are a lot of reasons this happens, but most commonly it’s because new traders are basically gambling. They’re buying stocks or options based on news, or a hot stock tip, which really isn’t what I would consider a strategy. So let me give you a great example with a company I’m sure you’ve heard of: Uber Technologies (Yes, enemy #1 for taxi drivers worldwide.) Last year UBER , known for its popular ride-sharing and food delivery services, IPO’d in May (2019). With the disruption this company caused, their IPO had a lot of hype surrounding it, bringing a lot of investors to the table. On the day of their IPO, UBER opened at $42/share and people poured into the stock. For a few weeks, the stock had a turbulent, roller coaster of a ride all the way to as high as $47.08/share, a little over a 13% increase since its IPO. And around this new high, more and more inexperienced retail traders piled in thinking that it would continue its bullish run with dollar signs in their eyes. The mainstream media was continuing to hype it and more and more and investors and traders gobbled up more of the stock. Looking at the image below, you’ll see after that high of $47 things got UGLY fast, with UBER falling day-after-day, week-after-week. It wasn’t until November of 2019, about 7 months after their IPO that UBER found a temporary bottom at $25.58, down more than 45% from its high of $47.08… and I would bet there were a LOT of people who bought near or at the highs and were still holding at that point. So what did retailer traders do when UBER made a bottom? Yes, once again most (losing) retail traders didn’t get in at, or even around the bottom… once again, they piled as UBER neared its previous highs. And as you’ll see yet again, UBER rolled over on its way to making another new all-time low this past March 2020 going all the way down to $13.71/share. That’s more than a 70% decrease from its ATH and yes, I’m sure some investors rode it all the way to the bottom. Now I want to share a second example with you, so let’s take a look at Amazon AMZN . So as you know, AMZN is a HOT STOCK and last year it has a crazy move where it crossed $2000/share…. and yes, just like our example with UBER , inexperienced retail traders piled in at the very top. Once again, in the weeks that followed, AMZN’s stock tanked leaving those who’d piled in dazed and confused, now holding onto sizable losses. So as you can see, the first of my top 3 reasons most traders are losing money is simply because they’re piling in way too late in a stock’s move, generally near a high. Now on to reason number 2: 2) Most Traders EXIT Too Late Yes, as you can imagine if people are getting in too late, well, they’re also typically getting out too late as well. So let’s talk about why this happens. Why do retail traders tend to hold onto trades way too long, either turning a small loss into a BIG loss or sometimes even more painful, turning a winner into a loser? Let’s take a look at another example with an UBER competitor, LYFT . Like UBER, LYFT also had its IPO in 2019, opening up at $87.24/share… but that didn’t last long. In less than two months, LYFT went as low as $47.17… and what do you think those who bought during the IPO are saying right about now: “Oh, I’m holding it because IT WILL TURN AROUND!” This is generally where I see traders get religious Instead of ‘taking their medicine’ and getting out when the trade moved against them, they held on and are now pleading and praying the stock will turn around. I hate to be the one to break it to you, but ‘hope’ is not a strategy… at least not one with a winning trading record. Now on to number three in our list of top reasons why most traders lose money: 3) They Don’t Have A Trading Strategy As you’ll see, I’ve saved the best for last as this one alone can help fix or eliminate the other two we just discussed. So first, let’s answer this question: What Is A Trading Strategy? Well, a trading strategy gives you three key pieces of information you need before ever entering a trade: 1) It tells you WHAT you are trading. Is it stocks, options, futures, cryptocurrencies? This is answered in your trading strategy. 2) It answers when you ENTER a trade. 3) It answers when you EXIT a trade and that’s exiting with a profit or loss. Now, let’s take a look at an example here using TSLA on how I make trading decisions. I like to look at three different indicators, that when in alignment, give me a clear signal to go long or short a stock or ETF. As you can see on the charts, back in December of last year (2019) my indicators gave us a long signal on TSLA at around $370/share. And the indicators told me we were good to go until around $850/share. All I had to do is let the indicators tell me when to get in and when to get out… no guessing, hoping or praying. Summary So as you can see, there’s actually no big secret to why most traders are losing money. It’s actually pretty simple to see and correct, but it takes a plan and a little bit of discipline. If you’re brand new and not sure where to get started, I’ve written The PowerX Strategy, a book that outlines my EXACT trading strategy for trading stocks and options.
TVC:NDQEducation
by rockwelltrading
1