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I Show You My Trading Strategy Applied On EURUSD Hi, I decided to share my profitable trading strategy which is really simple by the way. I use trend lines, supports and resistances. I don't use any other indicator. It is maybe not the best but for sure the best that fit my psychology and my lifestyle. Hope this helps !

Education

04:04

Updated

An easy yet super efficient trading strategy for any market An amazing combo strategy for trading. Steps: 1. INTRUCTIONS Plot the 7, 14, 33, 60 on the chart Lets assume we use a 1h chart. For this we will plot on the support and resistance levels onto the chart using the 4hr or daily chart values. For other timeframes, change the values with a 4-8x difference. For this example I took BTCUSDT 1h, and you can see that the support and resistence on 4h is making the 30.5k - 41k channel more or less. 2. RULES Once we have established and marked the territory zones , lets get down to business. For the best results, it is best to enter the market when you find price hovering around a support or resistance level. Once price paints a confirmation candle you can enter the market, or you could wait until the 7 MA has crossed the 14 MA. Entries at MAJOR support and resistance levels are key and will provide a greater return. Always exit your trades once price returns to another support or resistance area. You can use the 33 and 60 MA as a stair stepper to get out of the market to protect your equity on your trades. However, re-entering the market once you get confirmation of the market continuing in the original direction is a safe move. Below you can find some examples for BTCUSDT 1H 3. RISK MANAGEMENT For STOP LOSS you can use the value below the support zone, while for TP you can use either the resistence point or the support zone from the 33 or 60 SMA or a multiplier of the original distance below the support zone .

Education

What Does the Ichimoku Cloud Tell You?The technical indicator shows relevant information at a glance by using averages. The overall trend is up when the price is above the cloud, down when the price is below the cloud, and trendless or transitioning when the price is in the cloud. When Leading Span A is rising and above Leading Span B, this helps to confirm the uptrend and the space between the lines is typically colored green. When Leading Span A is falling and below Leading Span B, this helps confirm the downtrend. The space between the lines is typically colored red in this case. Traders will often use the Ichimoku Cloud as an area of support and resistance depending on the relative location of the price. The cloud provides support/resistance levels that can be projected into the future. This sets the Ichimoku Cloud apart from many other technical indicators that only provide support and resistance levels for the current date and time. Traders should use the Ichimoku Cloud in conjunction with other technical indicators to maximize their risk-adjusted returns. For example, the indicator is often paired with the relative strength index (RSI), which can be used to confirm momentum in a certain direction. It’s also important to look at the bigger trends to see how the smaller trends fit within them. For example, during a very strong downtrend, the price may push into the cloud or slightly above it, temporarily, before falling again. Only focusing on the indicator would mean missing the bigger picture that the price was under strong longer-term selling pressure. Crossovers are another way that the indicator can be used. Watch for the conversion line to move above the base line, especially when the price is above the cloud. This can be a powerful buy signal. One option is to hold the trade until the conversion line drops back below the base line. Any of the other lines could be used as exit points as well.

Education

by MonoCoinSignal

ESSENTIAL FOREX TRADING CONCEPTS YOU SHOULD KNOW I want to start by talking about something that I frequently see when trading and “how-to” trade is being discussed. The concept of trading having to be simplistic and not too complex, that the simpler your trading is, the better. Having a simplistic approach to trading is not realistic; you must balance trading between simplicity and complexity. There’s a reason why 90-95% of “trying-to-be-traders” never become or will be consistently profitable. Think of it in terms of having data; if you have limited data, your system or edge won’t be effective. Most likely, it will be random. But having too much data and information can be overwhelming and too confusing to do anything with it. So the question becomes, how do you balance your trading approach between simplicity and complexity? We do this by understanding that trading falls into three categories. And by knowing the components and elements of each category, we can define the way we trade so that our decision-making and observations are guided by objectivity. Basically, a well-formed trading setup consists of these three elements. ----------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------- SMASH that follow button! 👍 💡 Leave a comment and/or message me on how I can improve and provide better content, I'm open to suggestions to create a better experience for you! RISK DISCLAIMER: Please be advised that I am not telling anyone how to spend or invest their money. Take all of my videos as my own opinion, as entertainment, and at your own risk. I assume no responsibility or liability for any errors or omissions in the content of this channel. This content is for educational purposes only and is not tax, legal, financial, or professional advice. Any action you take on the information in this video is strictly at your own risk. We, therefore, recommend that you contact a personal financial advisor before carrying out specific transactions and investments. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Inotfancy.com and all individuals affiliated with this channel assume no responsibility for your trading and investment results.

Education

The Crystal ball Strategy - How to Look into the future.There seems to be an endless amount of strategies out there, some promise fast returns while others promise consistency. Recently Ive started to gain some followers and have had some requests for strategies. Well today Im going to share one of my crackpot strategies I call "The Crystal Ball Strategy". This is not like most strategies that rely on indicators, in fact it uses no indicators at all. I don't often trade this one but every now and then I will use it to confirm a trade before placing an order. I stumbled upon to this while I living in the 1 second charts trying to script the perfect entry bot. I started to notice the loops would start on the 1 second chart then make there way to the 30 second, then the 1 min. The next day I would see the pattern on the 1 hour chart. Its like looking into a crystal ball and seeing the future. How it works. Its as simple as opening a split screen with a 1 min char and a 60 min chart. On the 1 min chart find the beginning of the current trend that you are looking at on the 1 hour chart. For the example I am using Bitcoin. Now its just a matter of comparing the two charts. If they are the same (which they normally are) you can setup your trade knowing if it is going to be a long or short and even how good it will be and where to exit. All the data for the 1 hour trend is stored in the first wave. Just a word of warning that things happen along the way like dumps that will change the future but if things coast along fine the 1 hour chart will usually match up with what you saw on the 1 min chart yesterday. Here you can see the 2 charts lined up. The 1 min chart is marked in a yellow box on the 1 hour chart. I have broken up the different parts for comparison. In this example the charts suggest to place a short. This is scrolled back left, you can see the 2 charts match characteristics. Im sharing this for educational purposes only and have not backtested it enough. I just figure some people may be interested and strongly urge you to not run out and put on a "YOLO".

Education

S&P 500: BASELINE | Investing and Trading for Beginners In this video I'm going over a way to start building an investment or trading strategy. Why is a strategy important? A strategy is a plan for survival in this financial world. With me (and some* others), you'll learn that such a plan is crucial for the success of the portfolio because the main focus is TIMING. More questions arise from that but it's best to focus on one question at a time.

Education

19:53

No its not a picture of Mickey Mouse...🐭It's a super clear diagram on what key ingredients you need to find the 'sweet spot' = profitability. The thing is, most people are desperately hunting for the holy-grail, you know - that 100% winning strategy... the silver bullet. It doesn't exist - I'm sorry. 😢 So even a profitable strategy that's awesome can blow your account if the other 'factors' are not considered.... Greed and risk management. With poor risk management you can blow your account on a profitable strategy. Much like if the casino didn't set a trade limit - they could go bust if a gambler got 'lucky' - because its the casino that has the mathematical 'edge', right? You must factor in your losing runs to ensure you not exposing your account to the 'risk of ruin'. So yeah a profitable 'edge' is key, but without managing your mindset and using effective risk management, its actually useless too. Having an understanding of probability is fine too - but if you don't execute your 'edge' or if you don't have one, you won't be profitable too. And lastly, yeah - you can have your risk management nailed on - but if you've not got a profitable edge too, you'll lose money. Just less money. You could absorb 500 consecutive losses on a £1000 account at 1% risk per trade, but you'd only have about £6 left. Your strategy would have to be really poor for that to happen! But you catch my drift, that effective risk management is vital. So in summary, you need these three key ingredients... Strategy with an Edge Effective Risk Management planning for probability Trading Psychology - (greed under control, no fear, discipline, resilience, etc) You can't get to the 'sweet spot' without all 3 being in perfect alignment. Good luck. Darren If this helps - please show me by liking this post if you can, its appreciated and I'll do more like this 😎

Education

by pow_removetheguesswork

Option Strike Price "Secrets" In this article you will learn... - what a strike price is, - the different intervals for strike prices, - how to pick the right strike price, … and much more. Let’s get started. 1.) The basics: What is the strike price? Strike Price Definition: The strike price of an option is the price at which the option buyer has the right to buy or sell an underlying security. As an example, if you are buying a CALL option of AAPL with a strike price of 126, then you have the right to BUY 100 shares of AAPL for $126. And if you are buying a PUT option of AAPL with a strike price of 125, then you have the right to SELL 100 shares of AAPL for $125. Strike Price Intervals When you open an options chain, you will see all the different strike prices that are available. The strike price intervals are set by the options exchange and will change depending on market conditions and the price of the underlying stock. There are four commonly used strike price intervals: $1, $2.50, $5, and $10. There are currently no strict standards and the exchange reviews and decides on the strike price interval of each optionable stock from time to time in order to adjust policies to better cater to trading needs. Here are some general guidelines provided by the Chicago Board Options Exchange (CBOE): - 2.50 points strike price interval is used when the underlying stock is trading between $5 and $25, - 5 points strike price interval is used when the stock is trading between $25 and $200, - and 10 points strike price interval is used when the stock price is over $200. But these are just guidelines. The options exchanges decide on strike price intervals based on market demand and trader’s needs) more than any strict mathematical formula. In the example above, you see that AAPL is trading at about$127. So according to the guidelines, the strike price interval should be $5. But since AAPL is a very volatile stock that currently moves $2.50 per day on average, which is around 2% per day, the $5 strike price intervals wouldn’t make sense. That’s why the exchange decides to only offer $10 intervals to best serve the trader. Strike Price, Option Premium & “Moneyness” When buying or selling an option, you must choose a strike price, and often you will hear terms like: - In-The-Money (ITM), - At-The-Money (ATM), - or Out-Of-The-Money (OTM). I call this the “Moneyness” of an option. In-The-Money Options Strike Prices (ITM) TM Call Options will have strike prices below the current stock price. And ITM Put Options will have strike prices above the current stock price. In the example above, AAPL is trading at around $127 right now. Therefore, the strike prices of 125 and below are considered ITM for Call options. And the strike prices of 128 and above are considered ITM for Put options. At-The-Money Options Strike Price (ATM) An ATM option would be the closest strike price to the current market price of the stock. For our AAPL example (The current price is about $127), the strike prices of 126 and 127 are the closest strikes to the market. So these strikes are considered ATM for both Call and Put options. Out-Of-The-Money Options Strike Prices (OTM) An OTM Call Option’s strike price would be above the current market price of the stock. With an OTM Put Option, the strike price would be below the current market price of the stock. For our AAPL example (The current price is about $127), the strike prices of 128 and above are considered OTM for Call options. And the strike prices of 125 and below are considered OTM for Put options. 2.) How to Pick the Right Strike Price Wow! So many strike prices! So how do you pick the right option strike price? Are some strike prices more desirable than others? Absolutely! It really depends on what you are trying to accomplish: Do you want to BUY an option and make money? Do you want to SELL an option, collect premium and let it expire worthless or Do you want to SELL an option, collect premium, and get assigned? For now, let’s keep it easy. Let’s say you want to make money with a CALL option. Call option strike price example We will use AAPL again as an example. Right now, AAPL is trading at about $127. Let’s say you’re bullish AAPL and expect Apple to move up to 135 within the next month. If you were to look at an options chain, you would have several choices. a.) You can buy a cheap OTM option with a strike price of 135. The last price of the option was $0.86. Since options come in “100 packs”, you would have to pay $86 for the option. This would allow you to buy 100 shares of AAPL at a price of $135. b.) You can buy an ATM option with a strike price of 127. This option is more expensive. The last traded price was $3.80, so you would have to invest $380 for this option. And this option would allow you to buy 100 shares of AAPL at a price of $127. c.) You can buy an ITM option with a strike price of 124. This option is the most expensive. The last traded price was $5.90, so you would have to invest $590 for this option. And this option would allow you to buy 100 shares of AAPL at a price of $124. Now let’s say that AAPL never goes back up to $135. Let’s say that on expiration day (June 11), AAPL is trading at $134: a.) OTM Option with a strike price of 135 This option allows you to buy 100 shares of AAPL at $135. Since AAPL is trading at 134, that wouldn’t make sense. Why would you pay MORE for 100 shares of AAPL than the underlying stock price? So this option is worth nothing, and you lose the $86 option premium that you paid. b.) ATM Option with a strike price of 127 This option allows you to buy 100 shares of AAPL at $127. Since AAPL is trading at 134, you could buy 100 shares at $127 and immediately sell them for $134. In this case, you would make 134–127 = 7 per share. 1 option allows you to buy 100 shares, so your profit is $700. You paid $380 for this option and make $700. That’s a net profit of 700–380 = 320 or 84% based on your initial investment! c.) ITM Option with a strike price of 124 This option allows you to buy 100 shares of AAPL at $124. Since AAPL is trading at 134, you could buy 100 shares at $124 and immediately sell them for $134. In this case, you would make 134–124 = $10 per share. 1 option allows you to buy 100 shares, so your profit is $1,000. But you paid $590 for this option to make $1,000. So the net profit of this trade is 1,000–590 = 410 or 69% based on your initial investment. Let’s review: OTM Option: $86 loss ATM Option: $320 profit = 84% ITM Option: $410 profit = 69% As you can see from this example, it’s super important to pick the right strike price. The underlying security (AAPL) moved from $127 to $134. That’s a 5.5% move. Often traders who are new to options pick the cheapest options contract, i.e. the OTM option. But you would have lost the whole option premium. So should you pick the most expensive one? As you can see in this example, picking the most expensive option (i.e. ITM option) would have yielded the higher DOLLAR amount. But in terms of Return on Investment (ROI), the ITM option was best. Based on the trading strategy that you use, I can give you several guidelines on how to pick the right strike price. In a nutshell, when you are BUYING options, you want to buy an ATM or ITM options contract. And when you are SELLING options, you want to sell OTM options. More about that later. 3.) Three Important Things You Need To Know There are 3 more things you need to know when about strike prices when trading options: What happens when a call option hits the strike price? What would have happened if AAPL would have traded above the strike price of $135 before expiration? Nothing — unless you choose to exercise the option. But if this happens before the expiration date, then it would be better to sell the option since you would make more money. How do I change my strike price once the trade has been placed already? You can’t. You need to choose a strike price when you enter the trade, and you can’t change it while you are in a trade. You can only “roll” the option, and here’s how it works: Let’s say you bought the OTM option with a strike price of $135. And you realize that it was too ambitious and that AAPL probably won’t hit 135 before the expiration date. So you could “roll” the option by selling your 135 call and simultaneously buying the 132 call. What Is Spot Price and Strike Price? The SPOT PRICE is the current price of the underlying security, so using AAPL as an example, Apple’s current spot price, at the time of this writing, is $126.76 which is the price it’s currently trading. The STRIKE PRICE is the price at which you can buy or sell the shares of the underlying security on or before expiration. Summary s you can see, picking the right option strike price is extremely important. It will affect your returns and it could even make or break you in the market. In a nutshell, when you are a BUYER, you want to buy ATM or ITM options since even a small move in the underlying stock price can yield double-digit returns. When you are a SELLER, it’s the opposite: You want to sell OTM options that have a low probability of getting assigned.

Education

by rockwelltrading

Sell In May and Go Away?You might have heard the saying “Sell in May and go away.” It is an old investing adage that has been around for decades, but does it actually work? In this blog post, we are going to find out what’s best to do. We will discuss: 1. What is the meaning behind “Sell in May and go away?” 2. Does sell in May and go away work? 3. Should you sell in May and go away? 4. Two reasons not to sell in May and what to do instead. Let’s get started: 1. What Is The Meaning Behind “Sell In May And Go Away?” The saying “Sell in May and go away” has been around for a long time. It was first recorded in 1937 by John Hill via The Financial Times of London. The original saying was “Sell in May and come on back on St. Leger’s Day.” This phrase refers to a custom of aristocrats, merchants, and bankers who would leave the city of London and escape to the country during the hot summer months. St. Leger’s Day refers to the St. Leger’s Stakes, a thoroughbred horse race held in mid-September and the last leg of the British Triple Crown. And it seems that American traders have adopted the saying. Americans are more likely to spend more time on vacation between Memorial Day and Labor Day. 2. Does “Sell in May And Go Away” Work? And indeed, for over 50 years, the stock market performance supported the theory behind the strategy. From 1950 to around 2013, the DOW has had an average return of only 0.3% during the six-month period from May to October period. In comparison, the Dow had an average gain of 7.5% during the November to April period. So it seems that “Sell in May and Go away” is a strategy that may have worked for many years. But In recent times, it seems like the strategy has fallen out of favor. Technical analysts at Merrill Lynch looked at historical data and found THIS out: Looking at 3-month seasonal data going back to 1928, the June-August period typically is the second-best of the year, with gains 63% of the time, and an average return of 2.97%! 3. Should You Sell In May And Go Away? With all this conflicting data, does it make sense to sell in May and go away? Is this a good investment strategy? You know me — I always say “Trade What You See And Not What You Think!” Always look at the market data! As an example, last year, between May 4th and August 31st, 2020, the Nasdaq rose 28% (refer to chart). If you would have sold in May and "gone away," you would have missed out on these gains. 4. Two Reasons Not To Sell In May And What To Do Instead Maybe it makes sense to sell in May and go away when you’re an investor. MAYBE... But as a short-term trader like me, May is a GREAT month to trade, and here’s why: I like to trade The Wheel Strategy . With this trading strategy, you are selling option premiums. And there are 2 factors that influence options premiums: - Volatility When volatility is high, option premiums are higher. The Volatility Index VIX for the past few month, has been pretty low in March and April. But now, in May 2021, it's spiking up again. This means that options premiums are higher, which is perfect for a seller like me: I can get more premium! - Down Days Step 1 of The Wheel Strategy is selling puts, and you get more premium for puts on “Down Days” for such strategies. According to the NASDAQ , thus far, in May 2021, we had 7 “down days” and only 4 “up days." On “down days," there are many more trading opportunities. Last week, when the Dow Jones Industrial Average had its worst week since February, I made $3,722 in profits. Here Are Some Of My Trades In May: Let’s take a look at these trades in more detail: - Trade #1: Snapchat SNAP Snapchat recently had some rough weeks. In less than 2 months, it traded from a high of 72.50 to around $50 where it found some support. Most retail investors would stay away from a stock like this but I saw an opportunity to “buy it at a discount” : I sold Puts with a strike price of 47 and an expiration of 4 days. If SNAP closed below $47 on May 14 (the expiration date), I would have gotten assigned and bought SNAP for $47. I would consider that a bargain. If SNAP closed above $47, I would have just kept the premium that I received for selling calls. In this case, that’s $525. SNAP did close above $47 on May 14, and I collected $525 for 4 days of exposure in the stock market. - Trade #2: Square SQ Square looked very similar: Mid-February, the stock made a high of $280, but then it retreated to $200. Most market participants would not trade a stock like this, but looking back over a six-month period, I saw some good support around the $200 — $203 level. I sold 5 Puts with a strike price of 202.50 and an expiration date of May 14th. I received $100 in premium for each put, so I collected $500 in premium. On May 14, SQ closed above $202.50, and I made $500 in only 4 days. That’s a very nice return. - Other Trades I Took I sold 119 Puts on Apple , sold 212.50 Puts on Boeing , And I sold 39.50 Puts on Dave & Busters . All of these stocks have lost in value over the past few months. Investors who follow a ‘buy-and-hold approach” would lose money in this scenario, but as an active investor, I can apply trading strategies that make money even if the stock is going sideways or even moving lower. Summary “Sell in May and go away” is an old Wall Street adage that might be useful for buy-and-hold investors. But active investors like me are always on the lookout for trading opportunities. And with the right trading strategy, the increased volatility combined with markets that are moving lower is a dream come true. You need to have the right trading strategy. I personally like to use the PowerX Strategy for markets that are trending, and I trade The Wheel Strategy in choppy market conditions as we experience right now. With such a strategy, I am able to make money even if the stock is going sideways or lower. I for one will NOT sell in May and go away!

Education

by rockwelltrading

Option strategy buy Straddle / Strangle In this post, I will start from the example and then write the definitions. Our example will be on Boeing (BA), a hypothetical analysis might be that BA was trading sideways for more than half a year. Previous to that BA was down in price for more than 50%, also there was a rally of 100% between May and June. The volatility in the markets starting to rise, due to Covid-19, election, lockdowns, blue or red waves, vaccines, other news, etc. The trader expects a large move but doesn’t sure in which direction. Also, the rise in volatility enters into consideration, by our trader. The trader search for a strategy that can be profitable in any direction and a rise in volatility will benefit him. Straddle buying A straddle purchase consists of buying both calls and puts with the same stock, option striking price, and expiration date. The straddle purchase allows the buyer of the options to make large potential profits if the stock moves far enough in either direction. The strategy has a limited loss and theoretically unlimited profit. Buying a straddle should be done on stocks that have the potential to be volatile, this strategy is even more attractive if the options premiums are relatively low, which makes the straddle cost less and if the volatility will rise the buyer will profit much quicker. In general, the probability if held to expiration is near ~40%. Most of the traders don’t wait till expiration. The options are At the money. The example on the chart: Blue lines – profit lines, yellow lines – break-even, red lines – 50% of maximum loss reached. Red zone – in this area the strategy losses money. The options are from 30/10/2020 close in BA. The strategy bought for -> 47.35, meaning a debit is being paid. Stock price-> 144 , Upper strike (call)-> 140, Lower strike (put)-> 140 Days-> 203, Impleid volatility-> 54.4% (0.544), date-> 30/10/2020 The maximum loss is the debit paid for the strategy, in this case, $4735, the chance to lose all of it is less than 1%, the price needs to finish at expiration exactly at the strike price of the options $140, which means all the options will be worthless. If the price will finish exactly at $163.69 a loss of 50% of the debit paid will occur, the puts will be worthless but the calls still have some value, but less value than the debit paid. If the price will finish exactly at $116.33 the trader will also lose 50% from the debit, but now the calls are worthless and the puts have value. If the price will finish between $116.33-$163.69, a loss of 50%-100% from the maximum profit will be realized. The prices of $92.65 and $187.35 represent the prices at which the strategy will break-even. At the lower price, the calls will be worthless and the puts will have value, at the higher price the other way around. Those prices can be calculated: Upper break-even point -> the strike price + the debit paid = 140+47.35=187.35 Lower break-even point -> the strike price - the debit paid = 140-47.35=92.65 The strategy presented on the chart has 147 days, before starting to lose 50% of the maximum loss (Debit paid). If at any point the stock price will reach the dark blue line the strategy will profit $4735 if the light blue line will be reached the profit will be $9470. How implied volatility affects the position? (20% increase and decrease) 20% IV increase -The buyer wants the implied volatility to increase, the strategy will start profit much sooner. The purple zone is the new loss area, the new area is much smaller than the previous one. The break-even lines are much closer to the end date and each other. It will take more time to reach the 50% loss lines 173 days instead of 147 days. 20% IV decrease – If the implied volatility will decrease, the purple loss zone will grow substantially, the break-even lines will go farther from one another and the 50% loss line could be reached much sooner, 63 days instead of 147. Strangle Buying A strangle is a strategy that uses both calls and puts, which have the same expiration date, but different striking prices. The difference between a strangle and a straddle is that the options are now Out of the money, because of that the strangle cost less than the straddle. The example on the new chart: Blue lines – profit lines, yellow lines – break-even, purple lines – 50% of maximum loss reached. Red zone – in this area the strategy losses money. The options are from 30/10/2020 close in BA. The strategy bought for -> 23.95, meaning a debit is being paid. Stock price-> 144 , Upper strike (call)-> 190, Lower strike (put)-> 125 Days-> 203, Impleid volatility-> 54.4% (0.544), date-> 30/10/2020 Those options were chosen because they have a Delta of 0.3 The maximum loss is (-$2395) if the price will be at expiration between the strikes 125-190, the strategy will lose all the debit. (Broken red lines) The other lines are the same concept as the straddle and their outcome is shown on the chart. The break-even point calculation at expiration: Upper break-even point -> the upper strike price + the debit paid = 190+23.95=213.95 Lower break-even point -> the lower strike price - the debit paid = 125-23.95=101.05 The strangle presented on the chart has 101 days, before starting to lose 50% of the maximum loss (Debit paid). The increase and decrease in volatility will have the same effects, thus in the buyer analysis will anticipate an increase in volatility. This post is related to previous posts. You can come back and see what will happen with this particular example. If you have any questions, please ask.

Education

Updated

Options vs Stocks: Which Is Better?If you are wondering whether to trade options vs stocks, then this article is for you. There’s no simple answer to that question because it depends on how much money you have and your risk tolerance level. This blog post will cover the 7 topics that you need to know to answer the question “Is Options Trading Better Than Stocks?” 1. What Is The Difference Between Buying Stocks and Buying Options? Let’s keep it simple: When you buy a stock, then you own a share of the company and get paid dividends. Buying options, on the other hand, means that you only have the right to buy or sell a stock at a specific price before the option expires. But you don’t own the stock (yet). As you will see in a few moments, options trading requires much less capital than buying a stock, and therefore it’s very attractive. But it can also very confusing. My goal is to make it simple for you. Let’s start with an example: 2. Which Is Better: To Buy A Call Option On A Stock Or To Buy A Stock? Let’s use Apple (AAPL) as an example. Right now, the market price (at the time of this writing on May 6th, 2021) of AAPL is 128.70. Let’s assume, you are bullish on Apple and expect AAPL to go higher. So you could buy 100 shares of AAPL, but this would come with a high price: 100 shares * 128.70 per share = $12,870 If you have a small account, this might be too high of an investment. The good news: You can trade options instead. When you buy a CALL option, you have the right to buy 100 shares of AAPL at a set price (the strike price) on or before the expiration date of the option. You could buy a call option that expires on June 18th. Today is May 6th, so you have 43 days before this option expires worthless The price of the option is $3.75. Options come in “100 packs”, so your investment to buy this call option is only $3.75 * 100 = $375 Why Buy Options Instead Of Stocks? First of all, it’s much cheaper: Compared to the investment of 12,807 to buy 100 shares, that’s only 3% of the money that’s required. And because of that, options more profitable than stocks. Let me explain: 3. Are Options More Profitable Than Stocks? Since you are bullish on AAPL, you expect the stock to go up. Let’s say that over the next few weeks, the stock goes to 140: Let’s take a look at the profits from your stocks first: You bought 100 shares of AAPL at a price of $128.70 per share. Now each share is worth $140. So your profit is 140–128.70 = 11.30 per share * 100 shares = 1,130. Based on your investment of $12,870, that’s 8.8% Return on Investment (ROI). That’s not bad, but let’s take a look at the call option: How Are Options More Profitable Than Stocks? The call option that you bought gives you the right to BUY 100 shares of AAPL for $130 before June 18th. So if AAPL shares move up to $140, you can buy 100 shares of AAPL at $130 and sell them immediately at $140. This means that your profit per share is 140–130 = 10. And since you are trading 100 shares, your profit would be $1,000. But keep in mind: You paid $375 for the right to do this, so you need to subtract this from your profits: 1000–375 = 625. Your total profit is $625. Doesn’t sound much, but based on your $375 investment, that’s 167% return on investment (ROI). In summary: You made more money in terms of absolute dollars on the stock ($1,130 vs. $625), but the money you needed to make this profit was much less: $375 vs. $12,870. And that’s why your ROI is 167% when trading the option vs 8.8% when trading the stock — even though the stock price is exactly the same. Pretty cool, huh? 4. How Much Money Do You Need For Options Trading? As you can see from the previous example, you need MUCH less money when trading options vs trading stocks. When trading options, you can get started with as little as $2,000. Check with your broker about the minimum requirements to open an options trading account. So if you have a smaller account, trading options might be much better for you than stock trading. 5. Can You Lose Money Trading Options? Let’s talk about the risks of options trading, specifically the question “Can you lose money trading options?” The answer: YES, of course! In the example above, you could lose the premium you paid for the option, i.e. $375, if the stock price does not move above the strike price of $130. If AAPL remains below $130 until the expiration date of June 18th, your option expires worthless. And here’s why: With a call option, you have the right to BUY 100 shares of AAPL for $130. If AAPL is trading below $130, let’s say at $128, you don’t want to exercise your right to buy AAPL at $130. Because then you would pay MORE for the stock than you would if you bought it right away. Making sense? So if AAPL stays below $130 until expiration, your option expires worthless and you lose the premium you paid for the right to buy the stock. Can You Lose More Than You Invest In Options? When you are BUYING options, you can not lose more than the premium that you pay when buying options. So that’s good. However, when you are SELLING options, that’s a different story, and we will cover that later. So in summary: When BUYING options, the maximum amount that you could lose is the premium you pay when buying the option. 6. What Are The Risks Of Options Trading? YES, there are risks when trading options: a) Selling Options Can Be Dangerous. As you have seen, when BUYING options your risk is limited to the premium you pay when buying the option. However, as a seller, there’s a lot more risk. In some cases, you can have UNLIMITED risk. We will cover this in detail in a later article. b) Buying Out Of The Money Options. Risky before the probabilities are low. c) Know What You’re Doing When trading options, there are a few more things to consider: Call options vs put options Strike Prices Expiration Dates … and then there are also these pesky “Greeks” like delta, gamma, theta, rho, etc. And when you have more things to consider, there are more possibilities to make mistakes. So make sure that you understand all these factors before you start trading options. We will talk about “The Greeks” later. Are Options Riskier Than Stocks? YES. Because it’s easier to lose ALL of your investment. Let’s continue our example from above: Trading Stocks You bought AAPL at $128.70 per share. If AAPL drops to $125, then you would lose $3.70 per share, or $370 for 100 shares. Based on your initial investment, that’s only 2.9% Trading Options You bought the 130 Call Option for $3.75. If AAPL doesn’t move above 130, you lose ALL of your investment, i.e. 100%. Yes, the investment is much lower, but instead of losing 2.9% as you would when trading stocks, you would lose 100%. Selling Options And when selling options, you can lose A LOT of money. Selling options can be very profitable. In fact, I made more than $75,000 in less than 5 months selling options… … BUT it’s also very risky. Compare options vs stocks like riding a bicycle and riding a motorcycle: Riding a motorcycle gets you to your destination quicker. And it can be more fun. But it’s also much riskier than riding a bicycle. 7. Can You Really Make Money Trading Options? Absolutely! There are many advantages to trading options, and it is possible to make money with options. Is there a safe way to trade options? You need to know what you are doing, and you need to have a solid trading strategy. Find a strategy that you understand and then practice it on a simulator. And when you are ready, start making money with it. Can Option Trading make you rich? When trading options, you will often see returns of 167%, 200% or even 300%. Therefore, it’s easy to believe that options trading can make you rich. But keep in mind: With these high returns, comes high risk. Yes, you can make 200% or 300% when trading options. And you can lose ALL your investment, as you have seen above. Don’t think of options trading as a “get-rich-quick-scheme”. But when used correctly, options trading is perfect to grow a small account into a bigger one. Summary: Should I Trade Options YES! Should I trade stocks or options? Why not do both? Best of both worlds! Is options trading worth it? YES! It can be very rewarding! As we just covered with trading options, there are many, many advantages. If you are not trading options yet, I highly recommend that you start looking into them.

Education

by rockwelltrading

📚Easiest and most accurate way to trade EUR/USD Hi traders! I have long wanted to share the simplest trading strategy, which is suitable for both experienced and beginners. The easiest way to trade EURUSD is to trade channels + support and resistance lines. 1. How to find a channel. As you can see from the chart, over the past 6 years (immediately after Brexit), the price has always been in a channel. You need to build channels on the D1 timeframe. I have provided you with the existing channels on the chart, now the price is in a growing channel. To build a new channel, 4 points are enough (2 above and 2 below). Although for more advanced traders, 3 points will be enough. Examples. 2. Once you have built the channel, you can trade. 3. With the entrances sorted out. Everything is simple here. It will be more difficult to choose SL and Tp To make it simple and easy to remember (especially for beginners) always set SL 3 times less than TP (Risk to reward ratio 1 to 3) It remains to decide on the TP. Strong support and resistance lines will help us a lot. It is better to close the trade when the price reaches strong lines. In fact, there are few important lines, so they are not difficult to find (otherwise, they are most likely not important lines). Example: 4. Important notes. 1) It is better to trade with the trend (open buy trades in an upward channel and sell trades in a falling channel) 2) Better not to enter a trade during very important events (like Covid-19) 3) False breakouts occur at times, but the price quickly returns to the channel, so after the price quickly returns, you can open a trade. 4) If the price is both on the channel line and + on the strong line, then you can open a deal with 2 times larger volume 5) If the price touches the channel line twice in a short period of time, then it's okay if you open two trades + you can double the stop loss in this case. 5. Output In total for the last 2.5. of the year there were 15 entries, 14 of them in plus 1 in minus (Accuracy 93% !!) Average risk to reward ratio of 1 to 3 (although entries are so accurate that experienced traders can make a risk to reward ratio of 1 to 5) If you take the risk for trade 1% of the deposit (although you can take 2% with such accuracy) then: Profit 14 * 3 = 42%, and loss 1% The total profit is 41% for 2.5 years, that is, 16.4% + RISK-FREE profit per year, only for EURUSD. experienced traders know these are great numbers. Find 2-3 more such strategies and you will be an excellent trader Like and comment if you like the idea This will be my motivation to create posts like this.

Education

by UnknownUnicorn15614419

📚Easiest and most accurate way to trade EURUSD Hi traders! I have long wanted to share the simplest trading strategy, which is suitable for both experienced and beginners. The easiest way to trade EURUSD is to trade channels + support and resistance lines. 1. How to find a channel. As you can see from the chart, over the past 6 years (immediately after Brexit), the price has always been in a channel. You need to build channels on the D1 timeframe. I have provided you with the existing channels on the chart, now the price is in a growing channel. To build a new channel, 4 points are enough (2 above and 2 below). Although for more advanced traders, 3 points will be enough. Examples. 2. Once you have built the channel, you can trade. 3. With the entrances sorted out. Everything is simple here. It will be more difficult to choose SL and Tp To make it simple and easy to remember (especially for beginners) always set SL 3 times less than TP (Risk to reward ratio 1 to 3) It remains to decide on the TP. Strong support and resistance lines will help us a lot. It is better to close the trade when the price reaches strong lines. In fact, there are few important lines, so they are not difficult to find (otherwise, they are most likely not important lines). Example: 4. Important notes. 1) It is better to trade with the trend (open buy trades in an upward channel and sell trades in a falling channel) 2) Better not to enter a trade during very important events (like Covid-19) 3) False breakouts occur at times, but the price quickly returns to the channel, so after the price quickly returns, you can open a trade. 4) If the price is both on the channel line and + on the strong line, then you can open a deal with 2 times larger volume 5) If the price touches the channel line twice in a short period of time, then it's okay if you open two trades + you can double the stop loss in this case. 5. Output In total for the last 2.5. of the year there were 15 entries, 14 of them in plus 1 in minus (Accuracy 93% !!) Average risk to reward ratio of 1 to 3 (although entries are so accurate that experienced traders can make a risk to reward ratio of 1 to 5) If you take the risk for trade 1% of the deposit (although you can take 2% with such accuracy) then: Profit 14 * 3 = 42%, and loss 1% The total profit is 41% for 2.5 years, that is, 16.4% + RISK-FREE profit per year, only for EURUSD. experienced traders know these are great numbers. Find 2-3 more such strategies and you will be an excellent trader Like and comment if you like the idea This will be my motivation to create posts like this.

Education

by UnknownUnicorn15614419

When To Sit On Your Hands When Trading Now, as you know, I like to use the PowerX Optimizer to find the best trades according to the PowerX strategy, along with The Wheel Strategy. So here’s my morning routine. Usually, I’m in front of the computer at 8 a.m. Central Time. That is 30 minutes before the US markets open. I run the scanner on PowerX Optimizer, and it finds possible trades based on my criteria. My Criteria For Finding Stocks My criteria, for starters, is I like to look for long and short signals because I like to play the markets both ways. I want to see at least a 60% return on my investment. I also want to see stocks that have a closing price between $5 and $250, because I don’t like to trade stocks that are below $5. I want to see a profit factor that is higher than 3. This means that for every dollar that I would have lost trading the strategy, I would have made $3. I also want a risk-reward ratio of at least 2%. Usually, there are anywhere between 4 & 8 stocks that come up on my scanner every day. I use three criteria to find A-plus trades. So here’s what I’m looking for. Number one, I’m looking for gappiness. I look back to see if the stock had a lot of gaps over the past year. I look back over the past 13 months. Number two, I’m looking for is trendability. What does trendability mean? It means that I want to see nice trends to the upside and the downside. And the last thing, number three, is I’m looking at the P&L chart. What does the P&L chart mean? Now, this is one of the strengths of the PowerX Optimizer software, and this is why I use it every single day. The P&L chart basically shows you what would have happened if I had traded this stock according to the rules of the PowerX strategy over the past year. So I can take a look at the trading report where I see for the past few trades, what I would have made in profits & losses. When To Sit On Your Hands Anyhow, this morning (at the time of this writing) I just saw EVRI on my scanner and it passed MOST of my criteria. First of all, it did pass all my scanner criteria, otherwise, it wouldn’t have come up here. Also, it did pass 2 out of my 3 criteria in terms of gappiness and trendability. But when it came to the P&L chart, it didn’t meet my criteria. So this is where this morning I did the most difficult thing for a trader. I was sitting on my hands. You see, at the beginning of my trading career, I had this little voice in my head and this little voice in my head said, “If you don’t trade, you don’t make any money.” Well after I forced some trades, I realized, well, if you don’t trade, you also don’t lose any money. This is why it’s so important. In the beginning when I got a new tool, or when I had a new trading strategy, I wanted to trade it. All I wanted to do was trade. However, when there’s nothing to trade, DON’T TRADE. This is why I use the PowerX Optimizer. It a fantastic job of keeping you out of trouble. So now, as you know, I am trading two strategies. In addition to trading the PowerX strategy, I’m also trading the Wheel. So also for the Wheel, I started looking for trades. Let me show you what I was looking for this morning. One of the trades that I thought, ahh you know what, this might actually be a decent trade was Marriott, (MAR), but when I looked, however, there wasn’t enough premium in there to sell according to the Wheel. I looked at another stock that came up on my radar this morning, which was (PENN). There was some great premium in there but PENN sounded rather risky. You see, for me, it is very, very important that I have a great track record. Now at the beginning of my trading career, I would have forced these trades. I would have said, “Oh my gosh, I cannot be done working after one hour,” because this is what happens sometimes in the morning. I sit down in front of the computer at 8 o’clock, which is half an hour before the open, and I run through the PowerX Optimizer, and don’t find anything. Now, one of the things that of course, I do every single day, is that I check my open positions, and in the PowerX Optimizer, I have my watch list. So first I look for new trades, and secondly, manage my existing trades. I don’t, however, need to overmanage my account when there are days where there is nothing to trade. What I used to do way back when I was still new to trading, and nothing would come up, I would adjust my criteria. I said, yeah, you know what? Instead of getting a 60% return on my investment, why don’t I lower it to 50%, or why don’t I lower the winning percentage to 35%. Maybe lower the volume to 200,000. I had to learn the hard way early in my career not to do this. Summary So anyhow, in summary, there will be days when you’re all excited, but you see, in order to make money with trading, two conditions have to be met. Number one, you have to be ready, and number two, the markets have to be ready. You may be ready but if the markets are not ready, you got to sit on your hands. The beautiful thing as traders, it’s not that today is the trading opportunity of a century. No, tomorrow there will be more trades, on Wednesday will be more trades, on Thursday. Every single day I’m running the scanner according to PowerX Optimizer and I will find more opportunities to trade. So today, one of the hardest lessons, and this is why I wanted to share it with you, sit on your hands. Anyhow, if you enjoyed this video, do me a favor and click on like so that more people will see it.

Education

by rockwelltrading

How Earnings Season Affects Options As most of you are aware, it is earnings season. So today we’re going to talk about how earnings season can impact options trading, because, as you know, I trade options. Now, just a brief intro. Earnings season happens quarterly, meaning four times a year, and this is when corporations reveal their financial results for the previous quarter. Now, the results of a company’s earnings report can have a major impact on the stock price, and options will often price in the expectations for a big post-earnings move before the event. This is why it is likely that options premium are more expensive during this time. Implied Volatility One thing to know about this and how it can impact your trading is implied volatility. See, there several things that make up an options price, including the market’s expectation for future volatility, and that is called implied volatility. So why is this important? Well, as the buyer of an option, higher implied volatility means that you are paying more for your contract. So if you buy an option before earnings and hold through earnings, you put yourself at risk for a so-called volatility crash. Now, part of the reason implied volatility goes up so much ahead of earnings is because traders don’t know which way the stock is going to go or by how much. I mean, remember Netflix at the beginning of March? Who would have known that Netflix would soar 17%? But you see, once a company reports earnings, there is no more uncertainty, and this is when implied volatility drops, and in some cases, so does the options price. So if you bought an expensive option, there’s a chance that you have to sell it to close at a lower price even if a stock moves in the direction you want it to. And let me show you a very, very specific example of a volatility crash and why it is so important that you understand the concept of volatility and how it can impact your options trading. So I want to show you right here we see Seagate. Seagate reported earnings last week. And so here is the pre-earnings options data. The day before Seagate, STX, was trading at $61.45, and an At-The-Money call with a 61.50 strike price was going for the last traded price of $1.74, and the implied volatility was 128%. On the other hand, the put was going for $1.82 and the implied volatility was also 128%. Now, this was the day before earnings. Now let’s talk of what happened the day after earnings. So again, here Seagate was trading at $61.45 before earnings, but then the next day, Seagate dropped to $59.33. So it fell dramatically and therefore, and the price of the 61.50 call is only a penny. So it’s not surprising that the call is not worth anything, but here’s the key. Even though the stock fell quite substantially, the put only went from $1.82 to $2.51 so it went up because puts go up as the stock goes down. So this means that the put only went up to $0.70, $0.69 to be exact. You see this is how the volatility crash affects the option price, because even though the put is worth more now, and is now in the money, but it also lost a lot of value due to the decline in implied volatility. See, the previous day, it was 128%, this implied volatility, and the day after only 96%. So you have to factor this in when trading options into earnings. How Is Implied Volatility Measured? So let’s talk about this implied volatility thing and how is this measured, right? You know me, I’m all about practical stuff, so I don’t want to bore you with the math behind it and I don’t have to. The good news is that there are plenty of places online that calculate the implied volatility for you, and I want to show you exactly how you can see if the implied volatility, is high, low, or average. Here is the easiest way to do it. You compare the implied volatility to the stock’s historical volatility for exactly the same time frame. The implied volatility measures the market expectation for future price action. Now, the historical volatility measures the volatility for a stock that already occurred over a specific time frame. All you have to do to see if the implied volatility is high, low, or average compare it to the historical volatility. We can use the implied volatility of AAPL Apple’s Q1 earnings season. Apple was trading at 142. For an at-the-money call, expiring in four days, the implied volatility was 71%, and for the put was 70%. The historical volatility of Apple. And this is something that you’re charting software can show you, it makes sense to look at it in 10, 20, 30, 40 days increments. So if we were to look at the past 10 days, the historical volatility was 37%. But the call was trading at 71%. So what does it tell us? It tells us that the premium on this call, and also on the put, was running more expensive than usual. So now we can see, how this is affected by earnings. Now, let’s take a look at the implied volatility of an at-the-money Apple call from the same time that expired later out at, let’s say March 19th. So for calls expiring March 19th, you see right now the implied volatility is much, much, much lower at 43% for the call, and 43% as well for the put. The historical volatility over the past 60 days was 40.69%. Now compare this to the 43% and we see that it is pretty much in line here. So this means that the premium that was on these calls and puts on options that had 53 days until expiration was pretty much average. Why You Shouldn’t Sell Options Into Earnings Options traders are always talking about implied volatility and historical volatility, and now you know what it is. Now I want to tell you why I don’t sell options into earnings. I mean, even though the stock moves in the direction that you want to, your option premium is getting sucked out of there because of the volatility crash. You see, and this where, as an option seller, you might say, “don’t I want the premium to be as high as possible?” and yes, of course, you do. But let me make you very clear why I don’t sell options into earnings. If you have been following me for a while, you know that I love trading the Wheel, and as part of this strategy, we are selling options. Well you see, earnings plays are hit-and-miss. Sure, everybody can get lucky and most people who start trading expect their account to explode from one or two big trades. This is where we have some stocks that are jumping just dramatically. Looking at Intel, INTC over the last three earnings. Huge gap down right when we had earnings, then there was another earnings play, and Intel really crashed down hard again. Then also here during the last earnings season, initially, Intel went up but then started crashing down. You see, some people like these earnings plays because they believe the hype that they can make a lot of money with very little work involved, but see, trading just doesn’t work this way because, in reality, the key to becoming successful in trading is consistency and growing your account systematically. That’s what I mean when I talk about generating SRC profits, right? SRC is an acronym that stands for Systematic because I like to trade what I see and not what I think. This is why I use indicators and have a trading strategy that tells me when to trade, what to trade, when to enter and when to exit. The R stands for repeatable and by trading my plan, I’m able to find repeatable profit-making opportunities. The C in SRC profit stands for consistency. You see, I’d rather make slightly less money more often than biting off all my nails waiting for a big winner. As you know, part of my systematic approach to trading is to use The Wheel Strategy and the PowerX strategy. Now, especially with The Wheel strategy that, where I’m trading right now with you here, the idea is to get paid while you wait to buy the stock, and because I’m collecting premiums on the puts that I sell, I’m looking for stocks with higher volatility, right? This means making more money, and as a rule of thumb, I look for stocks with an IV, implied volatility, of at least 40%. The Wheel strategy can relatively safely produce profits, but I don’t recommend you to trade into earnings, at least that’s not what I do. So I will not target options with an expiration date that includes the company earnings report. I am trading options before we are running into earnings. So this is why I think it is very important that you know when trading options, whether it is buying or selling, that you don’t trade into earnings. At least that’s what I do because earnings are a wildcard and there’s just too much uncertainty. Remember, I’m not looking for fireworks here, I’m looking to systematically grow my account through consistent and repeatable strategies. Where To Check For Earnings Now, I want to give you two more resources, if you want to see for yourself who is reporting and when. These are two websites that are pretty cool that I personally use. So the first one here is “stock earnings.” If you go to stockearnings.com or they even have stocksearning.com, they will show you see the notable earnings that are coming up this week. Now, another one that many people like to use is earningswhispers.com. So that’s another great source for finding out when companies will report earnings because this way you can make sure that you’re not trading right into earnings. It’s always good to know when they report earnings if you have any open positions, whether you’re buying stocks or selling stocks so that you’re not caught off guard. So I hope that this helped you to see how earnings impact option prices and why I never sell options into earnings.

Education

by rockwelltrading

Importance of Optimizing RSI Calibration with NINJASIGNALS V4 This is a great example of why it is helpful to scan through multiple RSI Calibration values when calibrating Ninja Signals V4 to fit a given chart. Different currency pairs and candle sizes often require different RSI Calibration values to maximize trading success. Often times, different RSI Calibration values may result in a significantly higher net profit, win-ratio, or both. In this particular example, we found that using a small RSI Calibration value of 2 resulted in both a significantly higher net profit and win ratio. We typically use RSI Calibration values of 2-12 when fitting Ninja Signals V4 to a chart. Smaller RSI Calibration values result in a larger number and frequency of trades, whereas larger RSI Calibration values result in a smaller number and frequency of trades. We hope you find this helpful and informative. Feel free to send us a message on TradingView if you have any questions. Happy Trading! Ninja Signals V4 (Script) Ninja Signals V4 (Strategy)

Education

by Bitcoin_Ninjas

Trading For A Living: How Much Money Do You Need?In this article, we’ll talk about how much money you need to trade for a living. I’ll share with you my three-step approach and give you an example from my trading account. “How much money do you need to trade for a living?” is one of the most frequently asked questions I get. “Can I start with $5,000 dollars, do I need $25,000 dollars, or maybe even more?” You see, this is a super important question. Now, here’s the deal. There’s no standard answer because making a living is different for everybody. Some traders can live on $5,000 a month. For others, trading for a living means making at least $15,000 a month. Let’s talk about step number one. How Much Do You Want To Make Each Month? Step number one is figuring out how much money you want to make per month. This is the first thing determining what your income goal should be, and it really depends on a few different factors. For example, what are your monthly expenses? How many dependents rely on your income? That’s different for every trader. Additionally, what income do you need to buy cool stuff like cars, boats, whatever it might be? These are just a few examples of what should be taken into account when you figure out how much income you need to generate every month. Now, as boring as this sounds, it definitely helps to make a budget. You don’t have to account for everything, but you should list your major expenses. So in your budget, there should be, for example, expenses for housing. In housing, you include your mortgage, your insurance, your taxes, and expenses for your house maintenance. The next thing to account for is transportation. Unless you’re using a helicopter, for most people this is a car payment or a lease. This also includes car insurance. The next major category is food. Food includes groceries and also restaurants. Now, the next major category is utilities such as gas, water, power, Internet, TV, phone insurance. Some of you also buy your own health and life insurance. You also need to consider any medical expenses like co-pays. The next one is a fun one, travel and entertainment. Where do you want to travel? How often do you want to travel? What else do you do for entertainment? You have to factor these activities in too. This next one is not so fun. This is of course the dreaded taxes we have to pay. Now you need to add all of this up and you will get to a number, which is the amount you need to make each much to cover your expenses. For me personally, this number is $15,000. So you know what my number is, and I’ll show you how I trade for a living so that I can make this $15,000. What Is The ROI of Your Trading Strategy? Now that we have figured out what your number is, it’s on to step number two: factoring in the return on investment, or ROI, of your trading strategy. I like to trade the PowerX Strategy, and I also like to trade The Wheel Strategy. These are my two favorite strategies, and for both strategies, I want to see at least 30 percent ROI based on my buying power. Let me explain what this means. As an example, let’s figure out 30 percent of my buying power. I’m trading a margin account and this means that I can borrow up to 100 percent of my cash from my broker. Let’s say I were to put $20,000 in cash in this account. $20,000 in cash into a margin account would give me $40,000 in buying power, so back to my ROI, the return on investment. I want to see at least 30 percent based on my buying power. So in this example here, if my buying power is $40,000 and we want to find out what 30% would be, we take 40,000 and multiply it by 0.30. This comes to 12,000, so this means that I want to make at least $12,000 per year with $40,000 in buying power in a margin account. To find the ROI based on the cash I put in, which is $20,000, we take the $12,000 (profit we would make with margin) and divide by $20,000 (cash I put in), this comes to 0.60, or 60 percent ROI based on cash. I know this sounds like a lot of numbers, but here’s the good news. This is the most complicated step. Now, I know that for some of you 30% sounds low, doesn’t it? I know that most traders would like to see 50% or more ROI, maybe even 100–200%. But you see for me, it’s more important to be able to generate SRC profits which stand for systematic, repeatable, and consistent. I’ll take 30% in SRC profits any day over 100% in irrational profits trading stocks like GameStop. For me, 30% is good enough to support my lifestyle, but hey, every trader is different, just make sure that you use YOUR number. By the way, if you don’t know your ROI yet, trade your strategy on a simulator first. After 40 trades on a simulator, you will get close to your strategy’s ROI. Determining Your Account Size Let’s move on to step number three because now things get exciting. So step number three is where you use a formula to determine your account size, and I want to give you the formula right now so that you can plug it in. Everything that I do is very, very systematic. Now you know how much income you must make every month, this was step number one. For step number two, you learned how to figure out how much ROI you can expect from your trading strategy. Here is a very simple formula that you can use to calculate how much you should have in your trading account so you can generate the amount of money every month that you determine. In order to determine the buying power you need in your trading account, all you need to do is take the desired annual income that you determined in step number one and divide it by the expected ROI that you determined in step number two. Let’s say that you want to make $10,000 per month. If you want to make $10,000 per month, that would be $120,000 per year. For some, this might be very realistic. So this is step one where you used a budget to figured this out. For step number two, say you’re using either the PowerX Strategy where you can easily make 30% a year, or you’re using The Wheel Strategy which can also help you to make 30% per year. You have determined that you can make 30% per year based on your buying power. Here’s how you would figure out how much buying power you need in your trading account. Your buying power should equal $120,000 desired annual income divided by 0.3 (30% ROI). This means that you need $400,000 in buying power in your account. Now, $400,000 in buying power would mean if you’re using a margin account, you only need $200,000 in cash. This might be more than you expected, and that’s okay. You can actually trade for growth in the beginning. I just want to show you what your goal needs to be if you have a smaller account right now so you know at what level you can actually start trading for income, and at what level you can quit your job. Have Realistic Expectations If right now you’re looking at this example here and you currently have $10,000 or $20,000 in your account, that is really good, but don’t quit your job just yet. I like to keep it real, right? With me, it’s real money, real trades, and also realistic expectations. Well, that is possible if you have a decent-sized account, but let me cover another example so you can see how simple the formula is, and how it works in action. The Numbers In Action So let’s say in step number one you determine, like I did, that you want to earn $15,000 per month, $180,000 per year. Now, again, we are assuming that we’re using The Wheel Strategy and the PowerX Strategy, which gives me 30% ROI per year. Here’s how I determine how much buying power I need to have in my account in order to make $15,000 a month consistently. Again, we take our desired annual income, which is $180,000, divided by 0.3. So that would be $600,000 in buying power. Now, $600,000 in buying power means that you need to have, if you’re using a margin account, $300,000. This is how this worked out for me. At the beginning of the year, on January 11th, 2021, I put $250,000 in cash into a margin account, and this gave me $500,000 in buying power. So $500,000 in buying power, and at the time of this writing on April 26, 2021, my profit thus far this year is $72,908 in REALIZED profits. This means that on average, over the past four months, I made $18,277 per month. Now, my goal was to make, as I told you earlier, $15,000 per month, which means my goal would have been to make $60,000 in a 4-month span. Since I’ve earned $72,908 over the past four months, this means I’m overachieving this goal. This is the important thing because the question is “how much money do I need to trade for a living?” Summary As you can see it’s quite easy to calculate the money that you need in your trading account to trade for a living. However, it is completely unrealistic to open an account with $5,000 and expect to trade for a living, unless making a living means making $125 per month. And I know that there are many people who tell you that you can start with $5,000, and then they do some magic math and tell you they can show you how to turn that $5,000 into a million dollars within a year. This just isn’t realistic. It’s probably not what you want to hear, but I know that this is what you need to hear. The good news is, if your account is not large enough yet to trade for a living, that’s absolutely fine. You can trade for growth and use money management to grow your account. The main difference when you’re trading for income vs trading for a living as I do is, every month I wire profits out of my trading account into my personal checking account. While you’re trading for growth, you keep all of the profits that you make and keep them in your trading account. If you’re still at a smaller account, that is absolutely fine, but now you know what level you need to get. If you’re here right now and you need to get there, then during this time you might need other sources of income. I wanted to do this article to show you a really simple formula so that you can determine how much money you need in your account to trade for a living. Remember, it is possible to make a living trading. It is possible, it is doable. Just have realistic expectations and a plan.

Education

by rockwelltrading

Zig Zag Easy Forex Strategy This is one of my easiest forex strategies that has proven to me to produce consistent profits . if you have any questions contact me

Education

06:41

by Shaquel_Samaai_Fx

Using Obscure Candle Sizes to Maximize Profit w/ NINJASIGNALS V4 This is a great example of how effective a small change in candle size can be when using our Ninja Signals V4 trading script. By simply switching from 1h candles to 67m candles, we were able to achieve significantly better results. In theory, this will also help to minimize price slippage during live trading by avoiding popular candle sizes (e.g., 1h candles) when many traders attempt to open and close positions at the same bar close time. A small adjustment in candle size can make a big difference when using various indicators. Sometimes standard candle sizes also result in less obvious trends, making it harder to find the best buy and sell points. If your target candle size is 1h candles, we recommend comparing all candle sizes from 40m through 100m in 1m increments (40m, 41m, 42m... ...98m, 99m, 100m, etc.). The small amount of time required often pays off with significantly better, more profitable results. Ninja Signals V4 (Script) Ninja Signals V4 (Strategy)

Education

by Bitcoin_Ninjas

Emotions In Trading: Biggest Account Killer Trading is fun and every trader is happy when their trades move in the right direction, but when a trade goes against you, you will experience a lot of emotions: Fear, anxiety, regret, doubt, maybe anger… … and these emotions in trading can lead to some bad decisions that could kill your account. In this article, I’ll show you how to control your emotions in trading so that you become a more relaxed trader. 1. Recognize Your Emotions When trading, you WILL experience emotions. The main emotions are: Excitement Greed Fear Anger Frustration Let’s talk about these emotions and how to deal with them. Emotion #1: Excitement When trades are going in your favor, it’s natural for you to be excited. We all love to see “green” in the account, but here’s the problem with that: when trades are going in your favor, you may be too excited and take on more risk. I have seen this over and over again, especially when trading “The Wheel” options strategy. During the first few trades, traders are usually very careful. They do a great job in picking the right stocks, then they take a few good trades and their account is up nicely! All of a sudden, they get overconfident. It seems that the trading system can’t lose, and so they increase risk because “things always turn out for the best,” but that’s when trouble starts. You’re no longer looking for “the best” trades. You feel invincible and want to make as much money in a short amount of time as possible. You start trading with more & more risk, and start choosing stocks that you shouldn’t choose. Here are a few examples: TLRY, SPCE, WKHS, LABU The premium is attractive, and you thought: “I’ll be fine, and if not, I can fly a rescue mission like Markus usually does,” but then you get stuck in a trade, like some of you are. So please be careful when you experience excitement because it quickly leads to overconfidence, and the markets like to show overconfident traders who’s boss! Emotion #2: Greed Next on the list of emotions in trading is greed. Greed is okay as long as you don’t let it take over your trading. My P&L so far is $69,205 at the time of this writing: My goal is to make $15,000 per month, and thus far, I have made almost $70,000 in less than 4 months! I could get greedy now and say, “Why not $20,000 per month? Or $30,000?” But I am going to keep trading with discipline and make sure that my greed doesn’t get the best of me. Be humble! Be grateful for what the market gives you because if you are greedy and try to squeeze the last penny out of the markets, the markets WILL put you in your place! Emotion #3: Fear The next emotion on the list is fear. Fear is a natural human emotion that we all have. In trading, it’s easy to let fear take over because you can see your profits diminishing in front of your eyes! Here’s the problem with fear: it’s a very strong and powerful emotion that has the power to paralyze you, and cause you to have a bad day — a VERY bad day: You’re sitting in front of your computer all day staring at the “red” numbers — the unrealized losses. Your mind goes crazy because you’re already thinking about how bad your trading account will be when you realize all these losses. But what a difference a day can make. Have you ever realized how one day it looks bad, and the next day everything is green again? Here is what you should do when FEAR takes over: – Step away from the computer. Shut it down! Go outside. Do something else. – Take some deep breaths and relax. – Do not panic, this will cause you more harm than anything else! The market is always changing, it’s just out of our control; so instead of panicking, think about what we can control. Emotion #4: Anger Next on the list of emotions in trading is anger. It’s easy to get angry at the markets because it’s so unpredictable! You can never tell what is going on and when it will change. And why are there always losers? Dang, I should have bought 30 minutes ago… but now the price has gone up again?! Happened to me yesterday: Every single trade that I entered was timed wrong. I could have gotten a much better fill 30 min later! But: anger does not get us anywhere. Anger leads to revenge trading, which can lead to catastrophic losses. Keep in mind: Markets don’t know who you are. Markets don’t care who you are. Markets don’t know if you are in a winning or losing trade. Markets don’t care if you try to push them around. If you try to fight the markets, you’ll lose. It’s important not to let anger dictate your trades! Emotion #5: Frustration The last emotion on our list is frustration. It’s easy to get frustrated with trading for the same reasons that I just mentioned: You can never tell what is going on and when it will change. And why are there always losers? Dang, I should have bought 30 minutes ago… but now the price has gone up again?! Some people react to these events with anger, others with frustration. Frustration can lead to impulsive trading, and that’s not a good thing. The best way to deal with frustration is to take some time out from the markets for a few hours or even days until your head clears up. 2. Understand The Effect of Emotions While Trading In a moment, I’ll share a technique with you on how to control these emotions but let’s first talk about the effect of emotions on your trading. It’s ok to have feelings. It’s ok to feel these emotions — these are HUMAN emotions. The problems start when you ACT on these emotions while trading. As you have seen, each of these emotions is causing a reaction, and none of them is good. Emotions cause irrational behavior… … which leads to impulsive decisions, … which leads to and bad trades, … that often leads to losses or drawdowns. Emotions in trading can be the number one account killer, so you MUST be able to control them. 3. Control Your Emotions By using THIS technique I have been trading for 20 years, and I still feel these emotions. They say you shouldn’t have any emotions while trading, and based on my experience, that’s not possible! The important thing is to make sure that you don’t ACT on your emotions. So how can you control your emotions? Stephen Covey said it best in his book “The 7 Habits of Highly Effective People”: Focus on what you CAN control, and don’t worry about what you can’t control. And if you think about it, there are only 2 things you CAN control: Your Thoughts Your Actions You can’t control what the markets are doing, you can’t control whether Hindenburg Research is releasing a report on a company you’re in, you can’t control when a big hedge fund gets in trouble and has to dump a bunch of positions, but you can choose how you react. Let me give you a personal example: As you know, I am in RIDE . And the position is MASSIVELY going against me. I could be angry at short-sellers, especially Hindenburg Research. I could be frustrated with Lordstowns PR efforts, which suck. I could look at my unrealized loss every day and fear “What will happen it Lordstown doesn’t recover?” I could have a lot of negative emotions around it, and NOTHING would change — other than me getting bitter, and maybe even depressed. So I keep following my plan, which is selling more premium. This week, I will make $1,050 on RIDE , no matter what the price is doing. If it goes up, good. If it goes down… oh well, I can’t change that. I just know THIS: I won’t let emotions dictate my day, and I won’t let emotions dictate my trading. I believe the Serenity Prayer says it best: “God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.“

Education

by rockwelltrading

3 Tips That Turned My Trading Around How did I get here? To moving from Germany in 2002 to the United States, and came here with $30,000 in my pocket. I put $20,000 in my trading account, and I put away $10,000 for a living. It wasn’t easy in the beginning. It was quite challenging. Now things are different. I mean, thus far in the first four weeks of 2021, I already made more money than I was able to put into my trading account in the very beginning. I know if you are there in the beginning right now, you may have $10,000, $20,000, or maybe even only $5,000 or less to get started. How do YOU get started? This is what I want to focus on in this article. You see, I’ve been trading for a long time and there are a lot of things that I’ve learned the hard way over the years, and I want to go over three very specific things that helped me to become a much better trader. Don’t Focus On The Outcome Of Just ONE Trade The first thing here is don’t focus on the outcome of one trade. You see, at the beginning of my trading career, I was really stuck on looking at what happens with just one trade, or what happened on just one particular day, but it is so important that you keep the longer range in perspective here. Trading is a marathon, not a sprint. One of the few certainties in trading is that there will be losing trades no matter how good you are, but instead of beating yourself up about the P&L (profit and loss) of one specific trade, keep your eyes on the bigger picture. For example, I woke up one day, and I saw my account was down $12,000 and it actually got worse over the day getting as low as $17,000. Now I could have chosen to panic and focus on the red, but you see, this is why I say trading is a marathon and not a sprint. You need to focus on the broader performance over the course of a few days, a few weeks, or even a few months. Usually when you look at your account and you look at the P&L, what are your eyes usually drawn to? The red, right? You will focus on the one trade that is not working out in your favor. I can relate to this because I was just like this in the beginning. Think about it this way, your hand has five fingers. If you take a hammer and you smash on one of the fingers, you focus on the finger that hurts, and not on the other four that are fine. It’s human nature to focus on the bad stuff. But you see, when you do this, you’re losing sight of all the other good trades and also how you’re doing over the course of the year. This is super, super important, and you see, one of the keys to my success in trading is consistency and growing my account systematically. I do this through SRC profits. SRC is an acronym. The S stands for systematic. I like to trade what I see and not what I think. This is why use indicators and have a trading strategy that tells me what to trade when to enter, and when to exit. The R in SRC profit stands for repeatable, by trading my plan. By trading and following my plan, I’m able to find repeatable, profit-making opportunities. The C in SRC profits stands for consistency. You see, I’d rather make slightly less money more often than bite off all my nails waiting for the big winner. So focus on SRC profits. Systematic, repeatable, and consistent. So remember, it is more important to focus on this than on one trade, right? We will have losing trades and it’s unavoidable. Don’t Trade On Emotions The second thing to remember is, don’t trade on emotions. When you’re trading with your hard-earned cash, there’s certain to be emotions involved. When trading there are two main emotions to deal with: fear and greed. So as traders, we fear that we’ll have a loss, and lose money. There are actually two ways to control this fear. Number one, you want to keep your losses small. While losses are part of the business, if you keep them small you won’t be afraid of them. So I like to use, as a rule of thumb here, the 2% rule. The 2% rule means you never risk more than 2% of your account on any given trade. Think about it, if you have a $10,000 account, this translates into risking $200 per trade. Let me ask you this. If you have $10,000 in your account and you’re risking $200, are you afraid of losses? Probably not, right? If you lose $200, it doesn’t wipe out your account. You can live to fight another day. Now, number two is don’t trade with money you can’t afford to lose. I know you might have heard this before, but I just want to tell you a story from when I started. In the beginning, I scraped together $8,000 to start trading. This is before I moved to the U.S. and got serious about trading, and trust me, I could not afford to lose this. This was 23 years ago, and at that time I was 28. And when I was 28, 23 years ago, $8,000 was a lot of money for me. It was everything that I had in my savings account, so this is why I was super nervous when I lost money. It made me cramp up and it paralyzed me. I was checking my account every few minutes, anxiously see what’s going on. Have you ever done this? You check your account every 30 minutes? This is why it’s super important that you trade only with money that you can afford to lose. I know easier said than done, but keep in mind, if you don’t do this it will actually hurt your trading. On the other hand, there’s the fear of missing out or FOMO. That is another type of fear, which is really, really critical. This also happened to me at the very beginning of my trading career. So you see, how many times have you seen a stock that has skyrocketed, and then you beat yourself up for not getting in? If you’ve ever looked at a stock, see it take off without you, and thought, “Oh my gosh, I should get in” then tried to chase the stock higher, you’ve likely realized afterward that this was a problem. A classic example of this that you might remember is the craziness that happened with GME, GameStop, not too long ago. People started getting in at $20, then $40, then some at $160. Another typical example is Bitcoin. If you look back at Bitcoin here, what do you think? Where did most people get in in 2018? Did they get in when it was trading at $600 or $700, or did most people get in when Bitcoin was trading higher around $14,000, $15,000 maybe at $10,000? Most recently Bitcoin went up from $10,000 to $17,000. Where did most people get in on this move? Probably closer when it was topping $38,000. See this is where it’s the fear of missing out. For me, when I trade, I’m not going for these hot stocks. I like to trade based on my PowerX Optimizer and The Wheel strategy because they help me to keep my emotions out of my trading decisions by telling me what to trade, the best time to enter a trade, and the best time to exit. You see, if a stock has moved past my entry, I’ll pass on the trade and wait for the next one, because there will always, always, always, always be another trade. Trust me on this one, because if you are looking at PowerX Optimizer, and you see when you run the scanner every day, it is showing you a bunch of symbols. So for today, The PowerX Optimizer brought up seven symbols that I could have traded. Tomorrow it will be another two to eight. So obviously there is always another trade and this is why you shouldn’t be too scared. This is the next one and it is a big one because after all, why do we trade? We trade to make money, right? But there’s a saying, “Bulls make money, bears make money, but pigs get slaughtered.” You see, as traders, we want to take the trade that makes the most money. We want to find the next Tesla, the next Bitcoin, maybe the next GameStop, but often times when we find them, we’re getting in way too late. So how do we battle this greed feeling? Well, this is where we focus on SRC profits and having a solid plan. Have A Plan This is actually the third thing that I’ve learned in my trading career. Have a trading plan, and don’t make it too complicated. A solid trading plan is a cornerstone of being a successful trader. There have been times when somebody will buy a stock, and when I ask them when they’re going to sell they say, “When I made enough money” or as someone said to me recently, “After it went to the moon,” right? When is this? Probably never. You got to have a plan and this is why I have these two trading strategies, which is The Wheel trading strategy, and it is the PowerX strategy. So what is a trading plan? A trading plan tells you three things, and I’ve touched on these already. A trading plan tells you what to trade, when to enter, and when to exit. When it comes to exiting, we exit either with a profit, or we are exiting with a loss because losses are part of our business as traders. So let’s take a closer look at the three elements of this trading plan. First of all, what to trade. This is in general, a decision that you need to make. Are you going to trade options, stocks, or futures? It’s important to define what you want to trade so that you don’t get distracted. See, for me personally, I trade stocks and I trade options. I’m buying options according to the PowerX strategy, and I’m also selling options, according to the rules of The Wheel strategy. Now, the next question is when exactly are you going to enter? And this is super important, think back to the idea of FOMO, the fear of missing out, right? You need to know at what price you want to enter a trade and you need to be able to move on it so that you get in, right? This is where limit orders come in handy. So this is where here for example, with when to enter I’m using again the PowerX Optimizer because it tells me exactly what is the option premium that I should be getting in order to achieve my goals. So for me, it is super important to have a tool that gives you this information and not guessing when you should get in. This is why for me, it helps me tremendously to do this on indicators, and the indicators that I like to follow are the RSI, the Stochastics, and the MACD. By doing this, you see, I can take the emotions out of trading which was rule number two. This is where, again, the PowerX Optimizer for me is an indispensable tool. Originally it was just programmed for me, my head coach Mark Hodge, and my son a few years ago. Now it’s available for everyone. It saves me hours and hours because it scans for me. Since I have my rules in place, I can quickly scan the charts to see what I’ll trade and what I won’t trade which makes my life so much easier. You need a great trading strategy, you need to have professional tools, and you need to have the right mindset. We can talk about strategies until we are blue in the face, but if you are not following the strategy, it is absolutely useless. What else does a trading strategy have to tell us? Well, this is where we’ll talk about exiting, and we need to know when to exit either with a profit, and in order to define this, we are using a profit target, or with a loss. For exiting with a loss, I always like to use, when it is possible, to have a stop loss. Using the logic “when I make enough money” is not a proper exit strategy. I know this because I did that in the beginning, and I was just swinging for the fences. I entered a trade risking $100 and I wanted to make $10,000, but it doesn’t work this way. Now, what are great exits? How can you define exits? There are several ways. You can use support and resistance, right? What are tools for exit rules? You can go for a certain percentage, it really depends on what works best for you. For me, it is a profit target and a stop loss based on the average daily range. The average daily range measures how much a stock move from top to the bottom, and a good rule of thumb is for a stop loss, you use one times the ADR, and for a profit target, you would use two times the ADR. For example, let’s pretend the ADR is 40 points, or instead of 40 points we could just say $40. So this means that my stop loss should be when the stock moves down $40. So if I have an entry of $850, we minus $40, this means at $810 I would get out. Now for my profit target, I would use two times my stop loss. So here in this case it would be $80. So again, if right now, my entry would be $850 plus these $80, right? So I would exit at $920. Now let’s just say I’m trading 10 shares, right? So this means that I would lose $400 if I’m wrong, but I would make $800 when I’m right. So I’m making twice as much on my winning trades than I lose on my losing trades. So stop loss and profit target based on the ADR. Now for The Wheel strategy, I do it slightly differently. For this strategy, I use 90% of the max profit. I can’t stress enough how important it is to be prepared when you are trading. If you’re trading without a plan, you’re failing. If not in the short term, then for sure in the longer term. Summary So brief summary. What are the three things that really turned my trading around? Let’s quickly summarize it. Number one, don’t focus on the outcome of one trade. Number two, don’t trade on emotions. And number three, have a trading plan. So these are the three tips that really turned my trading around, and I hope that this helps and that it helps you also to take your trading to the next level.

Education

by rockwelltrading

Optimized strategy is here + Midweek outlook! part 1 Hello, in this video I go over the optimized strategy and explain my thought process when entering a trade with this smooth like butter method of trading haha. If you're planning on trading with my strategy, feel free to ask for help and listen closely. There are key details in this video, take notes if you have to, I note in the video what is important and what is minor knowledge! thank you for watching.. please refer to part 2!

Education

20:00

by offgridtradess

How I Find The Best Trades Every Time: My 3 Step System On my $500,000 margin account thus far, I’ve realized more than $65,000. Now, I put $250,000 in cash into this, and since it is a margin account I got $500,000 in buying power. Today I want to show you my three-step process of how exactly I find these trades, and I want to show you two very specific examples of trades that I took today (At the time of this writing on April 15th, 2021). So let’s take a look at how I found and executed these trades with this three-step approach. Step Number One: Find The Right Stocks So step number one is where I use the tool, the PowerX Optimizer, and the Wheel Scanner. I want to show you exactly what this does because the strategy that I use is called The Wheel Strategy. This strategy means that you are first selling puts to collect premium. The second part of this strategy is, you may or may not get assigned the stock. If you do get assigned, you move on to the third step where you sell covered calls. So here is exactly what I do, and what I did this morning. The scanner within the PowerX Software updates every two minutes and shows me a list of stocks that meet my criteria. What criteria am I’m looking for? I want to make at least 30 percent annualized in premium that I would collect. So here’s what I do. First of all, I know that the stocks the scanner pulls up already meet my criteria. Then I look at the charts to identify support and resistance, mainly support, which is actually step number two. Step Number Two: Look For Support I look to see if there is any support. This helps me figure out if I want to own the stock at the strike price that comes up on the scanner. So for example, American Airlines came up with a strike price, as you can see, of 20 or 20.5. So the key question here is, “Do I want to own (AA) at the price of $20.5?” Well, looking back at American Airlines to pre-pandemic levels in 2019. I see that American Airlines has been trading very solidly between $26 and $38. So it seems to be a good company to buy at $20.50. Again, this is my main criteria here, deciding if I want to own the stock at the strike price. However, in the short run, I believe with all of the uncertainty that is going on with the pandemic right now, that the airlines might be hurt. I mean, you might have heard a few days ago that Johnson and Johnson’s vaccine got labeled as potentially dangerous, and therefore it is paused right now. It also seems that around the world, the outbreaks are flaring up here in the United States. It seems to be under control, but worldwide there’s a problem. So do I really want to own American Airlines? They dropped down as low as $8. So is this a good price to own them? This is where I can flag them as saying yes, no, or maybe. Now let’s talk about the two stocks that came up this morning that I liked (April 15th, 2021). The first one was (PLAY). So PLAY, Dave and Busters, came up with a strike price of 41.50. This is where I thought, “do I want to own PLAY at $41.50?” I looked back and zoomed out a little bit to pre-pandemic times before the coronavirus hit. They have traded solidly around $38. They’ve been trading as high as $64. I thought about if I’d be OK owning PLAY, at $41.50. So this is where I sold puts that expire next Friday. So the idea here is that we are staying above $41.50 by next Friday. So here is what happens if I’m right. I sold 24 contracts and I sold them at 50 cents each. Since options come in hundred packs, that’s $50. So the premium collected for 24 contracts, times $50, is $1,200. $1,200 for a little bit over a week, with today being April the 15th. It expires on April 23rd. So in 8 days, this is not bad at all. Right? This means that I’m making $150 a day. Now, if it closes below $41.50 I get assigned, and I am okay with this because this is where I decided I want to own the stock at $41.50. The other one that popped up this morning was Schwab (SCHW). Schwab reported earnings and as a result of this. They plummeted down and there was some really good premium in there, so I sold the 63.50. I sold 16 contracts for 14 cents. Now, this is expiring tomorrow, so this is a different play, right? The premium I collected here was $224. So obviously way less than the premium that I collected here for PLAY, but this is a play that expires tomorrow. So we want to make sure that tomorrow, April 16th, if Schwab closes above $63.50 I just collect the premium and have nothing else to do. If Schwab goes below 63.50 by tomorrow this is when I get assigned. So the important criteria here is, for the Wheel Scanner, is the so-called premium per day, or PPD. So in order for my account size to make the 30 percent annualized in premium I want to see at least $100 per day. So with PLAY, I’ll collect $1,200 in 8 days, when it expires next Friday. This means that we are looking at $150 per day. Then we had Schwab, and we collected $224. If we count today, this makes 2 days, so this brings our PPD to $112. So my goal is to collect $100 per day, and I want to be in 5 positions at any given time. So if we can do this, this would be $500 per day. $500 per day (this includes weekends), for 365 days, comes to over $180,000 per year, and I’m doing this on a $250,000 cash account, which is a $500,000 margin account. So, and as you can see, this is a little bit more than the 30 percent annualized, as you can see here. If we divide $180,000 by $500,000, then we see it is 36 percent. So there we go. You know what, sometimes I achieve the goal, sometimes I don’t. Well so far, this year, I’ve realized $65,000 in profits. So this is REALIZED profits. Now I do have unrealized profits and losses, and we’ll see how this turns out. And this is in 4 and a half months. So I’m basically on track to make a little bit more than the 36 percent here that I have as a goal. I’m on track to make probably around $200,000 for the year. Step Number 3: Any Negative News? This step involves checking to see if there is any negative news. Here’s how I do this. I just Google the stock and click on “News.” When you click on “news,” it shows you the Google searched for news articles, and you can scan these for any negative news. What I’m mainly concerned about here are lawsuits, and clinical trials. When they have a clinical trial, they can either go very well or very badly. Possible bankruptcies, bankruptcy. So these are the key things that I’m looking for when I look for negative news. Summary So how do I find the best trades to trade? My three-step process is I like to make my life simple and easy by using the PowerX Optimizer and running the Wheel Scanner, because I want to make, on a $250,000 cash account, around $180,000 per year. That would be $15,000 dollars per month. For me, this is trading for a living. I can cover my living expenses with $15,000 per month. Step number one is where I get the technical criteria. Next is where you look for support and decide if you want to own the stock at the strike price. This is where you simply go through the scanner and say, “yes, no, or maybe.” Finally, is there any negative news? Because if it is too good to be true it is. You should definitely look up stocks on Google, click on “news.” So you can just read through this fairly quickly and make an informed decision. So that’s basically it. This is my three-step approach to finding the best trades.

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