3 Step Process To Successful Trading

Step 1 - Learn to properly analyze a stock to determine the most probable future direction.

To do this we teach you a very unique method of Technical Analysis that combines the Elliott Wave Theory with certain Fibonacci ratios to identify key turning points for a stock or any other liquid market.

Our utilization of ABC and Technical Support gives you clear cut rules and guidelines that must be met in order for a trade set-up to qualify. This allows you to focus in on one key market set-up that identifies the most dynamic moves in the market regardless of market direction or time frame.

 







Step 2 - Understanding and applying proper money management and risk/reward ratios

Even the most successful analysis method will lose money if not coupled with proper money management. And a below average analysis method will make money if used in conjunction with proper money management. We can not stress this point enough.



Hypothetical Trading Account


Beginning Balance: $100,000

Options Portion: $10,000

Stock Portion: $90,000

   
Example Option Strategy
   
10 Total Trades (avg hold time 60-90 days) $1000 position size
5 trades lose 70% -$3,500.00
5 trades gain 150% $7,500.00
   
Net Gain Option portion per period $4000
   
Repeat 3 times per year $12,000.00
Repeat 4 tims per year $16,000.00
   
Example Stock Strategy
   
10 total trades (avg hold time 6 to 9 months) $9000 position size
5 trades lose 25% (-2250 per trade) -$11,250.00
5 trades gain 75% (+6750 per trade) $33,750.00
   
Net Gain Stock portion per period $22500
   
Repeat 1.5 times per year $33,750.00
Repeat 2 times per year $45,000.00
   
Total potential gain stock & options $45750 - $61000
45% - 61%

This is a hypothetical illustration and does not include taxes, commissions, or slippage.


Step 3 - Selecting the proper strategy to take advantage of the coming market move

Strategies you'll learn include:

  • Married Put
  • Covered Call
  • Long Call
  • Collar Trade
  • Long Put
  • Vertical Bull Spreads
  • Straddles/Strangles
  • Vertical Bear Spreads

Many traders may choose to use option strategies as part of their trading game plan, especially if they are starting with a smaller account and want to leverage their investment dollar. Proper money management should still be used when trading options.