This latest excerpt from The PlayBook comes from Chapter 9: “Iceman: No Guts, No Glory”: — So let’s say that now you can risk 30 percent of your intraday stop loss and hold for the real move. Next you want to get even bigger. At this point, most incorrectly focus on adding share size. So if 5,000 was your biggest position, you … Read More
Is Options Trading “Better” Than Stock Trading? Discover the Critical Differences
How does option trading differ from stock trading? This is a great question to ponder as you start to look at the options world. There are many differences due to the makeup of options and there are similarities as well. So let’s take a look at the similarities first. When you buy a stock you want to sell it at … Read More
Credit Spread or Debit Spread: Which Options Trading Strategy is Best for You?
Is there a difference between a credit spread and a debit spread? Of course you might answer that you receive a credit for the credit spread and pay a debit for the debit spread, right? Well, you might come to find out that it is never as simple as one might think with options trading. Let’s take a look at … Read More
Accelerate Your Options Trading Journey: Join a Mastermind Group Today
Have you ever joined a trading group? You know, the kind that meets once a month in your local town or maybe an online group or chat room? Are these groups a good idea and can they really help you? Well, it really depends on what you are looking for. In his book High Performance Trading, Steve Ward writes “There … Read More
Luck: The Unspoken Element
There is a quote by Seneca, a first-century Roman philosopher, that says, “Luck is where the crossroads of opportunity and preparation meet.” While the idea of luck as it relates to trading may seem like gambler’s term, the fact is that sometimes you just get lucky. Clearly over the long run, the losses that you will incur from trading without … Read More
What Is the Right Risk/Reward For My Trades?
What is a good ratio to start out with, 2:1, 3:1? @mikebellafiore I was asked this question during a recent Webinar, “Trading Fundamentals: Things Great Traders Do and Never Do”. We teach our new traders to look for a risk/reward of 1×5. That means a downside of 1 for an upside of 5. More specifically you might risk 10 cents … Read More
Getting Into Trading Shape: A Trader’s Story
Hi Mike, September 1st 2013 makes it three years that I have been trading full time. I’m writing this email to seek your experienced trader’s counsel. I don’t have any job and I’ve been thinking about my experiences trading, which for the most part have left me bitter. You must be wondering how I’m still continuing to trade after three … Read More
Understanding Call Option Dynamics When the Market Rises
When new traders first discover options trading they get excited by the leverage that buying options can provide. One call option contract allows you to control 100 shares of the underlying security. So instead of buying the stock on margin, you can buy an option using a lot less capital. This leverage attracts traders who have limited resources because under … Read More