AGAIG Tutor: You Never Lose Money When You Take A Profit In ThinkOrSwim

[csricksdds]

AGAIG TUTOR “YOU NEVER LOSE MONEY WHEN YOU TAKE A PROFIT”
A SHORT NUGGET TO PONDER?​

You’re walking along a path, and you see a $20 Bill lying on the edge. No one is around to ask if it’s theirs. Do you pick it up or think “I’ll be back through here in a few minutes and if it’s still there I’ll pick it up?”

It makes me wonder why someone who has a decent profit on an options trade doesn’t take it when it’s lying there, instead of hoping there will be more there in a few minutes?

That’s what the 90% of traders who lose money do. It’s the 5-10% (the percent of option traders who make money) that take the easy profit lying there (begging to be picked up) instead of waiting for more!

One of the first lessons learned when I started trading options was:

I can’t lose a little money on each trade and make up for it with volume!

However, I could make a little bit on each trade and with a volume of easy trades it could turn out to be very profitable!

As Yogi Berra once said: “If you come to a fork in the road take it” or to say it my way: “if you come to a fork in the road (a change in direction) and there’s a $20 Dollar Bill lying there for Pete’s sake take it! $20 earned is far better than $2 lost.​

What rate of return is your bank currently giving you on your money? A very small amount has been my experience. I have known traders who trade in/out for a mere 10%, 15% or 20% gain (I strive for 24% myself). These individuals put their trade in place with a GTC for the amount (gain) they are seeking and then watch it come true (but are smart enough to monitor it as well).

I used to screen 30+ options to find a good one to trade. NO MORE. Why scan a lot of stocks (ETFs) when 3-4 can provide a good living for you. Right now I have SPY and QQQ on my right chart, and on my left chart is NVDA and MU. My right chart always stays the same and my left chart frequently changes. It might be GOOGL, TSLA, MSFT or another security that has a close BID/ASK since a close Bid/Ask provides for an easy in/out.

A CSR THEOREM: Those who wait for more usually get less!​

What do Stocks (ETFs) have in common?

They all move up and down throughout the trading day (EVERY DAY), and I can easily day trade all four I have in place. Just because NVDA doesn’t expire until Friday doesn’t mean I can’t trade its ups/downs and be in/out today. There’s nothing wrong with being in cash at the beginning of the day and in more cash at the end of the day as well. Sleep comes better that way!

Trust your indicators, not your instincts. The Market Makers have an easier time with your instincts, and a harder time with indicators that are charting trend, direction and momentum.

Today I’m using my AGAIG Visual Options Trading Chart http://tos.mx/!Kj9bc5iQ and probably would be having a more successful day if paying attention to my trades rather than writing this little essay!

Oh Well...Straight ahead!

 

[edmarilyn]

Thank you for your charts and your tutorials. I appreciate the time you put into explaining the differences between the candles. I think the Japanese candles keep your emotions in check as well.
Do you use a trailing stop or just watch and exit when you get the alert? Also do you trade more than one ticker at a time and only options or both? I am a 61 year old retired school teacher who wanted to trade forever and started 5 years ago only to break even at this point and want to throw in the towel
Maybe your charts will shed a little hope on my trading I truly enjoy trading and started at 0 learning everything from opening up a platform and learning how to use it to place a daytrade to learning about options etc.

 

[csricksdds]

Thank you for your charts and your tutorials. I appreciate the time you put into explaining the differences between the candles. I think the Japanese candles keep your emotions in check as well.
Do you use a trailing stop or just watch and exit when you get the alert? Also do you trade more than one ticker at a time and only options or both? I am a 61 year old retired school teacher who wanted to trade forever and started 5 years ago only to break even at this point and want to throw in the towel
Maybe your charts will shed a little hope on my trading I truly enjoy trading and started at 0 learning everything from opening up a platform and learning how to use it to place a daytrade to learning about options etc.

I only have two trades in place at a time (often multiple contracts but only two trades). I don't use trailing stops although I do use a GTC for exits. You can usually see when you get double tops/bottoms with an impending change in direction. Also watch normal pivot points, the Green/Red lower bars with the traffic light and the MTFs. I usually make 2-4 total trades per day with a positive cash position at market end. My Short/Long bubbles are good turning points as are the Murrey Pivot points. It's better to look back and see that you left a little money on the table than giving money back to the table. Try not to make money in the morning and give it back in the afternoon!