ASSUMPTION TRADING
When I started trading options (several years ago) I was with unaware of any trading help available, and so I started surfing the web for resources. A small fortune (depending on one’s definition of fortune) was spent learning everything available that could be found. Determination played a role in learning what I might do in retirement. There are few individuals who have listened to more webinars, and/or subscribed to more trading sites than me?
It is also my assessment that there is a lot of bogus information being advertised or posted on the web, and that many “gurus” make more money advertising their wares than trading their expertise (?). My desire would have been to find useThinkScript.com several years before I did (I’m actually not sure when it started). New traders, and old timers alike, are fortunate to have this resource available.
First, let’s explore “Assumption Trading” a bit and see how it fits into the reality of options trading.
As we travel through life we constantly make assumptions concerning our pathway choices. A close friend of mine (who was much smarter than me) said: “All assumptions are true; All assumptions are false; We must make assumptions!”
So, what is the first assumption we should make about the stock market and trading options successfully? To my way of thinking the first assumption we must make is that “assumptions” do not work when trading the market.
Many are sincere in their ability to become knowledgeable traders, but *** I quickly learned, sincerity cannot be the bottom line.
The market was “sincerely” designed only using mathematics and probabilities for its basis, and it will take mathematics and probabilities to have any hope of being successful trading options in the market.
This is where useThinkScript.com is one of the best resources available to us (both newcomers and old timers). We must always continue to learn and hone our process! “As long as we are green traders we continue to ripen. It is only when we think we’re ripe that we tend to get rotten!”
Since the market is designed mathematically, we need to use mathematics in trading to be successful traders.
How does AI (Artificial Intelligence) play into our becoming successful traders’. As of this minute artificial intelligence cannot tell us where the market will close today. Artificial Intelligence cannot tell us where the market will open Friday morning, or where it will close Friday.
Artificial intelligence can take a lot of historical information into consideration, and from that information, determine what the market has done historically, look at where the market is currently, and make projections (assumptions) as to where the market will be in the near (or long term future).
To be successful one needs charting with indicators that take into consideration, direction, volume being traded, money flow and mathematical tendencies (ATR, SD, Pivot Points, Tops/Bottoms, the Greeks, etc.) currently in place. Even the market itself says that current ATM (At-the-money) price has a 50/50 chance of moving up, or moving down.
There are many types of indicators and charting available with everything you need for success already available here on useThinkScript.com. (and like new options on an automobile new indicators and charts one are being developed constantly).
There are Oscillators (which show where they have been, where they are at, and the apparent direction they might be heading); We can use a Parabolic which shows the Stop and Reverse of Candle direction; there are multiple indicators that measure Direction from multiple perspectives. There just aren’t indicators that can tell what might happen next. It is for this reason that one should never use any indicator in isolation. A successful trader should (WILL) have multiple reasons (indications) for placing a trade. Intuition (assumption) is not one of those indicators.
The most important decision a trader can make is to choose charting and indicators that fits your eye and helps determine direction a stock (ETF) might be heading (your GPS System which I have talked about in a previous post).
All of this is available to you on this website. There are multiple options (no pun intended) for an individual to choose from. Many experienced traders are sharing their knowledge and how to effectively trade. REMEMBER: 90% of traders lose money. This website follows one of the Basic Principles of Life called “Group Good” which states: “What you do (recommend and post) should always be for the greater group good.”
Happy Trading!
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