CAN TRADING BECOME LESS COMPLICATED
For posters and traders alike
There is a maxim related to GROUP GOOD: Anything we do (or in this case post) should always be for the greater group good.
For posters and traders alike
There is a maxim related to GROUP GOOD: Anything we do (or in this case post) should always be for the greater group good.
First of all: There are almost 6,000 companies with optionable stocks, as well as several hundred more ETFs with listed options. Many of these stocks are not worth our time, effort, or energy.
This trader (me) had a long-term habit of screening more than 50 stocks at a time, looking to see which one’s included some of my trading parameters. I had as many as 10 or more stocks on my screen at one time, hoping to find one to quickly grab. A friend recently asked: “How many horses (indicators) can you get into a small corral?” (or charts on a small screen)
My charting was once filled with a plethora of indicators on the chart as well as multiple lower studies as well. It finally dawned on me that I was creating insanity for myself, and was making trading more complicated than it really needs to be.
As a side note: Because of my background in healthcare I was visiting a Mental Health Ward one day and asked a patient “Why are you here?” His answer: “Because I’m not all there!”
So, what are we actually looking for when trading options? How about momentum, direction, volatility, close Bid/Ask and a few other parameters such as: The previous day’s High/Low; ORB; PSAR, some upper labels showing a few extras like: Multiple Time Frame activity; ATR, a few Chart Arrows, a couple of important EMA lines, and a bubble or two suggesting a change in direction.
Everything listed above can be placed on one chart without our eyes glazing over?
Question: How many trades can you actually manage at one time? It was my experience that overload came easy, and often.
One if the Natural Laws of Life is “The Law of Increase” which states:” What we put the energy of our thoughts into will increase.”
Let’s put this in simple terms since this is probably one of the most important principles for any person who wishes to be successful. Focus on the simplest things necessary for trading.
Focusing on multiple extras will only increase your trading dilemmas. Focus on the simplest parameters necessary and the rest will take care of itself? This is why focusing on problems only increases the problems when one should just focus on solutions and then problems will take care of themselves (no extra charge for this wisdom which I learned the hard way).
Let’s put this in simple terms since this is probably one of the most important principles for any person who wishes to be successful. Focus on the simplest things necessary for trading.
Focusing on multiple extras will only increase your trading dilemmas. Focus on the simplest parameters necessary and the rest will take care of itself? This is why focusing on problems only increases the problems when one should just focus on solutions and then problems will take care of themselves (no extra charge for this wisdom which I learned the hard way).
The “College of Hard Knocks” has stopped me from incessant screening. All stocks go through the same motions: Up, Down, and Sideways. My trading consists of only two ETFs (SPY & QQQ) that meet all my trading criteria, i.e. they move Up, Down, Sideways, have volatility, close Bid/Ask and are easy to trade.
When trading the SPY we are screening 500 stocks all at the same, time and all on the same screen. And with the QQQs we’re looking simultaneously at 100 stocks and all with no onerous screening.
Why then trade more? Pick one or two good stocks (or ETFs). Trade their movement on a daily, weekly, or longer basis. Use the best charting you can find. Trade only one or two at a time (you can always trade as many contracts as desired).
If, and when trading longer term spreads my usual is to accept the risk being taken, place a GTC for a 50 -75% profit, and let it be. Read my previous post on Catching Butterflies for low risk, and if ITM at expiration can make for great profits.
Life should be kept as a simple as possible and trading the market should be kept as simple as possible as well! It’s actually an individual choice?
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