Why do I still hear from investment “experts” that we should be buying stocks? It’s always the same story. Buy stocks and forget about them. Eventually they’ll go higher.
Don’t listen to this nonsense! Click here to discover how to earn 11% per trade every 20 days in 2018 with these simple trades.
That’s all the mainstream media, your mutual fund advisor and your personal money manager will ever tell you.
Investment professionals would have you believe you should diversify among asset classes, pick the right stocks and average-in. They will point to charts that show if you held this asset or that asset over the last 30, 50 or 70 years you would have made healthy returns.
Could it be because the professional investment managers and mutual funds don’t care about your financial future? Or is it that they are too busy trying to sell their products that they have forgotten their job is to make clients money
If they truly cared they would use every investment tool at their disposal.
Honestly, it’s a big mistake if you’re not using these trades (click here for details).
Which brings me back to the performance of the market and how you can learn to make money using strategies that take advantage of bullish, bearish or range-bound markets . . . and do better than the “buy and hold” mentality that dominates the psyche of your financial advisor.
So, how do you make money in the markets? That’s the question the money experts should be asking.
We, as options traders, have the ultimate advantage over other investors.
Unlike most investors, we have the ability to structure our positions in a way that generates profits regardless of the direction of the underlying stock or ETF.
Take for instance, the iron condor: an options strategy that thrives when the market goes nowhere. It generates above-average profits when the underlying security remains range-bound for the duration of the trade, which in our case is typically 30-45 days.
The best part is, we have the ability to choose our return. Just keep in mind, the higher your expected return, the higher the risk.
So far in 2018, we have managed to have a 100% win ratio with an average return of 11.4% per trade. Our cumulative total is 102.9%. And we have two more winning trades on the way.
Here are the first two steps in my three-step process for trading one of the best income strategies in existence . . . the iron condor strategy. If you wish to learn more about how I trade iron condors, check out my upcoming webinar. The educational webinar will be followed by an extended question and answer session to help get you started and a few live trades as well.
First, a disclaimer of sorts. If you don’t understand the terminology, don’t be discouraged. Focus on the concept. Pay attention to the numbers, you’ll learn the terms with repetition.
The first requirement when trading iron condors is making sure you are using a highly liquid security, in most cases an ETF. Highly liquid, in the options world, just means that the bid-ask spread is tight, say within $0.01 to $0.10, at least in most of the ETFs I trade.
For instance, take the heavily-traded SPDR S&P 500 ETF (NYSE: SPY).
The ETF is currently trading for $275.13.
SPY is just one of 50-60 ETFs that is considered “highly liquid” among most options traders. I focus my attention on roughly 30 of those ETFs.
I then move on to my mean-reversion indicator, otherwise known as RSI.
RSI can be seen below the SPY chart above. You’ll notice peaks (overbought) in green and valleys (oversold) in red. I typically want to place a trade when the indicator is in between those areas. It’s called being in a neutral state. If it is not, I shift my range accordingly.
Now the question is, how do I select my range?
I hope to see you all there!
— The Option Specialist
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