What a Trade Repair Strategy can do for You

We predict the outcome of a future price move; even so we do this with a high probability, we do not get the direction always right.
What do we do then?
Taking a stop-loss; however, our name derives from Never Stop Loss Trading and this was a bit lengthy. We teach multiple trade adjustment strategies for Stocks, Options, Futures, and FOREX.
So let me tell a story about a recent happening…click for the video.

Doing constant research, we are currently testing a market pressure indicator and like to trade preferably options on specifically formulated conditions (this opening pressure trade is still in an exploratory stage).
On June 28, our scanners picked PG to open with market pressure: We bought call option positions for next week’s options at 9:33 a.m. EST and paid $0.38/per share controlled.
TradeColors.com Chart at Trade Entry

The trade reverted and at 10:43 a.m. EDT and triggered our stop or adjustment level.

A decision had to be made and we prepare those decisions before we enter a trade, for easy execution (at any trade, you should have a plan-B):
A short credit spread was created: $0.50 wide and gave us a premium of $0.48.
How does this calculate up?

• We invested $0.38 and this would have been our maximum loss.
• If we exited the trade at the stop level, a loss of $0.30 or 80% would need to be booked.
• We did not take the stop, changed the trade direction and received a premium for doing so: $0.48, giving us a potential return on investment of 26% and increasing the risk of the trade by $0.02 or by 5%.
• A day later, we could have closed the spread for a premium of $0.03, which we did not accept yet, however it would have turned a $0.30 loser into an immediate winner, just a day later, giving us back $0.45 for the originally invested $0.38: Turning a losing trade into a winner.

If you like to learn how to trade this way, check out our NeverLossTrading mentorship programs, there we are teaching this and many other trading strategies.
For more information: contact@NeverLossTrading.com  or call: +1 866 455 4520.
Sign up for our Free Trading Tips, Reports, and Webinars...click here. 
Good trading,
Thomas
www.NeverLossTrading.com
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An Option Trading Tycoon Makes Money Opening to Noon

To continue our series of option trades, let us give you an example of how to take limited risk and beautiful reward trades. 

The example given is an example from an NLT-student:

Today, I gave a day trading and trade preparation class and we did not come off shabby, making a 59% return between 9:45 a.m. ET to 9:52 a.m. ET; while talking, exchanging, watching Level II Option Screens and going through NeverLossTrading setups. We went short with Puts on WYNN. The NLT Stock Alerts showed a NLT Light Tower Candle on the high and we knew what this means: 

With a Put, you can short the stock, even in an IRA – and this is what we did. 

However, take a look at the following chart, which some of us put into action: NLT signals are only validated if the following candle surpasses the set price threshold, else we ignore them. The chart shows AAPL on a short-term trade with two wonderful trades between 9:45 a.m. ET and 11:59 a.m. ET: 

• One short: $525.46 to $523.26 (-$2.20)
• One Long: $526.00 to $5.27.87 (+$1.87)

Trading options, the two trades together produced a 70% return, using the NLT Delta Force Concept (part of our mentorship). 

AAPL NLT HF Day Trading Chart

Be an Option Trading Tycoon: Pay Yourself at Noon!

Learn this trade at the NLT HF Day Trading mentorship!

People at times tell us our Mentorship are expensive.

Our opinion: “They are not, most of the students make a two month payback” and if you want to start slow check  TradeColors.com and NeverLossTrading Alerts. 

A $297-training, which most probably does not work is really expensive, it might cost you all your funds.

Be part of our free reports and webinars: http://neverlosstrading.com/Reports/FreeReports.html

Good trading, 

contact@NeverLossTrading.com

Pre-Market Mover Scan by NeverLossTrading

Daily our scanners skim through the pre-market session to put selected stocks on our plate to either day trade the underlying or day trade their options. 

Today, February 24, NFLX came on the radar and alerts went out at 9:05 a.m. ET. 

This is one of the shares, we like to day trade with options. 

At the 10:10 a.m. candle, the underlying gave us a buy signal and option execution was the name of the game. 

NFLX Call Option Trade

Imagine, you bought at $1.50 and you sold at $3.50

This turns your $1,500 invested into $3,500 in the matter of one hour. 

Those strategies, the referring indicators, their trading plan and so much more; ready for you to learn and put into action: NeverLossTrading HF Day Trading

 

Check out the details or ask for a personal consulting hour: 

Call +1 866 455 4520 or contact@NeverLossTrading.com

 

If you not yet ready for a new trading system, sign up for NeverLossTrading Alerts and know where the markets move.

Weekly Option Trading Wisdom

This publication is your money saver – and on top, it is free. 

Option trading is fantastic, when you know what you are doing – it is dangerous if you don’t.

Why? 

Multiple variables and instances define the price of an option and you can apply various option strategies to trade at specific price constellations of an underlying. 

The inspiration for this article came from reading a publication, where a trading educator proclaimed the ultimate wisdom to “Instant Options Income”. 

The referring trading strategy was a credit spread with weekly options and after eight days (the time used in the example), you keep the premium made. A high probability trade setup was found by some moving average crossings and underlined by the trading strategy, where you will be profitable if the share price goes up, slightly retraces or moves sideways. The trade had the following components: 

• 10 Bull Put Spreads: You expect the price of the underlying to stay above a defined minimum price level to keep the premium received
• Every contract controlled 100 shares
• The obtainable premium received was $230
• The spread of the option strike prices was $2.50

In the shown example, the trade was made and the premium kept. It all sounded good; however, to evaluate this trading example, in respect to repeatability, let us consider the following: 

• $30 average commission to open the trade and in case you have to close it, you again pay $30
• The risk of the trade (Spread x Contracts): $2.50 x 10 x 100 = $2,500
• Potential net-return of the trade (Premium – Commission): $230 - $30 = $200

For every trade, an odds approximation is essential: In this example, let us take 10 trades and out of those nine winners and one loser: What will be your trade balance?

• The expected net return of $200, times nine positive trades = $1,800 (gain)
• If you get caught once with a max loss = $2,500 + $30 = $2,530 (loss)
• Even so you had nine out of ten positive trades, your trade balanced = -$730 (loss)

In essence, the potential risk of the trade is not in balance with the potential reward.

To quantify the real probability of this trading strategy and what it probably will do to your trading account: Take the at-the-money Straddle plus Strangle premium, divide it by two, add and subtract this result to and from the actual stock price. This will give you the 1-Sigma price range, where the market maker expects the price of the underlying to end up being at expiration. When using a Gaussian distribution the 1-Sigma range contains the final price of the underlying at expiration with a 68% probability.  

Rounding the 1-Sigma range to 70% and relating seven winning trades and three losers, your trade balance after 10 trades might end up being: $1,400 – 3 x $2,530 = -$6,190 (loss).

This is how quickly a high probability weekly option trade setup can end up draining your trading account and with this article we want to help you to stay out of such trading strategies. 

Does that mean, weekly options are not good to trade? 

Absolutely not, they can be a perfect trading instrument, if you use limited risk and high upside reward strategies; however, you always need to consider that the weekly option deteriorates about 20% of its time value per day you hold it. 

In the NeverLossTrading mentorships, you will learn applicable trading strategies for Stocks, Options, Futures and Forex. 

Check our offering for details: http://neverlosstrading.com/Classes_Overview.html

 

Schedule a personal consulting our: Call +1 866 455 4520 or contact@NeverLossTrading.com

 

Good trading, 

Thomas