Updated Trading Strategy

Here is my updated trading strategy:

• Trade high volume, high price stocks
• Look for the stock to be around the middle of its 52 week trading range
• High IV rank of 30% or better preferably 50% on up
• 90% probability of success and at least 1-2 standard deviations away
• Between 7 and 35 days left till expiration
• Leg into an iron condor with vertical spreads
• Collect at least .70 for each trade 
• Look to close each side at .15 one week later but no longer than 2 weeks later
• When the stock moves big one way look to close the winning side for a profit and re-deploy another iron condor
• Always stay at 90% probability OTM (out of the money) when you place your trade
• Never trade this strategy during earnings – use a different strategy 
• Use Person’s Pivots (PPS) to time entry
   

*Cash management

Leave $2000 available for options trading so you can fix any situations that go against you or jump on opportunities that may arise

Making A Successful Trading Plan

When you make a plan you need to stick to it as best as possible.  You can refine it along the way but the point of having a plan is to learn what variables are out there so you can account for them in future revisions of your plan.  That’s what the Constitution is: a plan for governing this country. We add amendments to it to help refine what it is because of events that have happened over the years.  These variables have helped to clarify what our nation’s purpose is.  

When you trade you should clarify your trading with your intent.  Are you just trying to make monthly income or are you looking to build a nest egg for retirement.  This should be factored into what type of trades you will make and which securities you will trade.  Stick to your plan for a few tries and if it’s successful review what made it successful and stick to it.  If there are problems try to find out what went wrong and refine what you are doing to address those problems.  

Making a trading plan takes time and if you are consistent you will come up with a successful plan that works for you.  

I’ve Been Tasty Trading

I’ve been away for a little while trying to refine my strategy.  After finding the Tasty Trade network I wanted to digest a lot of what they were talking about to be able to speak intelligently about my own perspective on their approach.   

I believe that everyone has to find a trading strategy that works for them.  Each individual trader has their own risk tolerance and temperament and you can’t expect everyone to have the same results with one style.  There are however certain key aspects to trading that everyone uses to help them be successful and that’s what the Tasty Traders are using.  The concept of selling implied volatility is I think one of the foundational keys to their success.  One of their other concepts of taking profits at 50% of max profit is useful as well.

I was not as successful with one of their techniques like buying a poor man’s covered call as synthetic stock.  Time decay or theta is a very real force and should not be messed with.  

The best strategy for me at this point after trying several different approaches is to sell out of the money vertical spreads.  I have come up with a strategy that is an updated version of my previous one that I am having success with now.  Last winter I went 2 months without a losing trade with this strategy but I had some close calls.  I wanted to refine it so I could make it less stressful and more lucrative.  

I will post the strategy in the next day or so.