It’s Not What You Trade, It’s How You Trade!

I’ve talked about strategy plenty of times before, and after the past two weeks of trading, it’s easy to tell how important it is to a strategy!

Last week the markets experienced heavy selloff causing the major averages to decline sharply.

This undoubtedly shook up novice investors who have grown accustomed to stocks only going up…

But you can protect yourself from most of the damage during periods like this by sticking to a strategy and not trading emotionally.

Look at what happened on Monday: The S&P saw its best performance since June, the Nasdaq tore higher, and so did the Dow!

This is simply the ebb and flow of the market… And if you’re trading with what I call “lifestyle” options, you’ve got the staying power to weather the storm!

The strategy itself is not complicated, find stocks with short-term bullish momentum and buy in-the-money options on them with plenty of time…

Buying in-the-money gives you downside protection, and choosing contracts with a few months till expiration gives you more time to be right.

Following this strategy, you’re equipped to ride out those market dips with ease while you wait for green!

Bottom line: It’s not what you trade, it’s HOW you trade.

So set yourself up for success!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: Let price lead your trading decisions—not narratives.

Greg Guenthner
Successful traders must go against the grain. That means you’ll sometimes find yourself betting against some of the market’s most popular ideas.

That’s how you know you’re onto something good.

I know the so-called experts are going to initially pan my best trading ideas. That’s because price leads the news. You’ll find most of your strongest trading opportunities are the quiet breakouts that everyone hates. But when all is said and done, you made money while the herd was stuck on an old narrative.

There’s a lot of noise out there. Do you have the discipline to ignore it?

Many folks don’t. They get caught up in rumors, guesses and hot tips. Don’t make that mistake. It never ends well…

I’m sure you already realize how sloppy, undisciplined trading will cost you money. Sure, you might get lucky now and again. But you’ll never achieve consistent success shooting from the hip.

Your trading rules keep you focused and profitable. If you’re reckless and break the fundamental rules of trading, you’ll end up broke. It’s that simple.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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