Believe it or not, trading options rather than stock can be a better choice in a market as whipsawy as this one.
And despite all the recent volatility that has surged into the market… my options portfolio has returned 73% since April 1, 2019.
Following along can’t be any easier… because when it comes to trading options… I alert clients on what I’m going to buy and at which price– all in advance.
There is no chasing, no guessing, and we make everything simple.
Because simple works.
And do you know what else?
My highest drawdown on this portfolio so far has just been 6%.
That’s right, at no point was I down more than 6%… despite all the volatility rushing into the market the last two weeks.
Well, it’s simple actually… I have specific chart setups and I plan all my trades, allowing me to consistently lock in small winners and compound my returns over time.
When I trade, I’m highly selective. Sure I could’ve placed a lot of bets last week and swung for the fences. However, I’ve learned that just looking for consistent base hits is a better way to build your account.
For example, I bought Starbucks Corp. (SBUX) options last week… and here’s the chart I was watching.
Basically, I noticed a bullish signal based on my moving average lines… and I was expecting the stock to grind higher and break above $97.50 before September 20, over a month from when I bought the call options.
If you look, I had my target set. I was looking to take profits at $2.40… or a 13% profit target.
Well, in just a few days, my order got filled and I locked in that winner.
That wasn’t the only options trade I made money this week. In fact, I actually noticed a bullish setup in Snap inc. (SNAP).
The stock pulled back due to market volatility. However, I liked the overall price action as the stock pulled right into the 34 exponential moving average (EMA). Once I saw that level hold as support and catch a bounce I watched it closely.
The very next day, it broke above the 20-day simple moving average (SMA), which was really bullish price action, so I decided to buy call options in SNAP.
The day after I bought those options, I was able to lock in a 13% winner in SNAP.
If you keep hitting 10 – 15% winners consistently, and only risk around 2% of your portfolio on any given trade… it adds up over time.
Think about it like this do you think it would be easier to hit one 30% winner or a few 10% – 15% winners?
Well, I’ll tell you in the markets, it’s a lot easier to get base hits than to hit home runs.
Not only that, when you swing for the fences all the time, it keeps you from focusing on your best setups… and a lot of my clients have been having success with focusing on base hits and building their accounts up.
E.B. : out sbux 15%
S.C. : outSBUX 15%
K.T. : Thanks Petra, SBUX and SNAP!
M.B. : u guys make it easy!
P.S. : Out SBUX 18%
E.B. : out snap 15%
S.C. : out SNAP 1.15
If you’re looking to maximize your returns, while minimizing drawdowns… you’ll want to check out my latest training session, in which I go over my simplest trading strategy that has helped me make more than $2.4M in career trading profits. Click here for all the details.