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Raise Your Revenue - Alter Your Trading Plans To Match Market Conditions
When I initially began trading back during the '90's, I was quite fortunate. I had started trading at a time when the market was headed practically straight up. My first strategy was writing covered calls which blended having a rising market in such a way that I nearly never lost.
The perspective of time allowed me to understand that no market, good or bad can last forever. The only real constant is change. Under such circumstances, I learned to 'go with the flow', adjusting my strategies to match market conditions.
Medium Term Trades
I explained earlier, my favorite medium term technique has long been the covered call. This technique enabled me to control my fiscal affairs. By setting up trades created specifically to 'mature' at a predetermined date thirty, 60 or 90 days out into the future, it gave me money I could count on to help overcome any slow periods of day-to-day cash flow.
While the premium began to dry up, I discovered writing covered calls increasingly more challenging. I began to look particularly for those stocks which were volatile, which may be used to temporarily take the place of covered calls as my medium term strategy of choice.
Stock Movement
Let's search for a stock which moves frequently. I have my Chart Navigator system supply this by quickly calculating the average daily range of stock for the last month or so. I will then look only at the stocks which have no less than a dollar and fifty cents or more movement each day.
You have got to have some concept of WHICH way they are most likely to move. We additionally narrow this search of high volatility stock to only those stocks which move in a somewhat predictable range, much like a 'channeling' stock.
Given these facts, let's look for some more characteristics. First, notice that the stock has stayed close to or within this range for quite a few months. Additionally, every 'oscillation takes upto a month, moving from the top of the channel to the bottom.
Bottom line, this stock is moving considerably, but going basically sideways. Now, let's trade this one medium term. If we can do that frequently, then perhaps we can stop being concerned regarding the availability of covered call trades!
The Trade
Just before you trade a stock, it is usually an excellent idea to know which way it's going. That's the obstacle! Trade it BOTH up AND down. Those are the only two ways it is likely to go (bear in mind the high day-to-day movement).
We know we can't purchase the stock And short the stock (at least not inside the same account), so why not buy a put And a call?! In such a case we might consider acquiring the thirty five dollar put along with the thirty five dollar call. Normally referred to as a 'long straddle', the position permits us to profit no matter WHICH way the stock moves.
Now, isn't it time to adjust your strategy to match market conditions? If you're a little hesitant or perplexed at all, employ the assistance of an investment professional. They may be conveniently located on the internet by doing a search for: reverse mergers, company going public, or reverse merger shell. At some point, it will grow to be easier for you to 'go with the flow' as well.
Raise Your Revenue - Alter Your Trading Plans To Match Market Conditions
When I first began trading back in the '90s, I was very fortunate. I had begun trading at a time when the market was headed almost straight up.
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