The Wizetrade Options Blog

If you don't paper trade the same way your going to trade for real, how can you expect to make the switch successfully.

There is no magic button, secret hand shake or special strategy that solves all of your trading problems.  Learning to understand the markets leads to successful trading.

Today has been a day of unexpected earnings "under-performance." Let's once again re-evaluate how we handle this.

As always, part of your trade plan should be to consider the "What if's..."

• Stock moves the necessary amount:
  • Close trade at the market open
  • Close trade after a couple of days if charts show movement continuing
  • Close losing side, allow winning side to run
  • NOTE: Consider how much time is left till expiration; you may be limited in which decision to make

• Stock doesn't move the necessary amount:
  • Close the trade at the market open
  • Re-evaluate the charts over a couple of days to determine if direction is being established
    • If you see a direction, sell losing leg, let winning leg run
    • If you don't see a direction, close trade to avoid further losses
    • If you have plenty of time, wait another few days & re-evaluate
  • NOTE: Consider how much time is left till expiration; you may be limited in which decision to make

These are just a few of the possible reactions to "what if..." scenarios. Of course, you should always consider this before entering a trade to be prepared.

And remember, there will always be losses. How you handle them is a huge part of how successful you will be. Your true success is how you perform over a series of trades, not on each one.

Angie C.

Do you think that a loss is the end of the world?  You just missed that perfect trade that will never happen again. There are gremlins in your computer that report each of your trades so the market can go the other way.  You have missed the point.  Don't worry be happy.

How many people think they have trade all the time with no plan or purpose?  Do you think they get anything more done than the cricket?

How many people worry about the wrong thing when trading.  They try to get the cheapest commission instead of paying attention to the net or focusing on the trade itself.  Don't let yourself be distracted by things that are not important.

Just because someone else is running around yelling the sky is falling is no reason for you to join in.  The key for the successful trader is the one that has a plan, follows their plan & keeps their ego out of the way.  In the end it is quite simple.

I was definitely waiting the RIMM earnings announcement and in true form the stock performed as we needed for volatility. The stock had a 20 to 25 point drop after the announcement which proved highly profitable for our paper trades. We learned a key factor when trading straddles and strangles. If you were watching WTV you would have noticed that there were straddles for OCT, NOV, and DEC. With the front month volatility we obtained much higher profits on our front month straddles although the NOV and DEC options were still profitable. Sometimes these strategies require more time for the stocks to move which would cause us to purchase options a month out. Two months or more such as the DEC options are priced so high due to time value that we obtain lower profits.

Be sure and watch me this earnings season on In The Money and Greek Speak to discuss all the stocks i am watching for straddles and strangles. All of the stocks start this week and end the announcements the first week of November.

If you are new to the market and would like to learn more about options or sign up for a free trial to our Stocks, Options, Forex, or Commodities software go to www.WizetradeForGroups.com. If you would like to watch me discuss these great trading opportunities live on the air go to www.WizetradeForGroups.com and click on the video to watch live coverage or sign up for the free trial on our television network.

Diane Sullivan

Wizetrade For Groups

www.WizetradeForGroups.com

800.304.8881 ext. 22435

Many times we will not wait for the trade to come to us & pay the price with a loss.  Patience is the key to success