Maybe It’s Time to Scale Back… One Step at a Time

Seasoned traders are doing exceptionally well in these highly volatile times, ratcheting up profits like nobody’s business. They understand risk and have a higher tolerance for market vacillations. Whether they seek further-out expirations or use tighter exits, they are able to navigate today’s turbulent market fluctuations. The issue is that, rather than the economy chugging along organically, the gyrations are self-induced by the current administration. Anticipating the next move is a challenging feat, and we must assess every morning before the opening bell.

If, like most people, you want to exercise more caution, the following suggestion seems to work very well. Trade small, trade often and follow our setups under a carefully mapped-out course for the coming year.

For example, if you would be happy with earning $50,000 a year and have $5,000 to trade, prepare your spreadsheet in a linear fashion, earning only $200 a day. When you use our setups, earning a mere $100 per trade on $5,000 is quite easy and, most often, happens quickly. If an option costs $5 or more, with a delta of 45 or greater and implied volatility of 30% or higher, the movement on that option will be swift. Watch for imminent chart pattern breakouts with weak support or resistance. By that I mean a lack of confluence of key indicators, such as 10, 20 and 50 exponential moving averages, strike prices, pivot points, Fibonacci levels and prior support or resistance levels. The more these indicators converge, the stronger the support or resistance. If they are spread apart, they will not have much influence on holding the price.

As the price prepares to make a run, put in your buy order for a penny or two over the ask price, ensuring you get it when the price pops. When it does, the price will move quickly. On April 16, for example, I bought the SPDR S&P 500 ETF (SPY) 530 puts expiring the following Friday, having about nine days till expiration. I jumped in at 9:58 a.m. with a buy price of $9.59, immediately put it up for sale and got filled in less than a minute with a $0.20 profit. Had I traded only $5,000, that would have procured a profit of $100. Another similar trade would have hit my goal for the day; then I’d come back and do it again tomorrow.

That above-mentioned trade followed our “Out of the Morning Gate” (OMG) trade earlier, in which I earned $0.63 in just four minutes. Those calls cost me $10.42 each. Keeping within my $5,000 trading capital, profit on those four 540 calls would have been $248 net, so I already exceeded my target for the day.

Pulling through just $200 a day should deliver $50,000 per year; not bad at all for what little “work” is required. Of course, as you become more proficient, you will want to increase your capital and soon exceed the annual U.S. average income of $61,984 as of 2024.

There is no shame in scaling back and exercising discipline to know when to stop for the day. In my own trading, I found that when I pushed the envelope with that third or fourth trade, my struggles became all too evident. Trading requires pinpoint entries and knowing when to close your platform and take the dog for a walk. It’s all about scaling back and scoring small daily gains.

These are real examples of trades we made in the Trading Room, witnessed by those who were online. Many traded along with us and reported impressive gains as well.

We have programs for every trader, whether you are a beginner simply looking for a trade signal or full-on training, as provided in our Trading Room. Click the links for details.

The DTS Signal is sent to your cell phone as a text message. Buy it immediately, establish your sell order and collect your rewards. The Signal is enjoying a near-90% success rate.

Our Pick of the Day offers a specific option for purchase at market open. The DTS Signal and Pick of the Day are highly successful services delivering long-term growth.

Our low-cost Inner Circle provides your Morning Market Assessment, daily follow-up report and interactive, informative Wednesday night Meetups. Every trader, novice or experienced, would do well with this program.

Find out more at our Intro to Trading/Week in Review, Sunday night at 8 p.m., ET. Register now.

Create great trades,

Hugh