We've all heard about learning curves. They exist. They're a part of every new learning experience. Everyone has them, but the length of will vary from trader to trader - based on their individual personality, amount of gray matter, and their resistance to common sense.
In the most extreme example, that is an every day occurrence, traders think they can simply jump into a new trading strategy and be immediately profitable. I'm not talking about the mindless function of initiating a directional trade by buying an option and saying a prayer. All you need for that is a brokerage account, money and the ability to fog up a mirror. I'm talking about a more advanced strategy - the kind that we have used successfully here at the CPTI for years - the non-directional kind.
One's first exposure to the CPTI can be a little daunting. A typical first thought is "An Iron What??" But, the more time you dedicate to reading past columns, the clearer things become.
I recently read how the four components of a learning curve - in whatever we're trying to accomplish or learn - are broken down.
1) Unconscious incompetence (where the trader has no idea how much he doesn't
2) Conscious incompetence (where the trader realizes after initial losses that he
3) Conscious competence (where the trader has developed and is now doing well
4) Unconscious competence (where the trader has mastered the rules and also
When learning a new strategy, new traders are in search of a system that will tell
A new trader's inability to create an exit plan results in confusion and makes it difficult
With a plan, the trader can avoid over thinking the position and ego-based decisions.
Change Is Not Like Minute Rice
Change is not like Minute Rice, it takes time. And, you'll probably lose money along the way. Change takes practice - repetition, over and over again. You must develop discipline, though easier said than done. This repetition develops what is called "muscle memory" - which will make the practiced behavior more comfortable to execute when the time comes. That applies in all areas of your life.
Virtual trading is a great idea. Trade our Iron Condors, or come up with your own. Monitor them. When a problem appears, deal with it - swiftly and decisively. Know when to GTFO. It will ultimately save you tens of thousands of dollars. Now, nothing will replace trading with real money, but virtual trading is the next best thing. Unfortunately, beginning traders do not have the patience and are not willing to do the homework necessary.
The first step is education. Without education, and knowing all aspects of a strategy, you are destined to pay a high cost - paying the market a hefty sum.
The problem with our Iron Condor strategy for newcomers is that, even if you're a few sandwiches short of a picnic, you can replicate posted trades and be profitable most of the times. You just won't know what to do if/when the mierde hits the fan - and it will, sooner or later, regardless of how good we are. It's just a fact of life. It's how you handle it that will make all the difference in the world.
Countdown To San Francisco - June 17/18
Hey Mike -- I almost always laugh when I read your newsletters. I have learned a lot since I sat - so very green - in your class, and learned so much. I have been making a living these last 2 1/2 months trading. Thanks for your continued coaching. I plan to retake your class sometime this summer. Doug B.
Mike -- Just wanted to let you know that one of the things I got the most value out of from class was how to negotiate with the market makers. Based on the extra premium I made on a couple condors this past month, I made almost enough to pay for the class. J.R.
There are a lot more where these came from. It's always a challenge for me when I have a roomful of bright people who are excited and have a passion for learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys, not just the hows. That way, they're prepared for the best and the worst - and know the best way to handle either situation. There are still spots open for San Francisco. Contact me and I'll call you with all the details.
CPTI CURRENT MAY POSITIONS
CPTI May Position #2 - SPX Iron Condor - 1291.24
CPTI May Position #3 - SPX Bull Put Spread - 1291.24
CPTI CURRENT JUNE POSITIONS
On 5/1, we sold 15 June RUT 690 puts and bought 15 June RUT 680 puts for a credit of $.55 ($825). Then, we sold 15 June RUT 830 calls and bought 15 June RUT 840 calls for a credit of $.55 ($825). Our total credit and profit potential is $1.10 ($1,650). Maximum profit range is 690 to 840 (140 points!). We'll be exposed for about seven weeks. Maintenance is $15,000 - IF you have the right broker.
CPTI June Position #2 - SPX Bull Put Spread - 1291.24
On 5/3, we sold 12 June SPX 1230 puts and bought 15 June SPX 1215 puts for a credit of $.60 ($720). Maintenance is $18,000.
Our March SPX Iron Condor position expired worthless - according to plan. We can now officially add the $2,100 of premium to our cash stash - to take us well over the $40,000 mark. We have now generated $40,550 ($38,450 + $2,100).
Current Zero Plus Position: RUT Iron Condor - 742.40
QQQ ITM Strangle - Closed Out Previous QQQ ITM Strangle Position
CPTI SPRING SEMINAR DATE:
Our CPTI seminars are limited to ONLY 25 ATTENDEES. If you're a SERIOUS options trader and you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills, contact me ASAP at email@example.com. I'll call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade -- and you'll have a two-day experience that you'll remember, and profit from, for a lifetime.
The Newark CPTI Seminar was a great success (no surprise, they all are). There are now more enlightened minds, with smiles attached, ready to generate a healthy annual return using our CPTI strategies. Remember, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!
38 OUT OF 41 PROFITABLE MONTHS!!
You should really try and make one of my seminars, if you can. With what you learn, you'll see a substantial increase in your trading results. Contact me at: firstname.lastname@example.org. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?
Couch Potato Trading Institute Disclaimer