By Gavin McMaster
The idea that for this ebook got here after a full of life training consultation the place i used to be actually peppered with questions for over an hour. while reflecting at the consultation afterwards, it dawned on me that the majority scholars ask an identical or related questions. they prefer to select my mind and so much are trying to find distinctive solutions on sure suggestions or issues, however it is the little guidance and tips that regularly give you the such a lot “aha” moments.
These little nuggets take purely 2 mins to provide an explanation for yet may have an important effect in your buying and selling effects. I’ve prepare 37 of those nuggets which are innate to me after 10 years of buying and selling yet would possibly not have crossed your mind.
This ebook should still merely take an hour or to learn, yet i believe you will discover it worth the time.
I desire you benefit from the book.
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Additional info for 37 Quickfire Lesson In Trading Options: 10 Years of Trading Experience Compacted Into Easy to Digest Lessons
24. Divergence Is A Powerful Indicator Divergence is something that I frequently look for in my trading. The premise is that when a new high or low in a security is not confirmed by an indicator (I prefer RSI and slow stochastics), it indicates a potential trend reversal. For example, a bullish divergence occurs when the price makes a LOWER low, but the indicator makes a HIGHER low. This shows that the downside momentum is slowing, even though prices are continuing to make new lows, and a trend reversal may be imminent.
If interest rates go up, option prices will go up due to the new higher cost of carry. 2. Pay Attention To Greek Ratios Now that you know how important the Greeks are in options trading, you should start monitoring them on every trade. Each option strategy will have different Greek characteristics. For example, one on my bread and butter trades is a 30 day iron condor on RUT. Usually I set my short strikes around delta 10. Without even looking, I know that my delta will be roughly neutral, my vega will be around -400, and my theta will be around +100.
Let’s say you have a delta neutral iron condor, and the market starts dropping. Your delta is getting out of line, so you adjust and bring it back to delta neutral. Now, as soon as you’ve adjusted, the market turns right back around and starts rallying again. By adjusting and getting back to delta neutral, you have effectively locked in a loss, and now the market is moving back against you the other way. It’s important not to let a position get out of control, and you need to adhere to solid risk management principles, but sometimes you need the market to move against your position before it will start coming back your way.
37 Quickfire Lesson In Trading Options: 10 Years of Trading Experience Compacted Into Easy to Digest Lessons by Gavin McMaster