Posted in
Education
By: Tom Gentile
on April 7th, 2022
Read the first part to this series here.
Skill #2 Matching Winning Strategies with Winning Systems
It requires more than a winning system to be a winning trader.
Many systems are simply too volatile for the average trader. That’s where options come in. Options can be a key ingredient to winning in the world of trading.
Take Alphabet, (formerly known as Google), for instance. Can you imagine trading this stock on a regular basis? It could cost you a bundle, even with a great system.
In a case like this, trading options can be a great alternative to stock trading strategies.
Trading Options Instead of the Underlying Stock
This approach could bring both a lower cost and a lower associated risk.
Price is but just one benefit to trading options. The time element is also important, along with recognizing the best option to buy in terms of time value.
Professional Options Traders also look at volatility. Knowing when an option is expensive or cheap can lean the odds of success greatly in your favor.
KEY TIP: Use an Options Analysis Software
Using an options analysis software such as my online/internet-based software www.tomsoptiontools.com can help you determine not only the price and time of options to buy, but also whether the options in question are expensive, low cost or priced fairly.
www.tomsoptiontools.com can also scan the markets for trades that fir your trading system, and also help you select appropriate trading strategies and better manage your trades.
Also consider my app Toms Option Tools. It has lists found by clicking the icon Morning Reports. These lists show options based on a variety of characteristics.
Here are a couple of examples:
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
Disclaimers
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
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