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How Position Sizing Impacts Your Returns

How many times did you hear from traders "I make 50% on most trades, so I can live with few 100% losers"? I guess too many. What those traders don't tell you is what impact those 100% losers have on your overall portfolio. This article discusses why position sizing is key to good and sound risk management. 

Can you double your account every six months?

A while ago I got an email from one of my Seeking Alpha readers. He told me that he is a big fan of my articles and asked how he can learn more. He wanted to make it his new career. He asked me if I can recommend any books or internet sites to learn/practice the options strategies. Then he said that he is new to trading options, he set aside a small amount of money in hopes of doubling it at least yearly.

Are You Ready For The Learning Curve?

The newsletters industry is full of crooks. I see too many "gurus" promise to make you money with no effort, charging thousands of dollars in the process. They present some of the highest risk strategies (like trading weekly options) as "low or no risk". They make a bad name to the whole industry. The Kirk Report is one of the few exceptions.

Risk Reward Vs. Probability Of Profit

How many times did you hear the following claims:

  • "Our system has 90% success ratio".
  • "Our trades have 1 to 4 risk reward".
  • “Always keep your reward to risk ratio greater than 1”
  • “Only take trades with a minimum of a 2:1 reward to risk ratio”
  • “If you aim for more than you risk, then you will make money.”

SodaStream Insider Options Trading: Where is the SEC?

Shares of SodaStream International rose by 25% in intraday trading yesterday on a Bloomberg News report that it is in talks with an investment firm to be taken private in a transaction that would value the Israeli home soda system manufacturer at $40 per share. What would you do if you knew the news are coming ahead of time?

Top 10 Mistakes New Option Traders Make

Option trading is not something you want to do if you just fell off the turnip truck. But when used properly, options allow investors to gain better control over the risks and rewards depending on their forecast for the stock. No matter if your forecast is bullish, bearish or neutral there’s an option strategy that can be profitable if your outlook is correct.

How TSLA Earnings Date Impacted Options Traders

Over the last few years, Tesla used to report earnings during the first week of the second month of the earnings cycle (February, May, August and November). This cycle was expected to be no different. However, yesterday Tesla surprised the trading community and announced that they will report earnings on Thursday, July 31. What does it mean for the options traders?

SteadyOptions 2014 Half Year Report: 95.3% ROI

In the first 6 months of 2014, SteadyOptions produced non-compounded ROI of 95.3% (based on fixed $1,000 allocation per trade). The return on the whole account is 57.2% (based on 10% per trade allocation). We closed 84 trades. Winning ratio was 65% and average return per trade 7%. The biggest loser was 31.8% and only 5 traders have lost more than 20%. We had 6 consecutive winning months in 2014.

All You Need to Know About Auto-Trading

Auto-trading is basically money management, but vast majority of newsletters are not licensed to manage money. Would you give your hard earned money to amateurs? I assume most people would give a negative answer to that question - yet, by participating in an auto-trading service, this is exactly what they do. Is it stupidity or ignorance? You decide.

Are You Prepared For The Next Market Crash?

Financial crises come around every seven years on average. There was the stock market crash of 1987, the emerging market meltdown in the mid-1990s, the popping of the dotcom bubble in 2000-2001 and the collapse of Lehman Brothers in 2008. If history is any guide, the next crisis should be coming along some time soon. 

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