Options Trading Exit Strategy and Money Management...


Option Trading Tutorials. A really great way to learn options trading is through option trading tutorials. I found as I was learning to trade options that watching a trade get set up, entered, managed and reviewed was a great help to my learning to trade.

Option Robot and Automated Binary are the best ones that we can recommend.

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The Warrior Trading Inner Circle is the most private and exclusive trader group that trades with Ross, Jeff, Mike and other highly successful traders in person to nearly guarantee their success.

I am very impressed with both educational content and regular market updates of TUG. Option synthetics and Risk Management are key for successful options trading. Understanding options synthetics and practical application of option synthetics are two completely different things. You can find the best ever explanation for practical application of option synthetics at TUG.

Hal is worth every dollar spent and then some. Alone the videos are worth a ton and the way Hal explains things is phenomenal. Many things he talks about in his Pre-Market sessions can be applied not only to US, but also European markets.

I am renewing my membership in his group for the 4th year because as a retail trader, he is simply the best teacher out there. He calls the markets with acumen, is very personable, fun and professional. He is fluid in stocks, options and futures, with an expert grasp on trading, from the simple and binary, to complex and time sensitive strategies.

Hal is a great trader who is generous in sharing experience in the market. Bottom line, he helps his group make money. Hi, Hal I must let you know I am indeed grateful for all the works you and your team have done to offer the TUG service and all the brilliant videos and Secret Trader Sessions. I am a just-retired person and doing Option Trades has been my planned post retirement past time as well as the means of regular income.

Though I have attended quite some option classes in Hong Kong, they only served to puzzle me and made m. Best money spent trying to learn the Market. Only been a member for a couple of months, But ROI has been great. Like a good Poker player, Keeps a straight face and ups the ante when the cards are in his favor.

There are a lot of smart people that can tell you what's going to happen in the future. Hal deals with the current situation. I am new to TUG. I am learning more through this teaching than I have anywhere else. Thank you for your investment in those of us who are just starting. Hal I find your free informational videos very educational and would suggest this to any starting options trader as a well defined starting point.

We routinely discuss in our meetings and emails what new things we are learning from you that no one else out there seems to tell us, and these are very important topics. The trader user group training videos are excellent. Best I have seen in 4 years of trading options.

The teaching is clear and easy to follow. Lots of vivid examples.. A key part of the leaning is the platform examples Hal explains for every strategy discussed Best value out there. I have been a TUG member for a year now and during that time have learned more about trading and more importantly about capital preservation than I ever learned during years of trading or from other mentors, some of whom were much more expensive than TUG.

Hal seems to almost love teaching as much as he does trading. He makes his points clearly and concisely but he is always patient and really takes interest in his students. In trading we are always wanting the best return on capital and TUG memb. I am a retired investment banker with extensive experience in stocks, bonds, mortgage finance and corporate finance.

After taking courses from some of the nationally known providers, I fortuitously stumbled upon TUG on the internet. I sampled a few a la carte courses and sat in on one PMT, and I signed up for full membership just a. Just wanted to shoot you a quick e-mail to say thanks …. Joining TUG and having access to all the material Hal Brent makes available on his site is the best investment I have ever made in improving my trading expertise. The TUG site is by far the best, most valuable, most fun, and most worthwhile of all previous expenditures, without question.

Hal is a wonderful exemplar of combining macro and technical analysis with very focussed and well thought through option strategies. Some of the nuances on the strategies in particular diagonals are really useful and I admit ones which I had not thought of. Although I am a new member I will definitely be a long term subscriber.

The ability to view replays of premarket sessions and education series and skype group contact is great. I was a conservative buy and hold equity investor who followed all the standard acceptable investment rules yet my account was decimated by the dot.

Hal has provided me an education of practical and immediately usable information which has helped me avoid a number of mistakes and has made me a better investor. I have been able to apply his methods to both my k account and to now a trading account.

The TUG group provides a plethora of new in. I have recently joined the TUG user group, the skype group, and the pre market group.

Hal's knowledge and skill are evident but most importantly to me are his willingness and "ability" to teach. In my 30 years of trading experience I have found that just because a person is a good trader doesn't automatically qualify him as a good teacher. Hal, I believe, possesses both qualities. In addition I have found the quality and content of the website to be superb! I look forward to years of working wit.

I would highly recommend his investment services to anyone looking to take their trading and net worth to the next level.

I enjoy a lot being in the TUG it is a honor for me being part of this community you have created, the 2 decades of experience you have is a valuable present for all of us,. The group offers a great place to interact with others serious about optimizing opportunities and growing their skill sets.

Fortunately, Hal is a great mentor and offers a vast array of knowledge. He shares openly in a warm and welcoming manor. I have only been a member for a short time but I am already exceptionally pleased that this experience has exceeded expectations and enlightened my trader-mind. Hal is the real deal. He has such a global view of where everything is sitting and how it is all intertwined. He gives great support and resistance levels to watch for during the day so we can get an idea of where the market is heading.

To be more precise, you need three different types of strategy. Below is an introduction to each. There are two main reasons for having a trading strategy and sticking to it.

The first is that it removes the possibility of you making emotional or irrational decisions. Instead, decisions are based on pre-defined parameters that are developed with clear thinking. The second reason for having a trading strategy is that it makes it possible to benefit from repetition.

Even if you did, it would be hard to repeat it. In other words, a trading strategy ensures your trades are based on clear and logical thinking while also ensuring there is a pattern that can be repeated, analyzed, tweaked, and adjusted. For example, you can analyze your strategy after a set number of trades or a set time period. Is it making you money? Is it making you enough money? Maybe it is making you money but not as much as you hoped.

In this situation you may decide to let it continue knowing it will be profitable in the long term. Or you might decide to make carefully considered and structured changes to improve profitability. This is all possible, but only if you have a trading strategy in the first place. The alternative is haphazard and impossible to optimize.

Imagine you looked at your performance after a set number of trades or a set period of time but did not have a trading strategy to judge it against. What would you do if you lost money? All you could really do is hope you make better decisions in the future. However, you would have nothing concrete to base your adjustments on. The same applies if you were making money but not as much as you had hoped.

In fact, the same also applies if you did make money — you would have no way of knowing for sure that you could replicate the performance again, as each transaction is a standalone trade and is not part of an overall strategy. It is a completely impractical way of trading.

In the scenario, you make a 50 percent profit one month and then a 50 percent loss the next month. How would you know what to change, if anything? The best you can probably hope for is break even, and that is no use to anyone. In reality, you will probably lose money because you have to win more than you lose. Without a trading strategy, that is almost impossible. Many people make the mistake of only developing a trading strategy — i.

Little thought is given to the money management strategy. That is a mistake because a money management strategy will help you manage your balance so you can get through bad patches and maximize winning streaks.

Because of this they invest 10 percent of their balance on a single trade. If that trade loses, they will need a 20 percent gain on their account balance just to break even. If they lose three trades in a row, they will need a 30 percent gain on their account balance just to break even. You can see how this can easily creep up — a common losing streak of three in a row could see the account balance of that trader drop by 30 percent.

When you consider the fact that many losing streaks are much longer than three-in-a-row, you will appreciate how important a money management strategy is. Without one, your account balance is at risk of hitting zero, even if you have a good trading strategy in place. Losing streaks and unprofitable trades are a part of life, so you must have a strategy in place that deals with these inevitabilities.

This means managing your money to maximize profits , limit losses, and, crucially, get back to a profitable position after a bad patch. There is no such thing as the holy grail of binary options trading strategies. Markets change, and every successful trader constantly works to improve, update, enhance, and make better. Even traders with many years of experience and large profits in their bank accounts still work hard to analyze and improve how they trade. It applies even more to new traders and those with minimal experience.

An analysis and improvement strategy gives you a structured way of maximizing the good parts of your trading and money management strategies while simultaneously fixing or removing the parts of your strategies that are not working. This helps you become more profitable in the long term, and it helps you adjust to changing market conditions. Without an analysis and improvement strategy, you will plod along. If you have good strategies in place you might make money, but nothing is guaranteed.

In addition, you might not be making as much money as you could. Why leave these profits behind when there is a way of getting them? That way is through analysis and improvement. The precise strategy can vary on each step, so there are a huge number of possibilities. The most important part of developing a successful strategy is understanding as much as possible about each element.

This will be covered in the next section, starting with the creation of signals. A signal is basically an indication that the price of an asset is about to move in a particular direction. Of course, prices of assets move all the time. What you need is something that predicts that move before it happens. That is what a signal does. There are two ways that signals are created. The first is to use news events, and the second is to use technical analysis.

Generating signals from news events is probably the most common approach, particularly for new or inexperienced binary options traders. It involves looking at what is happening in the news, such as an announcement by a company, an industry announcement , and the release of government inflation figures.

In many simple cases, positive news means prices are likely to rise while negative news is likely to lead to a fall in prices. The starting point for making this strategy work is knowing what news events to expect and when. This is why you will find economic calendars on most good binary options trading platforms.

The best platforms will also tell you what to expect from the news event. You can then make decisions in advance of the report in an attempt to predict its contents and the subsequent market movements. You can also make decisions after it is published based on market expectations and reactions. There are positives to a news events approach to trading.

In particular, it is easy to understand and learn. There are disadvantages to the approach too. The biggest problem is unpredictable markets. For example, a company might release an earnings statement that shows an increase in profits.

This is a positive news event that you would expect on first reading to cause the market to react positively. However, within the report there might be additional information that spooks the market, such as profits not being as high as expected. This could mean the market moves less than you anticipated and, in some cases, can even move in the wrong direction — prices falling even though the news event is categorized as positive.

It is also difficult to predict how long a movement will last and how far it will go. These questions are unknowns. Trading based on technical analysis offers an alternative. It is a strategy that seeks to predict the movement of asset prices regardless of what is happening in the wider market.

Essentially, the process involves looking at how the price of a particular asset moved in the past. From this, it is possible to establish patterns that can be used to predict price movements in the future.

It sounds complicated, but our brains are used to doing this on a daily basis. A good example is when you meet a new person. If that person greets you warmly, you are likely to predict positive things for the relationship. On the other hand, if the person is standoffish or unfriendly, you might anticipate difficulties in the relationship.

You come to these conclusions based on your experiences in the past of meeting people and forming relationships. Technical analysis does something similar. It looks at the current conditions of an asset and decides, based on past experience, if the price will remain largely unchanged or if it will rise or fall.

Once you get into the technical concepts and terms, it does, of course, get a bit more complicated. However, the overall concept is the same as the day-to-day task of making a prediction on future outcomes based on past events.

Now for the big question — should you use a news event approach to trading or a technical analysis approach? This comes down to a number of factors, and the answer will be different for everyone. The best advice is to try both to see which you are most comfortable with and which generates the most profits. Of course, you are probably not in a position to test strategies with your hard-earned money. Luckily there is another option — using a demo account.

Most of the reputable binary options trading platforms on the market offer a demo account facility. This allows you to trade binary options with virtual money rather than real money. What you can do is test strategies and trading styles without any risk. One final point to remember when looking at signals and strategies is to focus on the short-term. There are investment strategies that aim to predict the price movement of an asset over a long period of time, such as 10 years.

This type of information is of no use in binary options trading. Instead, you need to know if a price is going to move over the next couple of minutes, the next hour, the next day. This is essentially a money management strategy. They vary in complexity and level of success, starting with a strategy that involves investing the same amount on each trade. Two other common strategies are the Martingale strategy and the percentage-based strategy. For long term success, the latter is the best option.

Investing the same amount of money on each trade is just like having no strategy at all. It is the riskiest strategy, as it does not take into account either your overall level of profitability or the amount of money you have in your account. Both of these are essential factors, and ignoring them can result in quickly depleted balances.

The core concept of the Martingale strategy is to recover losses as soon as possible. This means investing larger amounts of money in trades following a losing trade.

For example, you could have a set value of money that you trade, which you then double when you have a loss. If that trade wins, then you are back in profit again rather than being somewhere around break even. Problems with this strategy occur when you go on a losing streak with multiple losing trades in a row.

Each losing trade in a Martingale strategy involves an increase in the investment on the following trade. This quickly adds up. For example, imagine you went on a trade losing streak. That is a lot, but it is not an unrealistic or unreasonable situation. On a trade losing streak, your 11th trade would have to be 1, times the value of your original trade in order to stay with the Martingale system. There are not many budgets that could withstand that sort of increase, even if the value of the original trade was low.

The question comes down to how accurate your predictions are and whether you can prevent or minimize losing streaks. It is always important to remember that nothing in binary options trading is a sure thing.

Even trades that you are certain will be successful can end up as losses. Losing streaks are inevitable, regardless of how good a trader you are. It is simply impossible to be right enough times to prevent them. Therefore, for most people, a Martingale money management system is a risky option.

A percentage-based system is less risky, so it is usually the preferred choice for most traders, particularly those who are new to binary options trading. The concept is fairly simple — the amount invested on a trade is based on your account balance.

If you lose a trade, your account balance will fall, so the amount of money invested on the next trade decreases. If, on the other hand, you win a trade, the amount of money invested on the next trade increases because your account balance has increased.

The question then comes down to what percentage of your balance do you want to invest. This is a strategy that helps you only invest an amount that you can afford. It is a strategy that lets you increase your profits while also protecting your account balance during difficult periods and losing streaks.

One of the best ways to improve your trading strategy is to analyze your performance using a diary. This is a simple but highly effective concept. It involves keeping a diary where you note down every trade that you make. This is a particularly effective approach if you are a new trader and are still trying to establish a profitable strategy.

A common approach in this scenario is to place trades using both technical analysis signals and news events signals. A diary will help you keep those trades separate so you can judge which performed better. For example, you might find you are getting double the profits from trades you make based on technical analysis.