This is a trade alert for Fullyinformed members that this morning I did another trade on the Trading For Pennies Strategy. I used the IWM weekly put options to see what the results would be like. The most telling difference is that the weekly IWM puts have small premiums since they expire tomorrow, but it actually made no difference to the trade results. I did 100 put contracts on the morning trade and I have detailed out the steps I took and the end results. Don’t get too fixated on the return results. The return was 51% but this kind of return could become highly addictive resulting in over-trading.
Over-trading a position is one of the worst obstacles an investor can overcome. Once a loss or two is received the investor works to try to “get even”. Don’t “get-even”, get out and take a break. Relax, go for a walk, watch television or check other stocks and options. If you have a great winning trade consider stopping for the day. The IWM trades will always be there for the next day and the day after. Don’t forget, watch the overall trend. The trend remains lower and as such I did puts for my trade. I am not very good at doing calls which is something I will have to work on. But at the same time, puts are much easier because when any stock falls, it falls faster and deeper than a stock that climbs. Therefore buying and selling puts has always worked quite well for me whereas I do not have the same results with calls on IWM.