I hope everyone has fun tonight, and most importantly, stays safe out there.
In case you missed it, yesterday I hosted a live event outlining our MONSTER end-of-year deals and explaining how I plan to have my best trading year EVER in 2020.
The keyword there is plan.
I mean, anyone can just SAY “I want to make a million dollars next year.”
But how do you execute?
How do you go from dream to reality?
Do you think Coach Bill Belichik’s pre-game pep talk to the Patriots is just, “Hey, fellas. I’d really enjoy a win today. I’m… sure you’ll figure it out.”
Of course not – he’s no Marvin Lewis.
Belichick has Super Bowl bling because he does his research and comes up with a blueprint before each and every game. [Insert joke about Deflategate here.]
The First Word? SETUP
One thing I’ve learned in 2019 is that it’s not how MUCH you trade – it’s how WELL you trade.
Or, as they say, it’s quality, not quantity.
I can put on 100 option trades at random, and a few are bound to be winners. But does that mean I’m going to be a profitable trader?
ANY amount of money – a million dollars, a thousand, a fiver – can go to ZERO.
And when you’re just trading fast and furious with reckless abandon, it’s only a matter of time before your account balance dwindles to a goose egg.
Could be months, could be days, could be years.
But it will happen, guys and gals.
That’s why, in 2020, I am not implementing an options trade until the SETUP is right.
We’re all guilty of trading for the sake of trading – maybe it’s that rush we feel hitting SUBMIT, or maybe we have an arbitrary quota we’re meeting.
No matter the reason, it is pointless to put on trades that aren’t giving you an extremely favorable setup.
And in my three primary services – Jason Bond Picks, Smoke Signals, and Weekly Windfalls – I have two ideal setup alerts a piece.
That’s SIX SETUPS I’M STALKING IN 2020 with my Jason Bond All-Access pass.
So, in Jason Bond Picks, I won’t strike unless I see a small-cap stock poised for an explosive move.
In my newest service, Smoke Signals, I’ll be looking for stocks forming bearish chart patterns like the descending triangle, and then attempting to profit from a big swing lower.
Just check out where my Smoke Signals portfolio stands right now!
In Weekly Windfalls, I’ll be on the lookout for the perfect credit spread setups, in an effort to maximize the power of options leverage.
However, it’s not enough just to find the right stock setup… which brings me to the second word of my 2020 map to a million bucks…
The Second Word: PLAN
Ahh, yes – that word again.
The second step in my quest for a banner trading year is having an actual plan for each trade.
I’ve found that one of the costliest mistakes you can make as a trader is having a plan and not sticking to it.
So from here on out, every trade I make will come with a written plan, visible to my paid subscribers.
It will include two things, at minimum:
- Where I plan to take profits
- A stop-loss plan if the trade moves against me
Both of those will depend on the specific stock, my expectations, and what I’m seeing on the charts and elsewhere.
As far as taking profits on options trades, you might start seeing more tiered exits as I try to capture premium on stocks going my way.
Paying myself in pieces, so to speak.
Because I’m no longer going to look for just one specific percentage return on my investments.
As far as jumping ship on losing trades… Feedback from Monday’s webinar suggests most options players have at one point let their losses pile up to 100% (sometimes more, depending on the strategy).
We’re all guilty.
Well, no more, I say.
There are three primary benefits to writing out my plan for each trade. I am:
- Held accountable
- Made to be objective
- Not just trading for the rush of it
By issuing a trading plan from the get-go, I’m now held accountable – it’s in writing.
No more excuses to let winners ride too long, only to take a loss on a trade you were up big on just days (or hours) ago.
Now, if my bull put spread is up 50% to hit my profit target for that trade, there’s nowhere to hide if I don’t take action.
Having a plan on paper also helps me to stay totally objective.
Because think about a time you got REALLY worked up about something… When’s the last time you heard your own heartbeat in your eardrums because your blood was boiling? Or because you were beyond upset?
Unless you’re a saint, odds are you might’ve said or done some things during that time that you regret.
That’s because EMOTION WAS RULING YOU at the moment.
And while I’m all about being in touch with feelings, successful investors trade like serial killers, for the most part.
They don’t trade from a place of fear, greed, ego, depression, anxiety, etc.
Cold and Calculated = Cash.
By having a written blueprint for my trades, I’m removing emotion from the equation so I can make decisions objectively.
And finally, plotting out my trade’s X’s and O’s before I push SUBMIT should act like a backstop to prevent reckless trades.
I’ll discourage myself from putting on a trade that might not have the right setup just yet.
Or, maybe, when I think I’ve found a stock with an excellent setup, going through the planning process could help me see something I didn’t at first – something to turn me off the trade, like an unfavorable implied volatility (IV) backdrop.
With new checks and balances in place, I’m aiming to have an outstanding 2020, guys and gals.