How, when and what to play?
Welcome to the biggest dilemmas for a trader. What to buy and at what price? The battle is not over though if those two pieces are figured. The next big question is when to sell and how much loss risk should be carried to meet the profit objectives?
Fascinating questions, all of these are. Yet, even for a ninja trader it is no fun to just be immersed in the uncertainty of every trade during every waking hour of their lives.
This is exactly where PROFITMONK algorithms score. Let the power of maths take over and model the best possible answers to each of these questions. A typical infographic from PROFITMONK looks like the picture below.
This tells you that you may consider to invest in the call option for stock "FFIV", at strike price of $145 and expiry of 20th July, 2018 (180720 in option detail) as a possible buy for close to $9.28 on Jan 24th, 2018. There is data in the table about what is a good sell target ($23.2) and stop loss for this call option ($0.46). The last two columns have details of the status of the trade. The sell target for this trade was met on May 3rd, 2018.
So, now you have another decision to make. How much to invest in this particular idea? That depends upon, how much of your portfolio do you want to put towards a particular strategy? To make profits out of this strategy, you should divide the total portfolio by 25, and that should be your maximum investment in one trade. Now, do keep in mind that options can only be bought in multiples of 100. So, if you decide to buy the call option in the info-graphic above, it would cost you about 400 dollars for one contract. For more contracts that you decide to buy, the cost would be a multiple of 400.
Now to the final act. You have done the due diligence and have decided how much to invest in one trade. The only thing left now is to create a disciplined trading routine. This may look like the info graphic below. It is also good to never forget the old adage..
Greed destroys portfolios and discipline makes them.