Becoming a professional trader overnight is highly unlikely.
It takes hard work, studying, trading, and practicing good risk management before you can get an edge to actually profit in the markets.
But if you’re like me, you have very little time for your normal 9-5 job and routine without having to devote another 12 hours to the markets.
Which is why a passive income trading strategy is far superior to a hands-on scalping strategy for me
You see, I need additional income from the stock market to grow my net worth like a great piece of investment property.
I don’t have the time or ability to trade non stop like many day traders do who are chasing momentum in tech stocks.
And that’s why I created and leverage the Options Profit Planner system to streamline my research and get down to business without the bs!
Now, if you’re ready to take the leap and learn how I can generate 100% returns for my trading business …
Fractal Energy Controls Every Stock
Fractal Energy is a force to be reckoned with.
It’s a beautiful mathematical formula that explains the patterns found throughout nature, from the pattern of a pinecone to the length of the beaches.
These patterns can also be applied to the stock market and trading to find stocks that are both ready for a trend or about to consolidate or reverse direction
But first – What are fractals?
The power of fractals allows me to determine the strength of trends and how much “life” is remaining in a stock’s movement.
There are 2 main components of Fractal Energy:
- Markets Fractal Pattern
- The Internal Energy
But first, what are Bollinger Bands and how are these applied to Fractal Energy to identify the signals I need to trade credit spreads on
Bollinger Bands act as a price envelope designed to define the upper and lower price range levels of a stock.
Bollinger Band Indicator consists of a middle Simple Moving Average (SMA) along with an upper and lower offset band. Because the distance between the bands is based on statistics, such as a standard deviation, they adjust to volatility swings in the underlying price.
How do you read them?
Bollinger Bands help to determine whether prices are high or low on a relative basis, and according to these calculations, price should fall within range 95% of the time!
Just take a look at how the Fractal Energy combined with Bollinger Bands was able to determine the tops of the markets in the SPY’s right as they made all time highs earlier this month
When the Fractal Energy was depleted and totally exhausted with the SPYs trading above the upper Bollinger Band, it meant one thing… the markets were heading lower!
And that’s exactly what the SPYs did in the weeks ahead
But you see, this can also be applied directly to the stocks you trade as well.
In this chart you can see that Fractal Energy and Bollinger Bands predicted both directions of the TSLA move
How would you trade this lower?
With the use of a Credit Call Spread trading strategy to put the house odds in my favor
And what does this mean for today?
Well as we continue to monitor both the Bollinger Bands and the Fractal Energy, we can see that there’s a buy signal coming up soon.
As the Fractal Energy continues to charge up and the Bollinger Bands climb higher (or the stock sells off a little further) then we will see a buy setup in both the SPYs, TSLA, and other tech stocks that have been hit hard for possibly another huge trading opportunity
So…how would I take advantage of this move?
I would make sure to use a Credit Put Spread to capture the move higher.
But first…what are credit spreads.
Credit Spreads Stock The Odds In Our Favor
Option sellers take maximum advantage of the option time decay theory, commonly known as Theta Decay.
OTM options lose value quickly and become worthless at expiration.
Now what do one of these strategies look like?
I know this might look scary, but it’s a lot more simple that you might think.
In order to create this strategy, you would want to sell a higher valued put, and buy the lower valued put as protection.
What does this give you?
It allows you to collect a net credit on the trade, which is the difference between the two puts.
But why do I like this trade?
Well, when you properly select your strikes, you can generate odds of winning that mimic the likes of a casino.
Plus when you generate income from collecting premium, you can steadily return close to 100% returns each and every trade.
Remember traders, there are many ways to make money in this market and selling options is one of my absolute favorite go-to strategies.
- Credit Spreads can profit if the stock goes down, stays the same, or goes up depending on a Call or Put Spread
- Limited risk compared to Naked Puts and Naked Calls
- Puts the house odds in your favor compared to buying Options or Stocks
- Allows you to get paid to take risk unlike stocks
And you see, when it comes to placing a trade, you need these 4 things
- To have the stock selected
- A price range identified
- An indicator to show you strength of the stock
- And an options strategy to tie it all together.
When it comes to placing a trade, I always make sure there’s an edge by leveraging the power of the internal energy of a stock and pattern.
And I always make sure that I utilize a strategy of selling options or spreads to focus on generating a steady flow of income for my trading business.
But what’s extremely important to remember is that there is a strategy for both going long and short stocks that are available to you.
Plus Credit Spreads give unique advantages to traders over debit spreads, with the most important being that you are paid upfront to place a trade!