≈ Learn to use risk graphs ≈
Risk profiles are an important part of any trade. When you build an options trade you should always build the risk profile to more clearly understand the potential reward, risk, and mathematics behind the trade.
Proper use of risk graphs will improve your trading plans, trading decisions and give you more clarity about your trading strategy. They’re very powerful when used correctly.
When trading, the risk graph can be used upon entry but it’s also very helpful to map out the potential performance as your trade develops. They’re incredibly valuable in the right hands, and you should spend some time learning them.
Challenge of the day: spend time studying how to use risk graphs to improve your trading.
Chart of the Day
The Risk Graph
In this risk graph, you can see where the profit zone and loss zone is on a Bull Call spread on AMZN. Using the price slice feature allows you to set simulations at different price points to better understand the potential performance of a trade before you enter it.
Video of the Day
TOS Tutorials: Risk Graph Basics
In this video, Coach Tim goes over the basics of navigating ThinkOrSwim to a trade’s risk graph and how to read said graph.
Today’s Lineup
Options Theory
My Recipe for a Tasty AAPL Put Calendar
I love a trade review as much as anyone. Looking over a trader’s shoulder to see why and when they entered a position is instructive. Watching it through to fruition is even better. How and why did they manage and exit the way they did? Are there tactics that you can apply to your approach that will improve performance?
Women In Trading
Just do it
Hello Tackle Traders! I am excited to be back to bring you another edition of WIT after a few weeks on hiatus. I took a little break to recharge and spend time with my kiddos but I am happy to back here with you lovely folks. Since my mentor Tim challenged me to start writing this blog, I thought it was going to be easy to just share what my trading experience has been throughout the years. It’s easier said than done.
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club Replay
If you missed last night’s episode where Coach Tyler talked about Situational Awareness, and Bear Market Tips or would like to watch it again, check it out here.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
