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Tackle Today: How to Improve Your Directional Trading

December 30, 2022

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«4 Tips to Survive this Manic Market.»


Volatile markets reveal the weak points of directional trading systems. You can use this information to your advantage by adapting your rules or complementing your directional betting with strategies better equipped to handle the wicked whipsaw.

The last week is illustrative. We’ve seen big down days followed by big up days and vice versa. Large intraday swings haven’t made things any easier. This is the type of environment that make everyone look foolish – especially those building trades that need follow-through. We’re talking strategies like long/short stock, calls, puts, and debit spreads.

If these are your bread and butter, consider the following tips to better weather the chop.

  1. Be highly selective with bull trades while the trend of the S&P 500 is down. Chasing new longs into strength has been a money loser of late.
  2. Use cheap bear options strategies that don’t require a stop loss. This allows you to give the market room to maneuver and time to descend to your target.
  3. Scale in and out. Entering and exiting multiple times allows you to use the adverse moves to your advantage.
  4. Embrace the higher probability nature of strategies like naked puts, credit spreads, flies, and condors, and you won’t worry as much about the day-to-day swings.
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Video Of The Day: Fundamentals Focus: P/E Ratio Explained

In this Fundamentals Focus clip from the Halftime Report, Coach Greg explains what a P/E ratio is and how traders and investors can use it to better understand the valuation of a company.

Chart of the Day: Russell 2000 (IWM)

Chart of the Day: Russell 2000 (IWM)

IWM reflects the manic market nicely. We’re dying. We’re flying. We gap up, we gap down.

Options Theory Blog

LIFO, FIFO, and Selecting Lots

Today’s video discusses the nuances of Last-In-First-Out (LIFO), First-In-First-Out (FIFO), and how to identify which lots you want to exit when you own multiple shares/contracts purchased at different prices. It should be of particular interest to those who scale in and out of positions and those looking to harvest tax losses properly.

Today’s line up

Traders Lounge 11 AM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

Cash Flow Club Replay

If you missed last night’s webinar where Coach Greg Holmes talked about Markets in 2023 or would like to watch it again, check it out here.

Halftime Report 12:30 PM 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.

Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

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