Stock Market “Crash”, SPY Puts

Options trading is very, very, very, very, difficult, but also very, very rewarding. Virtually everyone I see trading options has a horrible approach to it, that is very fixable, so stay positive. We all sucked big-time when we started, no one could be worse than I was. Time, hard work, experience, correct focus, honing, staying mentally tough, etc – that’s the ticket. Most people’s approach is not tight, not rigid, not rules-based, not quick to take at least partial profits, not 100% avoiding predicting and guessing when it comes to the actual trading itself. Two days in a row, I was wrong about my immediate outlook, and two days in a row I made money on the trading itself. I DO NOT mix the analysis and the trading. I only look for trade setups, those took years to develop these SPECIFIC trade setups for index options, have no idea if it would work with individual stock options, my guess it won’t. I do not like to short stocks themselves, but very comfortable being long puts, or short calls – in the indexes only. I do my shorting via indexes, but love being long the strong, powerfully trending, angling up, very or very very high RS stocks.

As to setups – I have been very generous to share those setups FOR FREE on the front page. And in much more detail on the other side of the website. A few great, studious, wonderful hard working people have taken advantage of that gift. I know who they are and appreciate the respect that they have shown. Everyone else, who knows. Not my problem. From day one I have had total respect for the good traders and old-timers from whom I learned so much. Two sides to this thing about trying to learn this. No one taught me – I learned it. The business is about learning and sharing from the one side, the experienced trader’s side. But it is also about working very hard from the side of the person trying to learn, showing the respect, if you don’t do that, why should someone try to help. That is how the learner shows the respect to this outstanding business OF TRADING, which has given myself so much freedom in my life. Like the freedom to teach, also the freedom to decide not to teach when that time comes. So many blow hards and smartasses on the other side of this business – the TALKING about trading part of this. The part which they are total failures at – the trading part itself, so then they somehow get people to pay them to teach something they can’t even do. Absurd concept. Social media has made it much worse. Then you have the wonderful side – the actual trading, the traders, 99% of the really good traders, no one will ever hear from them. They do their trading, work very hard with the preparation, reviewing, honing, but they have their private life, away from the stress and nonsense of markets. That actually comes back around to keep someone on course and trading well. I’m heading back there, away from the public comments, eventually myself.

People who try to predict and use fancy systems will ALWAYS be losers in markets. Why? Because they are LAZY. They are too lazy to do the actual hard work required to develop the skills, rules, setups, mindset to be a successful trader. The fancy systems, the predicting, total crutch, does not work but darn easy to implement and accomplish, they can skip right past the grueling process of learning and honing.

Today’s SPY put trade. A lot of the explanation is on the charts, but there is way more detail and nuance to it. That would be for subscribers only. There is the recognition of where, how a setup should occur – the recognition of the technical situation – BEFOREHAND – BEFOREHAND, that is the first chart with the down arrow. Then there is the waiting for, or even if, the setup shows up. Sometimes they don’t show up, so you sit on your butt and do nothing. And yes sometimes watch it do what you believed it would do – tough crap. It’s part of this thing. The huge SOS and the great rally out of the low today. That supp line at 268.54 has been CLEARLY drawn in for subscribers with my SPY chart for weeks, the low was 264.45. Huge rally in the calls out of there. No one but yourself can keep you from being highly prepared. The SPY came right to that supp and a quick spring of it. Yet I did nothing – no setup, but that is never a reason to not be prepared.

Some important areas for intraday trading will only show themselves during the day itself. WHAT IS THE TREND? Do you even know what that means? If not, you are lost. Give up now or work hard and figure it out. And you do not even need to, and won’t, be right all the time with that, I sure as heck am not, but you have to understand where we’re at going in. How can you know which side you should even be on then? It also helps greatly in figuring out when you’re, I’m, wrong. And helps greatly in knowing, or believing you know, what you should not do.

So the put trade stemmed from my recognition, correctly here, that the trend was still down – specifically for the specific option trading specific time frame that is – KNOW YOUR TIME-FRAME SPECIFICALLY – and where to start looking to get in. The “according to me” comment below, just mocking myself, but seriously, I have no idea if I’m right until I pull out some profits, then in that old rear view mirror – yes I’m right. You put down your bet and it works or it doesn’t. Do you know the probabilities of each specific trade you do? Do you even understand what it means, how to do it, why to do it, that you need to, at least have a feel for it? If not, it’s time, as of yesterday, to understand that. It’s a problem that you have, but like stated at the beginning, like EVERYTHING in this trading business – IT IS FIXABLE. So fix it.