"What do you think about the markets here?"
That's a question I often receive. My typical response,
I don't care
. Okay, that may be a bit harsh, but it is true. For the most part
I really don't care about the daily news that flows in and out of
the market. I am an options trader. I trade strategies based off
probabilities. I create statistical advantages based on my current
We must realize that knowing what is going on in the news and
knowing how to make money consistently are two separate things. For
successful options investors it's about your strategy, your logic,
your process, it doesn't matter what you think the market is going
to do tomorrow. I realize it's a difficult concept for the options
newbie to understand.
You see, it doesn't pay for me to try and absorb every financial
story out there. All I care about is when my indicators hit
extremes. I allow probabilities, not the talking heads, to define
my options strategies.
And this means that the strategy enters periods of stagnation.
Trades should never be forced. A forced trade is not a
statistically sound trade. Again, this market apathy is a long-term
approach to options trading and should be expected if you wish to
bring in profits over the long-term.
Boring? Maybe to the aggressive crowd out there. But, I am more
interested in the profitable trades - not trying to be the
short-term hero who trades every scenario out there. I am confident
trades that consist of short-term extremes that have entered the
stock market - high-probability trades.
What is a high probability trade?
The High-Probability strategy is a short-term directional strategy
that utilizes single calls and puts based on overbought/oversold
extremes in the market. The strategy requires patience coupled with
a disciplined approach. The strategy consists of approximately 2 to
5 trades a month with holding periods of 1 to 10 days, however;
there will be some months when I make no trades..
Again, the key to this strategy is patience. Waiting for the
appropriate scenario to trade with a high probability of success is
what makes this strategy a success. As I always say,
opportunities are made up easier than losses. So if you let a few
pass you by don't dwell on what could have been. There will always
be more opportunities around the corner. Remember, trading is a
marathon not a sprint.
What Indicators Do I Use to Successfully Trade the
I learned early on to keep it simple. Pick a few indicators and
follow them forever. I can't tell you how many traders that I know
that want to follow bull flags, bear flags, candlestick
patterns, Fibonacci retracements - the list goes on and on. They
will try and teach you about their long list of indicators to make
themselves look impressive, but in reality most are horrible
traders and unsuccessful over the long-term.
Why rely on the barometric pressure, gulf stream speed, humidity,
ocean temperature and astrological temperament to tell the weather
when you can just look out your window?
The High-Probability strategy uses a few basic RSI models plus my
proprietary model to take advantage of sentiment and technical
If you're interested in learning more about my options strategy and
the indicator I use,
click here to sign up for a risk free trial to
, my service dedicated to making safe reliable gains with options.
Chief Options Strategist
Wyatt Investment Research