Created on: 6/4/2012 11:19:14 PM Last Update: 6/9/2012 10:52:36 PM Posted by: RTT
WARNING: This entry is 1602 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
Wyckoff, Super Trader Karen (1795)
Super retail trader Karen turned $100k into $41 million in profits in 5 years. Listen to how she did it.UPDATE1
- Keep it Simple
- Know the big picture
- Watch price and volume, very critical
- Bollinger bands (x2 Standard Deviations)
- Short option premium (selling calls and puts, very risky as has open loss)
- Trade of theta
- Less or no technicals studies
- Does not trade stocks, options only
- Due to such a large account options on only: NASDAQ 100, SP500, Russel 2000
- Non directional plays
- Trading and investing is like learning a craft a education, trading is very difficult
- Stocks are too difficult to pick for the retail investor, unknown news and fundamentals can sink you
- Therefore does not trade stocks (only Indexes), wishes to avoid the 'Earnings Season' risk
- Low drawdowns
- Has a single and simple strategy (one trick to beat the market) which is Wide Index Strangles
- Shorting premium (option writing)
From TastyTrade 24 minutes of magic
COMMENTS: Well done Karen!
NOTE: The video is the only knowledge RTT (readtheticker.com) has of Karen, we have no idea is Karen knows if RTT exists.
To short option premium you need price to stay away from your strike price. Price and volume is important to Karen. Karen doesnt mention the Wyckoff word, but anyone who watches price and volume for reversal action (accumulation or distribution patterns) will become a Wyckoff fan. Wyckoff patterns that would support her approach would be: Selling Climax, Buying Climax, Springs, Tests.
When Karen says she as been tested (Flash Crash), could this success story be different. Maybe or maybe not that would depend on money management.
Karen could not pick direction, this blog suggest she quickly becomes a RTT Plus member to master stock market direction with RTT Market Timer. Our Hurst cycles would also help to pick the next zone for accumulation or distribution to short premium. Please review Wyckoff 2.0 theory.
For example RTTTrendStatus (circle areas) great places to short premium
Click for popup. Clear your browser cache if image is not showing. After a few strange emails.. more information.
When you write a put (short put option premium), you wish for the premium to be over valued. A premium is over values when the VIX is high and this is usually associated with price forming a bottom during a pullback. Therefore to get the best bang for your buck writing put options, you wish to pick bottoms in a up trend.
RTT Plus cover RTT Market Timer. See if you can find the bottom picked by our mechanical timer.
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
..“What beat me was not having the brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favored my play.”..
.."A market is the combined behavior of thousands of people responding to information, misinformation and whim"..
My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.
.."Money can't buy you happiness but it does bring you a more pleasant form of misery"..
..“How many millionaires do you know who have become wealthy by investing in savings accounts?”..
Robert G Allen
We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund