The best traders are consistent in their results in the long run. They crank out profits over the weeks, months and years and make trading into a sustainable business. They make it work. And yes, there are many, many traders out there doing it.
That’s not to say that every one of their trades is profitable. That’s not the point. That’s not the goal. It’s the long run results that matter. As a parallel, imagine a stock ends the year up 26%. If you look left on its chart, you surely won’t find that it was up exactly half a percent every week. It wouldn’t have risen exactly 0.1% a day. It will have had ups and downs. Good days, bad days; good weeks, bad weeks. Hey, maybe even a losing month or two (or three or four) but still overall trended higher and got good long-term results. It works the same with your trades.
Consistent Trading System
My most recent consistent trade is OptionsRaider. That’s the short squeeze trading system I developed over the past year. I spent a great deal of time on this one to get it just right—not to mention make it easy for anyone to use. It’s a system that has produced solid results and should continue to provide trading consistency going forward.
That’s not to say every trade is a winner. They’re not. In fact, to be sure, the system has more losing than winning trades. But the losers are comparatively small and the winners are consistently triple-digit gains. Pure and simple, that math works.
Winning Trading Strategy
It’s never about the trade. It’s about the trading system. The winning trading strategy. We’re not looking for that one big home run to retire off. We’re looking to crank out profits for a long, long time.
Long-term positive trading results can only be achieved if two criteria are met:
- Proven methodology
- Disciplined management
This is not just specific to OptionsRaider—it’s a universal truth in trading. First, we start off with a plan to set up the trade with the best chance of winning for the niche we’re trying to exploit. Then, once the trade is on, we set exit points in such a way that we take winners whenever we can and maximize them for optimal results and take losers when we have to while keeping them small.
For example, with OptionsRaider, our current management strategy is to set a GTC (Good Till Canceled) OCO (One Cancels Other) order to sell half the position at 100% profit and the full position at a 50% loss. Then, on the winners that hit, set a trailing stop on the balance. This has proved to return consistent profits in the long run.
Managing Option Trades
Both of those criteria—proven methodology and disciplined management—are critical. But arguably management matters more. Those of you who attend my free webinars have heard me say (lots of times) “Management Makes Money.” And just because it’s alliterative and catchy doesn’t mean it’s not profound. It is. After setting up the trade to get “Edge”—the other thing you’ve probably heard me talk about a lot—it’s all about the skill level in managing the trade. And that can’t be mood dependent. Consistent results require consistent management actions. And if the management plan in place isn’t producing results, well, that’s valuable information too. You learned what doesn’t work. It’s an opportunity to change one criterion and measure how results change. Run that sequence over and over and you’ll land on a technique that produces results. The only result that matters: consistency.
Dan Passarelli
Founder and Chief Strategist
Market Taker Mentoring, Inc.
