Happy Friday, Evolvers!
Yesterday, we saw a consolidation day in the major indexes as traders digested Wednesday’s massive surge to the upside.
The huge market boost followed uncharacteristically dovish comments from Federal Reserve Chairman Jerome Powell during his speech at the Brookings Institute.
After four months of consecutive 75-basis point hikes, the market has been looking for a signal that the Fed will begin slowing down.
And it got that signal on Wednesday…
The big underline was the following … Powell said, “the time for moderating the pace of rate increases may come as soon as the December meeting.”
He couldn’t have been much clearer than that, and the market responded with unbridled enthusiasm, sending the S&P 500 ETF Trust (NYSEARCA: SPY) up as much as 3% intraday.
That said, we’re getting mixed signals …
The SPY is now teetering around an incredibly strong resistance level at $410. (Notice that yesterday, the SPY topped out at $410.00 … to the cent!)
Now, the question is this … are we seeing a bull trap, or the beginning of another big leg up into the year’s end?
After such a big move up, how the SPY reacts next week will be crucial to bet on future direction.
But for now, it’s Friday … so it’s time for our Q&A!
Keep reading to see my answers to your burning questions…
“What’s the least amount of capital I can start trading with? I don’t have much money but I want to open a small account to trade options!”
I hesitate to give you a minimum value because I’ve seen traders who’ve turned $50, $100, and $500 into thousands, tens of thousands, and millions (respectively).
That said, those are outlier cases. For most newbie traders, I think $500-$1000 is the sweet spot for a starting account value.
With $1000, you can make ten $100 bets…
And with my options-trading blueprint, you only have to be successful on a handful of trades to make exponential gains.
Are you familiar with this trading “loophole?”
Are you familiar with the “loophole” that helps small accounts grow exponentially?
No, it doesn’t have anything to do with penny stocks or crypto…
And this strategy works regardless of whether the markets are up OR down…
This little-known options “loophole” is something you can use to grow your trading account right now…
Why is this the case? Because of the power of options contracts…
(If you wanna see all the juicy details of my tried-and-true strategy, check out my brand-new ebook by clicking right here!)
Bottom line: If you’re trying to grow a small account — options trading is the fastest way to do so.
Of course, you must be cautious. Let your winners ride and cut every loss immediately…
Why? Because It’s not atypical for weekly options contracts to move 100%+ in a single day.
If your position is up 100%, you can sell half of your contracts (and hold the rest) to make the remainder of the trade risk-free.
For trades that aren’t going your way, limit your downside to 10%-15% of the initial position. If the trade goes south beyond 10%, dump it!
By following these rules religiously, you can eliminate much of the stress and concern around trading options with a small account.
And no one understands this concept better than my top student, Jenny Smith!
She’s a shining example of how you can potentially take a modest account and grow it into a small fortune using the power of options trading.
Click here to read about Jenny’s INCREDIBLE trading journey!
“What’s the most difficult aspect of being a professional trader?”
I think the hardest part of trading is combating your emotions.
We’re human, so being emotional is part of the package…
But human emotion is an experienced trader’s worst enemy.
It’s also the reason that 90% of traders FAIL!
As a trader, you have to strike a counterintuitive balance between reading the sentiment of the market (which can require some degree of emotional intelligence) and being completely emotionless (when deciding what the best move is for your positions).
This can be tough for me. I’m stubborn and always want to nail my trades to the absolute maximum…
But in the past, this mentality has caused me to take some regrettable losses.
I’m always trying to find the middle ground between hitting a home run and avoiding greed (which can ruin an otherwise excellent trade).
My best advice is this…
When you’re trading, focus on your technical analysis, your price targets, and your overall goals.
And the moment you start to notice your pesky human emotions creeping into your mindset … tell them to take a hike!
Have a great weekend, Evolvers!
With such momentous price action over the past few days, we’re setting up for even more fireworks next week.
Study hard so you’re ready to go as soon as the market opens on Monday!