New Book – Swing Trading with Options

It’s not a secret that many enter the options world because they are undercapitalized and want to get rich quickly. No one wants to get rich slowly by averaging 8% a year. The only way to get rich by making 8% a year is if you are already rich.

Options trading can be very challenging. Developing traders are attracted by the leverage options offer, and professionals love the ability to manage risk in a more precise way. Options are not the magic solution to any problem under the sun. They will magnify your trading weaknesses. If you are a lousy, impatient trader, options will help you lose your money quicker. If you know how to pick stocks, size your positions properly, and time your market exposure, options can help you boost your returns significantly.

In this book, you will learn:

  • How to use momentum to find stocks that can go up 30% to 100% in 3 to 6 months. When to enter and when to exit those stocks. Which options strategies to choose to ride those powerful trends and potentially achieve 500% to 2000% returns.
  • Why options can be a superior risk management tool and how to use them to enhance your returns in momentum stocks.
  • How to size your option positions so you don’t blow up your account.
  • How to use weekly options for swing trading. When to use options for swing trades and how much to risk. When to buy them and when to sell them.
  • How to handle the mental side of trading and become consistently profitable.
  • How to manage your overall market exposure and create a plan you can actually follow.

This is an easy-to-read and easy-to-understand guide filled with practical examples, market wisdom, and hundreds of annotated stocks and options charts. There are no complicated and sophisticated options strategies. Everything is as simple as possible. I hope you will enjoy it and find it extremely useful and maybe, even eye-opening.

If you read and liked one of my previous books, you will absolutely enjoy this one. With that in mind, I like to keep expectations reasonable:

If you expect complex multi-leg non-directional options strategies and a magic recipe, this book is not for you. Don’t waste your money. More importantly, don’t waste your time.

But if you want to learn how to consistently pick stocks with great upside or downside potential, how to express your bullishness or bearishness via simple call or put options, what type of options to buy – what duration, what strike, when to buy them and when to sell them, how to manage risk and achieve superior returns, then this practical guidance might be what you have been looking for.

Every time I write a book, I always promise myself that it will be the last one. It takes so much time and effort, but then I realize how much I actually learn while sharing my thoughts and experience in an easy-to-absorb manner.

As always, I benefited tremendously from the whole process of writing this options book – the research, the charting, the thinking, the reviewing of my options trades and journal have been an invaluable experience. I am a better and more profitable market speculator because of it. I am confident it can help your trading process and returns, too.

TABLE OF CONTENTS

What You Can Learn in This Book.

One – The Power of Options – Pros and Cons.

Two – How to Follow Big Trends with Call Options.

Three – Swing Trading with Call Options.

Four – How to Trade Downtrends with Put Options.

Summary

The book is available in digital and paper format.

Bull Markets Often Correct Through Sector Rotations

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This has been a very weird week of sector rotations – momentum stocks pulled back while capital rushed into old-economy sectors like finance and laggards like China and emerging markets.

Last week also brought quite a few failed breakouts and a decrease in the number of good risk-to-reward setups, which is very strange when the S&P 500 is at all-time highs. I am either looking at the wrong stocks or the market is getting weaker under the surface – maybe, it is a little bit of both.

We have seen this exact scenario play out too many times this year. It doesn’t mean that the bull market is over. It’s just another reminder that bull markets are low-correlation markets of stocks and everything looks easier in hindsight than it is in real time.

Small-caps represented by Russell 2000 (IWM) underperformed notably last week, but as long as they hold above 168, there’s nothing to fuss about from a macro perspective.

Don’t forget to check out my new book: Swing Trading with Options – How to trade big trends for big profits. It’s also available in a paper format.

Momentum Monday – Climbing the Chinese Wall of Worry

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Markets tend to overreact to known threats. Chinese stocks have been under severe pressure for the past six months. Most of them had a 30-50% correction. The big question this week is how much of the tariff talk has already been discounted. We are likely to find out soon. Technical bottoms are often formed when a beaten-down sector rallies on bad news.

In the meantime, U.S. stocks continue to lead the world financial markets. All major U.S. stock indexes are currently consolidating in a range. Small caps and large-cap tech stocks’ momentum seem to be losing steam, so there are no reasons to be overly aggressive on the long side right now.

On Momentum Monday, we cover QQQ, FXI, AAPL, GOOGL, ECHO, IYT, among others.

BTW, I just released a new book: Swing Trading with Options – How to trade big trends for big profits. It’s available digitally and on paper (it features more than 100 annotated colored charts on big 8×10″ format).

Keep an Eye on MOMO

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The owner of Tinder, MTCH has been on a tear ever since it crushed earnings estimates on August 7th. Almost 50% of its float was short at the time, which certainly contributed to the quick price appreciation in the past month. I wrote about the potential for a short squeeze here.

Now, the so-called “Tinder of China”, MOMO might offer a similar opportunity. MOMO had a 40% correction this summer along with many other Chinese stocks. It the past few weeks, it has managed to recover above its 50-day moving average, where it is setting up again. If it manages to break out above $48, it has a good chance to test its all-time high near $55. A lot will depend on how the U.S. – China trade negotiations go.

Momentum Monday – Still A Market of Stocks

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While Chinese stocks are in a crash mode, we continue to see strength in the U.S. stock market. Last week’s pullback in momentum names seems like another normal pullback within a bull market. They say that bull markets correct through sector rotation. This is exactly what we might be seeing currently in the market as the transportation sector broke out today. There are some many truckers clearing long bases: ECHO, ARCB, XPO, etc.

The cannabis craze has revitalized the interest in many biotechs. Today, we saw a major breakout in a large-cap stock like AMGN. Institutions are looking for a side door to participate in the growth of the cannabis industry and stocks like AMGN and TPB are perking up.

We also took a look at NDAQ, CMG, MCD, SBUX, AVAV, ROKU, etc.