Why In Your Right Mind Would You Do That?

Everybody wants to tell you where this market is going.

I think we're going up. I think we're going down. The Fed's doing this, earnings are doing that. Every one of them is certain.

So let me ask you a question. Why in your right mind would you go out and start to allocate heavy amounts of capital on any of that?

Look at what this tape is actually doing. Rotations every few days. The index green while most of what's inside it is red. Bounces that feel like the bottom and then aren't. You've got a market that can't agree with itself.

In a tape like this one, the strong opinion is the expensive part. You're not getting paid for being right about direction. You're paying to find out.

So here's what I'd rather do.

Stop thinking and start trading.

Instead of putting real money behind one view, go take cheap shots. Small positions with defined risk scattered all over the marketplace. Some of them bullish. Some bearish. Not one of them big enough to do damage if it doesn't work.

You're not trying to be right about anything. You're trying to trap the marketplace.

Think about how that math works. When the risk is defined and small, you don't need most of them to hit. You need one. One that catches a real move pays for the whole batch, and the ones that miss cost you what you paid, which was never enough to care about.

That's a completely different exercise than taking a directional swing and hoping. The swing has to be right. This doesn't.

And in a market like this one, that's the whole point. I don't need a thesis on the Fed. I don't need to figure out how the rotation resolves. I need the market to do something violent somewhere, and this tape has been doing something violent somewhere just about every week.

Most traders run it the other way around. They wait until they feel sure, then they commit size. And the moment they commit is usually the moment it turns on them, because feeling certain in a market like this one generally means you missed something.

Cheap shots. Both directions. Let the market come to you.

Who gives a crap which way it goes.

That's the approach. But most people screw up the execution.

They size it wrong. They pick setups that look cheap but aren't actually playable. They forget to check the one thing that decides whether the trade even has a chance.

And then they wonder why their "small bets" still manage to hurt.

That's why I built a 60-second checklist. It's the five things you need to look at before putting on any options trade... especially the small directional bets I just described.

Things like the sizing check that keeps a loss from turning into something you can't shake off. The silent cost that bleeds you even when you're right. The one-line test that flags whether the setup is actually tradeable or just looks that way.

It takes a minute. Keeps you out of the setups that quietly kill accounts.

Normally $29.97. Free today.

Grab the 60-Second Pre-Trade Options Checklist here

Who gives a crap which way it goes... as long as you're not stepping on a rake while you wait for it to move.

To your success,
Don Kaufman