Protecting Assets – The Key to Success
In the world of trading, one fundamental truth stands out above all else: protecting assets is paramount to achieving success. Once your assets are depleted, the chance of turning a profit dwindles significantly. This principle holds especially true in high probability trading, where losses often outweigh gains by a considerable margin. Many traders fail to grasp this concept fully, but consider this scenario: starting with a $100,000 portfolio, a downturn to $50,000 means that even small wins of 3% on $10,000 (which constitutes 20% of the portfolio) yield just $300 each. It becomes apparent how many consecutive wins are needed to break even, a feat that’s challenging amidst the risk of encountering another substantial loss.
I can relate to the allure of investing, having begun my journey with penny stocks in the 90s. Initially, it seemed effortless—I turned a $500 account into $2,000. However, a single bad trade sent my $2,000 investment spiraling back down to $500, ultimately leading to its demise. This experience forced me to reassess my approach to trading, a common crossroads for many traders.
Today, my trading methodology is vastly different. I’ve transitioned to options trading, forsaking popular strategies like credit spreads, covered calls, iron condors, and others that yielded little success for me. I’ve also abandoned the use of probability in my trades, opting instead for a customized approach with tailored software solutions.
After enduring significant capital losses, I came to realize that safeguarding my assets was the linchpin of successful trading. I learned the hard way that recovering from large losses is exceedingly difficult, prompting me to eliminate all high-risk trades from my arsenal. It simply wasn’t worth the gamble anymore. Learning options trading independently or from educators who advocate risky methods often entails years of trial and error, with numerous losses along the way.
The importance of hedging cannot be overstated. If substantial losses are a recurring theme in your trading journey, consider reevaluating your strategies to prioritize safety. Analyze potential large market moves in both directions and ensure your trades are adequately safeguarded. If all else fails, consider enrolling in our course to learn the methods I’ve spent decades refining. Crafting effective trading systems takes time and dedication, but with the right approach, success is within reach.
At SJ Options, our focus is squarely on safety. Our meticulously hedged methods are designed to weather sudden market downturns while still delivering returns. If you’re ready to trade with greater peace of mind, request a free demo with us—it may just provide the answers you’ve been seeking.
Wishing you the best of luck in your trading endeavors, and remember to enjoy the process of developing a safer approach to trading options.
