Okay, so I got the signals, now what?
It is a list of assets, with three data for each:
Time the signals was generated (when you got the signal)
The price of the asset when the signal was generated
The asset trend – up or down, Put or Call.
So, if you see in the signals this line
-C-, Gold, Call, 1691.0
And you know that the signals was sent at 15:28 GMT, you know that we indicate that the trade on golde that will expire at 18:30 GMT will be above 1691.0.
That mean that you need to enter an option trade that will be expire on 18:30, and that your entry price will be equal or below 1691.0
You see in the signals this line
-D-, Oil, Put, 96.530
And you know that the signals was sent at 15:28 GMT,
You need to enter an option trade on oil that will be expire on 18:30, and that your entry price will be equal or above 96.530
3 Rules For An Option Trader
1) Manage your risk
2) Price and direction
Manage Your Risk
Your first risk management step is understanding potential losses.
How much are you willing to lose?
What will you do when you lose again and again?
Options trading have very high financial risk. You should trade options not because this is an “easy money” but because you have good strategy for high risk trading.
If you’re trading without a strategy, and “play it by ear”, you might as well go and play the roulette. You will have the same odds.
If you think that you do have a strategy, for example our SMS signals, then you need to start calculate your risks.
This is how it’s done:
Let’s say that you are willing to risk (remember – chances to lose) $1,000. Your first question is how much should I trade in each trade.
The typical answer will be between 4% to 8% of that sum.
Here’s how you get to this number:
Ask yourself “how many times can I lose money, and still continue the trading?”
We have run the simulation many thousands of times, and in 10% of the simulations, we had 12 consecutive losses. That mean that if you had traded $80 each trade (8%) you could have still continue trading the 13th trade
In 1% of the simulations, we had 25 consecutive losses. That mean that if you had traded $40 each trade (4%) you could continue the trading for the 26th trade.
So, this could be your strategy:
1) No bonuses
2) Be willing to lose X amount of money
3) Trade according to the SMS Signals
4) Each trade will be only 5% of your money
5) Continue the trading
Price and Direction
A typical signal will look like this:
A list of assets, with direction and price.
The asset “AUD/USD” have the value of 1.0458, and the direction of “call”.
That means that our algorithms indicate that the AUD/USD will be, three hour ahead from the time of the signals, above 1.0458.
When you turn to your trading platform, you have to make sure that the price that you enter the trade on will be below or equal to the price we mentioned – 1.0458, in this example.
Of course, if the signals indicates “Put”, it means that we point toward the prices to be below, and that you need to enter trades on above or equal to the signal quotation.
This is the only way you can benefit from the price and direction – remember this!
One of the reasons that we send our signals by sms is that you will have a clear indication on when the signals was created (and sent).
That is because our signals are 3 hours signals. That means that we indicate what would be three hours ahead.
If the signals was sent at 15:17 GMT, your trades would end at 18:17 (or 18:20) GMT.
Now, let’s say that it took you 25 minuet to get into the trade with the right price and direction. That means that you will not set the clock to “three hours ahead”, but to 2:35 hour ahead.
In other words, the signals expiry time is calculated from the time it was sent, not from the time you placed your trade.
This is the only way you can benefit from the time frame – remember this!
(p.s. – just remember to split the trades and never to risk too much)