Be Reactive, Not Proactive

Over 17 years of reading, investing, trading and searching for the best approach to profits, I have seen it all. There are the Fundamentals and/or value investing or trading. I have seen Traditional Technical Analysis tools from candlestick patterns to Bollinger Bands. I have seen Science-based approaches, such as the Elliott wave or mathematical and statistical systems. I have even seen black box approaches where you are told when to get in and when to get out through proprietary systems that you’d never know, let alone understand, hidden in the depth of software codes. One thing is true for all of these approaches. They are always “yes, no, maybe-so…” or 50-50 propositions. Even with careful evaluation of each opportunity, it always seem like you are at the mercy of luck or the pressures of the markets.

Most approaches involve the search for value when a stock is down, in the hope that it will come up, or the opposite, to look for bloated stocks that may come down. I have used the Elliott wave to identify short-term corrections against the trend to identify opportunities as the stock reinitiates the trend. Isn’t this like proactively looking for potential opportunities in the land of the fallen, in the hope that they would rise again? After all, we want to “buy low and sell high”, right? Being proactive in this way ignores the winners of the moment, just because we don’t want to buy when they are high in the hope to sell higher.

How about those traders that see a stock jump significantly and decide to wait until the stock declines, at least just a bit, so that they can assure themselves that they did not enter the position at the top of the market? Jim Cramer often says, wait until the stock pulls back a little. Frankly, this requires that you keep a watch list and keep observing the behavior of the stock for a few days or weeks, and very often you lose the opportunity, anyway, as the stock continues to rally in the days following the initial jump. Here you had the opportunity to react to the markets, and you decided to pass.

In essence you proactively looked among the losers for a reversal, and ignore the winners in the hope that they will pull back, instead of reacting to the opportunity when it is obvious, in front of your eyes. We have been conditioned by the buy-low-sell-high crowd. We don’t want to “follow the heard”, and we don’t want to buy options in hot stocks because the options may be expensive due to high implied Volatility. By being Proactive we stay away from the high reward opportunities.

Following the great bull market of the late 90’s, when I made good money trading calls, I have been obsessed with one idea: There must be an options strategy that would provide me with limited risk, maximum hedge and yet give me the potential for unlimited reward using the leverage of options. This strategy would allow me to safely invest large sums of capital, yet allow me to sleep well at night. This strategy would allow me to trade reactively, picking the stocks that are on the move, rather than proactively searching for the ones that might move. The PCCRC is that strategy.

Understanding options Greeks is essential. It is the Greeks that make options tick. Learning to control that Theta, Delta, Vega and to a lesser extent Gamma we can moderate the risk, maximize reward and increase the number of successful trades, and reduce the loss on each losing trade. Knowledge is power, without a doubt, and with the PCCRC knowledge is profit.

Please go through this blog’s articles. If you wish, you can join me in my private blog. I only ask for a token amount of money to cover my costs. However, once you join, we could have access to dozens of video tutorials and to check out a paper trading account, which as returned 65% in less than 9 months. All trades in this account have been PCCRC’s and they are all shown in video tutorials from entry to rollovers to exit.

Why would I do this? Because I am so confident in this system, I really don’t need to make money from teaching it. I already make all I need to live my dream life with my own trading. I do it so that you will Pay it Forward by doing something great and special for 3 other people. I want to generate good will in the World, so you must keep the chain going by asking that the 3 people you help also Pay it Forward.

I hope you’ll join me.!