Grasshopper Page

While I wait patiently for the market to hit a bottom to continue trading, I added another page to Main Street beats Wall Street. This page is for beginners. I call it Grasshopper. It’s located in the main menu bar. I included the new page below.

The market is taking another beating today. The futures were down in the pre-market as a result of oil taking a big dip. And the market has been down since the opening. If oil wasn’t down, Wall Street would find another excuse for the down day. Maybe the market is down every day because the world is a mess! Put your seat belts on! It could get rough!

Grasshopper

Grasshopper, you are a beginner! Be very careful! You must learn to defend yourself. When entering this new arena you cannot run. I am lying a fine film of rice paper on the smooth road of education. Once you get through enough education to get started, this road will soon become rough terrain covered with ups & downs and many potholes. If you run recklessly through the education segment of your young career I guarantee you will rip the rice paper to shreds. In order to be successful you must negotiate your way down the smooth rice paper covered road without ripping the rice paper. If you do, you must go back and continue your studying until you completely understand all pages of the “Educational” section of this blog. How will you rip the rice paper? By doing things you’re not ready to do. You must not sell Call Options until you completely understand what an option is. Don’t even think about buying options. You must understand Intrinsic Value, Time Value and Time Decay. You must understand ALL pages listed under “Educational.” Do not only study from “Main Street beats Wall Street.” There are many ways to get educated. Computer search, books, financial TV shows, get bent on education! Once you know the material well, try some paper trading. I know it’s boring! If you want to have some skin in the game, buy 100 shares of stock at a time and sell 1 contract of the Covered Call Options. 1 contract is 100 shares. Develop a strategy. You might take some loses. Thats OK! It’s better to take a lose trading 100 shares than trading 1000 shares. It’s all part of your education.

Once you start trading, do not think about how much you are making. Think about the rate of return on your investment. If you buy 100 shares of stock and sell 1 contract of the Call Option and bring in a 1% premium in 1 week, It’s the same rate of return as buying 1000 shares and selling 10 contracts and making 1%. Yes, you will make more money trading 1000 shares but it’s all about the rate of return. Do not look at the amount I’m trading or anyone else. I’ve been in this game a long time. You must move at your own pace. It you do this correctly, with discipline, you will make a lot of money in your life time. This is not a get rich quick scheme. This is slow and steady, steady and slow.

While you’re educating yourself make sure you read all Pages under “Philosophy, Strategy and Risk” located in the main menu bar. In this section you will find the page on “Rate of Return.” To get there hit the link Rate of return.

As you work your way down the rice paper email me any questions. I’m here to help.

Steve

The Options Coach