Trade Like a Pro: 15 High-Profit Trading Strategies (Wiley Trading)

288 Pages·2009·8.154 MB·English

by  Noble DraKoln

Trade Like
a Pro
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Trade Like
a Pro
15 High-Profit
Trading Strategies
NOBLE DRAKOLN
~
WILEY
John Wiley & Sons, Inc.
Copyright © 2009 by Noble DraKoln. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data
DraKoln, Noble.
Trade like a pro : 15 high-profit trading strategies I Noble DraKoln.
p. cm. - (Wiley trading series)
Includes index.
ISBN 978-0-470-28735-4 (cloth)
1. Investments. 2. Investment analysis. 3. Financial lisk management.
4. Stockbrokers. I. Title.
HG4521.D698 2009
332.6--dc22
2008036346
Printed in the United States of America.
10 9 8 7 6 5 4 3 2
To my friend, Mike Moone
Altlwugh you're gone, your wisdom and presence are stiUfelt.
Thanks for aU your support when you were here
and the good word
you have been putting in for me in the hereafter.

Contents
Preface xi
Acknowledgments xiii
PART I Designing the Trade t
CHAPTER t From Retail Trader
to Professional Trader 3
Transitioning from Retail Trader to Professional Trader 5
Successful Professional Traders 16
Tightening Up Your Approach to the Markets 22
CHAPTER 2 Markets and Margin 25
Exchanges 27
What Does This Mean for the Market? 34
Daisy Chain Effect 37
Global Markets 42
Becoming a Sophisticated Trader 45
What Do These Changes Mean for
Your Trading? 46
CHAPTER 3 Some Essentials of Trading 47
Three Different Types of Traders 48
A Trader's Focus 52
Essential Trading Concepts 56
Using This Book to Its Fullest Potential 63
vii
CONTENTS
P-\R'I' I( Basic Strategies 65
CHAPTER 4 Holding the Bull and the Bear
by the Tails 67
Straddle, Strangle, and Execution 68
Getting the Right Options for the Job 75
Option Tutorial 78
Sample Straddle and Strangle Write-Up Sheets 89
Conclusion 89
CHAPTER 5 Precision Trading at Its Finest 91
What Is Hedge Trading? 91
Precision Trading Ground Rules 92
Identifying Market Trends 96
Conclusion 101
CHAP1'ER 6 Tl'ading with Hard Stops 103
Stop Loss Order 104
Options as an Alternative to the Stop 106
Conclusion 110
CHAPTER 7 The Markets on a Leash 113
Collar 114
General Collar Pitfalls 122
Day Traders 123
Conclusion 126
CHAPTER 8 Replacing Traditional Options with
Synthetic Options 127
Synthetic Option versus Standard Option 128
When to Use a Synthetic Option 133
Conclusion 141
CHAPTER 9 Everything in Its Season 143
Spread Opportunities 144
Conclusion 151
Contents ix
CHAP'I'ER 10 Gunning for Premiums with Covered
Options 153
Problems with Selling Options 1 54
Covered Option Trading 156
Conclusion 167
CHAPTER 11 Outnanking the Market 169
Frontspreads and Backspreads 170
Trading Backspreads 172
Conclusion 179
PART III Advanced Strategies 18t
CILAPTER 12 Exposing Yourself to Loss 183
Synthetic Futures, Long-Short 183
Primary Drawbacks 188
Intercommodity Spread 188
Primary Drawbacks 193
The Bull Call Spread and Bear Put Spread 193
Primary Drawbacks 195
Conclusion 196
CHAPTEll 13 Advanced Option Selling Strategies 197
Do 90 Percent of Options Expire Worthless? 198
What to Expect When Selling Options 200
Strangles, Straddles, or Naked Options 202
Sell Straddle 203
Sell Strangle 207
Naked Option Selling 212
Conclusion 21 5
CHAP1'ER 14 Retreat, Recovery, Opportunity 217
Manipulating the Strategies 219
Conclusion 242
x
CONTENTS
CHAPTER 15 Analyzing Charts and Strategies 243
S&P 500 244
Euro 246
Gold 249
Corn 251
Oil 253
Conclusion 255
CHAPTER 16 Applying These Strategies
'lUh Stocks 257
Stocks 258
Strategies 261
Conclusion 266
About the Author 267
Index 269