OPTIONS SWING TRADING

BY RUFUS

This website was created for friends and family to share ideas and so that i don't have to repeat myself to each of them. Having been trading Stocks, Futures, Forex, and options since October 2008, Many friends call/text me asking questions so I decided to centralize everything in one place.

Covid-19 in 2020 created an infusion of new traders entering the markets including my friends like never before, i found myself getting many calls/texts from friends/family and acquaintances and just about everyone in the world that at some point knew of me or just my name all asking "Hey Rufus, do you still trade? I have a question"

OST was made to make information more accessible and redundant for those mentioned above. The information here is my opinion which is derived from my experience in trading and having spent so many years watching the markets, losing money, making money, reading countless books and charts, my style was forged out of it.

While this website is NOT FOR THE PUBLIC per say. The public is more than welcome to view it, good traders trade, good writers write, good sellers sell. With that mentioned keep in mind i am trader if you haven't already guessed and this is what i do for living, meaning don't expect spelling or grammar to be perfect, this website is NOT intended to sell you or impress you with its writing or sales skills. Simply focus on what its made for. Knowledge compilation.


Relevant accomplishments and achievements

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    Masters in securities analysis and portfolio management (CFA curriculum) at Creighton University
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    Bachelors of finance (CSUSB), Minor in Psychology
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    Associates in Mathematics and Science
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    Trading the financial markets since 2008
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    Ex Professional Video gamer
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    Two times chess champion
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    Professional Swimmer and soccer player
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    Strictly technical analysis & options
FRIENDS AND FAMILY ONLY
TRADING IS LIKE DRIVING

I always say either learn how to drive the car or bring me the car to drive. But don't hang in the middle and call me asking do i turn here? do i stop? do i go? this is the equivalent of those questions like "what you think of this stock?, should i buy? should i sell? Basically the useless question always generates a useless answer

Three categories of friends i have
CATEGORY ONE:
The first, the ones that want to learn, These are my favorites, We speak often, even though i might be doing most of the teaching, i am also learning by teaching and it makes good progress on both sides, it also keeps the trading game not so lonely, they might have different styles, different risk attitude, but they understand or begin to that its like the gym, we can work out together even though our exercises can be different. Most importantly they understand IT TAKES TIME, time of their own committed not time us speaking.

Our talking is usually and specially for those starting out ( in knowledge, not in trading, you been buying and selling stocks doesn't mean you know what your doing) is no more than a text or two where i tell them read this read that and they spend hours doing it and check with me weekly. NO i do NOT charge these friends neither do i have interest in doing so because again i am learning too and chatting with these friends is joyful since they are active learners and pursuers of education plus they are my friends.

NO, you can NOT offer to pay me either to teach you, because trading is a thing you learn, a teacher can only guide you, its precisely like working out, no matter how much time you spend with the personal trainer, nothing is achieved until your doing the workout your self. Plus i didn't become a trader to teach for living, i became a trader and spent decades to trade, no amount of money can change that from true traders, no matter how much they have they keep doing what they like, that's why the biggest and the biggest traders and money managers and hedge funds keep doing what they are doing; Trading, Because its a life style, a passion, a profession an undying hobby most spend 5-10 years just to learn it let aside apply it. Thus those that truly want to learn have usually read everything on my site and many other sites and gained knowledge and education and continue to do so hence why we talk often to constantly keep growing. So those that want to learn do so regardless of their account size and those that don't simply don't, how much money they have is irrelevant and UNRELATED, i talk to everyone that's truly and actively learning because its a conversation of where the common denominators is intellectuals, not so much poor or rich.

CATEGORY TWO:
Second tier of friends are those that understand the above and know themselves and the fact that this simply just takes time, there is no shortcuts and there is no quick get rich. They are also busy with their day to day job or activities and lifestyle. Thus they do the second best thing which is have their accounts get the same trades as me, They basically shadow my trades. Unlike the gym, while your personal trainer can NOT workout for you or exercise on your behalf.

When it comes to money, you can open an account with TD Ameritrade and just have it following/tagging my account. Meaning the same trades I put for myself automatically go into your account. These friends are smart people because they don't discount the field and they value what most don't value which is their time , they understand and appreciate the knowledge that traders have and they listen to what i tell them which is that even if they were to trade for themselves, the time they spend away from their primary activity to earn a living might make it to the point where what they earn in trading is less than MINIMUM WAGE.

Yes i seen it all the time, a friend calls me said i been watching and buying selling this stock for 4 months and i made 5k and they so excited to share it with me. Since they my friends i usually know what they earn and i tell them, you know you just earned waaaaaay less than you do have you spent that time in your daily job than watching the stock or whatever the hell they "invested in" even if its the super newly minted BUTTCOIN that they believe is going to the moon. It takes them a minute but they usually get it. Remember trading is NOT learning. Don't confuse the category of buying and selling and watching a stock and reading your favorites website articles (lol) about it with you learning how to trade, manage risk, structure trade, etc etc 
CATEGORY THREE:
 It is The third and worse category, omg, these are my friends that call me and say oh, what you think of this stock? my barber or my relative is been talking about it, or worse i know a friend who put S**T load of money into it, WOW, they think just because someone they know or don't know put lots of money into it meaning its a good investment. LOLZ, just look at what happened to Bill Ackman in his Herba Life trade. The funniest of this category is they "think" they wanna learn or are learning but its like the person whos unhappy with their weight and they always say ya i wanna change it but never do anything about it. Desire and pursuit are completely different things. Even possessing the knowledge alone is not sufficient. Applying as it is.

These friends and people doing the worse thing they can do when it comes to trading which is they confuse making money or trading for learning, they think because they are buying and selling actively they are getting better, sure maybe that's the case after 5 years if you survived and became category one mentioned above and starting learning, but this is like going to the gym and saying oh i am there everyday, i watch (the market) but yet they are not exercising, They pay entry fee sure and monthly member ship but there are flat out not getting the results or doing the work. The results being the education, not the money, and the work being the learning curve. and again, 99% of the time even if and ONLY IF they are making money its less than they would earn and their primary job having put that same amount of time and focus there. Let aside the mental and emotional stress trading inflicts on an individual, Excitement too, excitement is the most deadly emotion when it comes to trading.

Even worse, when they buy a stock and it goes up they call me and say " should i sell" or they say, no i am goanna hold its goanna go higher, I am reading and watching the news about this company hahaha, as if any one knows, not even Warren Buffet knows where a stock is going, the only thing traders can do is make a plan on what to do if it goes higher or lower. But wait, these aren't traders or investors to being with, they think they are. These are "wanna be" traders. And when the stock is down they call me and say " Should i buy more" do you think its goanna go down more? hahahaha if only this question can be answered in a simple fashion, it would be a miracle. The answer is never that simple and is never understood by those who are not traders any ways,The equivalence of these questions are ridiculous. When people call me and say my friend just made this much in this stock is like saying oh i saw this guy at the gym he is 300 pounds, You don't know if its muscles, or weight, or fat, you don't WTH the 300 means. Unfortunately with money and trading it is not that simple and the analogy is to simplify the answer and give a metaphor that the questions or what you think you know/see/hear is simple is not and no where remotely is.

Usually after months or years, these category of people burn out, emotionally if not financially because the trend and hype ends and wipes out everyone that is uneducated who had been taking blind risk and simply riding a bull market. This is easily predicated just because if you crossed the freeway with your eyes blindfolded and made it across so many times, THERE WILL COME THE TIME you WILL get hit and be knocked out, yes it takes only one hit to wipe you out, if not financially, mentally for sure and emotionally. The is not only an opinion but a fact because those who usually "make money" are only buying stocks and betting on them going upwards. They don't bet on stocks going downwards or even know what short selling is let aside doing or trade or know options, which in my opinion if applied correctly reduce the risk while giving you the same exposure if not more. Just because ones account is large and can afford to go through a big drawdown/loss it does not mean one should go through it. The notion of thinking because the account is large they can "just hold it till it comes back" is easier said than done, As Mike Tyson said, "Everyone has a plan until they get punched"

They mistake the wave they are riding for skills, the mistake making money for learning, its basically like saying oh tomorrow its going to be sunny, but guess what we are in the summer(Bull/rising market), of course its going to be sunny tomorrow, doesn't take a genius to guess it right, and thus they always betting upwards thinking they are the genius, only till the Winter comes (Bear/declining market) then they melt away like a snowflake because whether they realized it or not, stocks don't always go up and the so called "genius" that thought his calls on "its going to be sunny tomorrow" are no longer working And guess what, it doesn't take a too cold of a winter to wipe them out. Because they are usually buying on margin and simply don't have the staying power both psychologically or skillfully to sustain a losing period. Specially when they saw that their barber or relative is still doing what they do for living, cutting hair hahahaha even worse, when the wifey starts noticing your mood swings and keeps telling you quit the gambling your doing (and she is right) or when the trash is piling up because you didn't take out the dumpster on trash day because you were "watching" your stock decline with a vein about to pop off hoping it recovers hahahahahaha

These people (the ones i know) are still my friends and we still talk trading and in general and make fun of each other, i am always blunt in letting them know where they at and to stop what they are doing and quit while they are ahead or start learning, of which many are even while some are in this category the very same person can be in category 2 and opens a separate account that follows mine to keep what they got, reduce the risk, see the trades i do and learn. It is my goal to help them not lose the money they made and transition them to learning, the category difference doesn't change the fact we are friends :-)

FRIENDS AND FAMILY ONLY

STANDARD MONEY MANAGEMENT

You get 75% of the profit, i get 25%. This is pretty much the world wide standard for money management

50/50 TRADING

Split the profits or losses down the middle, we both keep 50% of THE gains and LOSSES

100% NO RISK TRADING
(500K LIMIT)

You only keep 25% of profits, but I assume all THE RISK AND losses (IF ANY) and will REIMBURSE them. 
I will always recommend that you learn for yourself but naturally this isn't for every one and not all of us have a knack for numbers or desire to do so, and some are simply more successful or busy in other fields that they recognize the need to have their account handled by those who are equally successful/trusted in the trading/investing field.

For those in CATEGORY TWO that have MORE QUESTIONS. The way it works is you select one of the three risk profile you want, the standard, or the 50/50 or the NO RISK choice. You then open an account with TD Ameritrade and link it to mine so that the same trades are inputted in your account.

ALL ACCOUNTS THAT SHADOW ME are traded in the S&P 500 (SPY ETF). YES ONLY one instrument is what i trade FOR MYSELF and for YOU which is basically what i do and believe is to be the best thing. For more info on how its traded read the article below titled "BUY AND HOLD ON STEROIDS" and "Why the S&P all time high is different"

ONCE AGAIN AND YES There will be NO buying of this or that or crypto or some newly hyped stock or even some of the biggest names like Apple, GE, or whatever, it will be STRCITLY in the SPY etf which tracks the S&P 500. Because i myself do NOT trade other items or put a large percentage of my own funds into anything else besides the SPY, thus why would i put you into it. If i don't trust my own funds to be traded in something else besides the SPY obviously the best thing i can do for you is the same i do for myself. End of the day the goal is to earn a profit for all of us thus what's traded is truly not too relevant. SAFETY AND PROTECTING our capital is first goal. Thus dont expect miracles results or doubles and triples. The goal is consistent growth while managing risk and draw downs to a minimum

To know more on the whys read the articles below. AND NO you can not call me or text me and say buy this or that stock in my account, i am not your broker and this isn't the 80s, you can place the trade yourself. If you want to trade on your own separately from my trades no problem but do that in a separate account from the one that's linked to mine that i am managing for you which will be EXCLUSIVELY traded in the S&P 500


This option is ONLY for close friends and family, REASON being is that unlike you might think, its me ME TRUSTING YOU with my money, NOT THE OTHER WAY AROUND, you might be trusting my skills and knowledge but its MY MONEY that's landing in your account.

The way that feature is set up through TD Ameritrade is that the trade i put in my account comes into your account also. Thus being that its YOUR account under YOUR NAME, and YOUR CONTROL, When i am owed my performance fee (my cut) whether it be the 25% or the 50% or the 75% depending on which risk profile you chose that money lands INSIDE YOUR ACCOUNT.

MY CUT LANDS IN your account and you have to pay it to me. The cut off is done QUARTERLY. The reimbursement for losses if any is done upon ACCOUNT TERMINATION because a drawdown is not a final loss. Specially in the S&P 500 Which always recovers in the long run. As far as taxes for the amounts paid to me it simply gets to be on a 1099 so your not gonna pay taxes on the portion of the gains that you paid me

More reading and my thoughts and notes that i make to myself and talk to my friends and family about

Stock market thoughts, explanations, trading styles, and my personal brain dump. Read these as they will answer a lot of questions you may have. More articles coming soon.