LifeStyleTrading is not about making as much money as humanly possible.
It’s about financial freedom — making a comfortable amount so that you don’t necessarily have to commute a long distance every day to work. So that you don’t have to necessarily be settled into one specific location in order to make a living. It’s about a better work-life balance than your typical 9 to 5 job.
In short, it’s about making a small amount consistently week after week from the stock market.
That’s what we teach here.
LifeStyleTraders live the life they want to live and enjoy how they want to enjoy – while making some comfortable side money from the convenience of their mobile phone.
They understand that to make a little money, they don’t need to be geniuses or quant PhDs. They don’t have to be located in a particular financial district or be employed at some hard-to-get job. They don’t have to stare at every tick on their monitor or even understand the complexities of financial news.
They understand that there are many different ways to make money.
LifeStyleTrading happens to be one way to make money that doesn’t require too much effort and allows LifeStyleTraders to live the life they want to live. You won’t hit the lotto with this approach, but you also won’t lose it all — oh, and you wont’ have to deal with office politics or other things that interfere with you living your life.
LifeStyleTrading lets you participate in the enormously huge global financial markets — and helps you get your little piece of the pie. As long as you don’t itch for eating the whole pie (greed), you’ll do fine.
Mobile trading plays a central role in LifeStyleTrading.
Master mobile trading and you will be able to execute trades or check on your status anywhere. You can do so while keeping your day job (if you want). Or you can carry on with the rest of your life — eating dinner, going out for a jog, doing laundry, etc– while still maintaining a pulse on the market.
As long as you have internet connection and are not on some remote island somewhere you can stay connected.
Using free charting services such as investing.com’s app, you can get real-time price quotes and charts right to your phone.
These apps are free and they generally make money from advertising.
What this means for you is you no longer need to have fancy software set up on your computer to get a pulse on the market. Just open the app and rotate your phone into landscsape mode and you’ll see real-time ticks for the market is.
Also – mobile trading goes along with our philosophy of simple > complex. Oftentimes, the desktop trading platforms that your broker provides you is overly complex with all these fancy capabilities.
The way we see it – all these complex tools just give you the false sense that you have all these fancy tools in front of you and therefore you can make a lot of money — that’s not true.
Keep things simple. And keep things mobile – so you can focus on what really matters.
These days, all the top online brokerages have mobile apps that you can use to trade on-the-go. The standard today even includes integration with fingerprint technology so you can set up your phone and login with your fingerprint.
Previously, brokerages including Interactive Brokers would provide you with a 2-sided security card with lots of codes. When you login, it would spit out two numbers and then you would have to match those two numbers with a 3-digit alpha-numeric code for each of the two numbers and enter that before you can log in. And if you somehow lose your connection and get logged out and then want to log back in, you have to do the whole procedure all over again.
Lose your security card? Good luck.
Now, as long as you set up fingerprints on your mobile device, you can also log into your brokerage account with your fingerprint. If you don’t already have fingerprints set up, you should definitely do so. If you have an iPhone, go to Settings -> Touch ID & Passcode, and add fingerprints. You can add multiple fingerprints.
Once you have this connected, then the security code card you have becomes void. Now, even if you have spotty internet connection, each time you log back on can just take seconds, rather than minutes.
Too many traders over-complicate things by looking at exponential moving averages , put/call open interest, analyst research reports, the latest Fed interest rate speculation, earnings reports, bollinger bands, etc..
The key is simplicity. Some of the best traders do best just by focusing on the basics. Complex does not necessarily mean you can make more money.
There’s no need to focus on the news — there are reports on most Thursdays and Fridays at 8:30am EST, Oil inventory figures on Wednesdays @ 10:30am – Fed announcements on some Wednesdays at 2pm/2:15pm — you can speculate all you want — but this is all just noise.
Wave pattern theory assumes all of these announcements are baked into the wave pattern. And some of the best traders have publicly said that their trading got exponentially better when they ignored the news and just focused either on the mathematical probabilities, wave patterns, or risk management.
A perfect example is this SuperTrader woman who started by attending an options trading seminar course with $10,000 — now trades $300 million.
The goal is just one trade per week. No over trading and losing all your money in the bid-ask spread or on commissions. No constant monitoring of every tick in the markets giving you a heart attack. Just one trade a week. Out it in and sit back and relax.
Similar to the fewer trades mentality – we only want to participate in trades that we believe are mathematically around 65% success — and then when combined with our wave pattern analysis, we believe that 65% probability is actually closer to 75% or 80%, sometimes even higher.
Anything that believe is 50% probability we stay away from.
If we already have 90% unrealized gains and there are several days until Friday expiration, we will just go ahead and realize those gains. There’s no point in risking the remaining those 90% unrealized gains just so we can shoot for the 100% — especially when there is some risk that everything can reverse. If we get close to our target profit, we take the gains and move on.
When it comes to trading with options, there are two main components to deal with: intrinsic value (direction) and extrinsic value (time-value).
Yes, we do take advantage of time decay with weekly options. That’s definitely a key part of our strategy — probably 30% impact.
But we also recognize that the direction (delta) plays an even bigger role. In fact, we would estimate that the direction of a stock impacts about 70% of our end result. Whereas time decay/volatility (time value) represents about 30% impact.
So with this 70/30 rough estimate, we have to pay close attention to the direction of the markets — and that’s where wave pattern analysis comes into play.
While it may be difficult to predict exactly where the market will go, Elliott Wave Theory can help us determine where the market WON’T go.
Betting where the market won’t go is a much easier game to win than betting where the market will go.
So we analyze wave patterns and potentials very carefully — not necessarily to predict where the market will go, but to help us to identify where the market won’t go.
When people typically buy and sell stocks — that’s betting where the market will go — betting that something will go up or down. The more it goes up, the more you make. The more it goes down, the more you lose. If it goes nowhere, then nothing happens.
When we bet where the market won’t go, as long as the market doesn’t do higher or lower than a certain point, we make money — usually the maximum amount. This strategy changes the game. We just have to be careful about the risk – which is why we use this strategy in conjunction with Elliott Wave Theory.
We will always trade with defined risk — never open ourselves to the possibility of unlimited risk. We would never short a call or put completely naked. If we short futures, we’ll set a stop loss and announce it clearly in our trade alerts.
We use options to help define our risk – and you can learn some of the risk management options strategies we use including this popular Call Spread strategy we use: