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Portfolio Management | Trading Profit. Trading Performance must be managed at 2 levels: Portfolio and Trade specific. Portfolio measures: Profit/Start of Year Cash Balance = 146/380 = up +75.62%. Profit/Net Liquidating Value = 146/527 = +48.23%. Key Trade Performance Metrics: Win/Loss Probability = 38/42 = 90.48%. 38/4 = 9 Wins per 1 Loss. Average Win/Average Loss = 03/9 = .09 Won per Loss. Performance Ratio = (Win/Loss Probability) x (Average Win/Average Loss) = 90.48% x .09 = 2.80. Positive Expectancy = 51 per trade. NO trade adjustments needed. For more, visit: www.homeoptionstrading.com

Trading Performance must be managed at 2 levels: Portfolio and Trade specific. Portfolio Measure: Profit/Start of Year Cash Balance = 334/000 = UP 101%. Key Performance Metrics … Win/Loss Probability = 51/61 = 83.61%. Average Win/Average Loss = 92/4 = .04 Won per Loss. Performance Ratio = (Win/Loss Probability) x (Average Win/Average Loss) = 83.61% x .04 = 1.71. Positive Expectancy = (Win Probability x Average Win) – (Loss Probability x Average Loss) = (83.61% x 92) – (16.39% x 4) = 5 per trade. NO trade adjustments needed. For more, visit: www.homeoptionstrading.com

OptionSIZZLE.com Research in Motion (RIMM) issued Q4 2010 Earnings after the market close on March 31, 2010. Even though (RIMM) raised Q1 guidance above analyst’s estimates, option activity going into earnings was showing a bearish to neutral bias reaction into this event. Typically trying to “game” earnings is a losers game. The reason it is, is because you do not know how the reaction of the earnings will be taken by the market. However, when I can see a bias in the option market with big traders buying calls, puts or selling, I can set up a trade using options that will reduce my risk and will give the the highest probability of success or what I call my “edge”. In the video below I show you what we were seeing going into Research in Motion’s earnings.

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For the uninitiated, Point and Figure charting is the only charting method that analyzes price without the noise of time. The noise amplification of time in other forms of charting Candlesticks, Heikin Ashi and OHLC is visually disruptive as you try to reconcile the conflicting patterns between daily, minute, weekly and monthly charts. This visual confusion is removed with Point and Figure charts. Some retail training firms like to popularize the myth that, “Everyone looks at these Candlestick patterns/Elliot Waves in charts”. They are partly right. Though, their use of the term “Everyone” applies to retail off-the-floor traders who collectively only make up ~ 15% at most, in some cases even less, of the total traded volume on exchanges, depending on which exchange it is. Which raises the question: What are the eyes of those on the floor moving 80+% of traded volume looking at? Price and PRICE ALONE. With truck loads of calls and puts to hedge, floor traders could care less how many times during the day, price touched the tail of a dragon fly doji. They’ve already pre-planned to get more of; or, offload their inventory of calls/puts at a specific strike, for a given price. As a retail option trader, trading less than 10 contracts per trade, you are not exempt from tuning your eyes to focus only on price. How do you simulate the observation of price alone from off-the-floor, if you remove the use of Candlesticks, OHLC Bars and Heikin-Ashi charts? Use Point & Figure charts …

Trading Performance must be managed at 2 levels: Portfolio and Trade specific. Portfolio Measure: Profit/Start of Year Cash Balance = 814/000 = UP 47%. Key Performance Metrics … Win/Loss Probability = 35/49 = 71.43%. Average Win/Average Loss = 5/6 = .96 Won per Loss. Performance Ratio = (Win/Loss Probability) x (Average Win/Average Loss) = 71.43% x .96 = 1.40. Positive Expectancy = (Win Probability x Average Win) – (Loss Probability x Average Loss) = (71.43% x 5) – (28.57% x 6) = 6 per trade. NO trade adjustments needed. For more: www.homeoptionstrading.com

June 2009 Tradig Profit is UP +100%. Portfolio Management | Trading Profit. Trading Performance must be managed at 2 levels: Portfolio and Trade specific. Portfolio Measures: Profit/Start of Year Cash Balance = 426/380 = up +100%. Profit/Net Liquidating Value = 426/1845 = +57.37%. Key Trade Performance Metrics: Win/Loss Probability = 46/49 = 93.88%. 46/3 = 15 Wins per 1 Loss. Average Win/Average Loss = 03/0 = .61 Won per Loss. Performance Ratio = (Win/Loss Probability) x (Average Win/Average Loss) = 93.88% x .61 = 2.45.Positive Expectancy = 92 per trade. For more, visit: www.homeoptionstrading.com

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A simple options trading strategy, the bear call spread is a high probability, low risk trade that offers healthy profit margins and versatile trading strategy. If you’re just starting out in options, be sure to take a look and learn this option trading strategy for yourself. For more tips and option trading strategies like this one, be sure to check out www.tamingthemarkets.com

Return: Profit/Start of Year Cash Balance = 593/380 = UP 157% for December 2009. Key Performance Metrics … Win/Loss Probability = 60/68 = 88.24%. Average Win/Average Loss = 98/4 = .99 Won per Loss. Performance Ratio = (Win/Loss Probability) x (Average Win/Average Loss) = 88.24% x .99 = 2.64. Positive Expectancy = (Win Probability x Average Win) – (Loss Probability x Average Loss) = (88.24% x 98) – (11.76% x 4) = 47 per trade. For more, see: www