David Jaffee review. Now we're going to go into the secret sauce
it's already one o'clock here and for some reason over the past week
i've had a very congested ear which is kind of weird to sound right
and it makes breathing a little difficult so when i talk a lot it
actually gives me a headache but i'm going to try to get through this
all right
so Emmett says that you'll learn that i say that you'll learn the absolute best
trading strategy in only two to three weeks to
acquire this valuable skill this statement is complete in total hogwash
my thoughts are that you can learn the basics and
the fundamentals of how to be consistently profitable
but a lot of trading has to deal with the nuance
and being able to quickly synthesize information and make a quick and
accurate representation and make a quick and accurate decision
whether you want to execute a trade or whether you want to let that trade go
and something like that is going to take substantially more
than two or three weeks it's gonna potentially take
six to twelve months uh and you can learn how to be profitable on about
ninety percent of your trades but it's really the nuance that
separates those traders who are incredibly
profitable relative to those who just make about 10 or 15 percent a year
yep nuance and it uses that exact word there is a lot of nuance that goes into
the investment strategy so yes i do trade market leaders and no
i don't use the same approach here definitely not and the reason is that
the market primarily trades based upon emotion and supply and demand
and if there are more buyers than sellers then the price is going to go up
and because the market on a long term basis
tends to be rational but short term it can be extremely irrational
i primarily defer to looking solely at price
action to make a determining factor on whether i believe something is a
worthwhile trade with large cap stocks you don't
have to worry about little bits information yes there
is no informational advantage when you're trying to trade apple or
amazon there just isn't you know pretty much everything is
already priced in so there's no reason for you to try to read research reports
or the 10k or the 10q or go to seekingalpha.com it's just
doing that you're just going to end up wasting your time so
because there's no informational advantage it's much more efficient there
are much deeper markets and you're able to fill and execute
trades with a very tight bid-ask spread differential
oftentimes it's only a few cents or maybe five cents at the
maximum you need to focus on the trading range
the underlying stock the volatility index and
identifying underlyings that are overextended in price on a temporary
basis then by selling premium you're able to
profit from the time decay and the fact that the actual move
is almost always less than the expected move so the actual move is almost always
less than the expected move yes this is true i am hyper focused
and i ignore everything else right here yeah this is a huge difference between
unsophisticated investors and sophisticated investors
whereas unsophisticated investors give in to the fear missing out
and they try to chase the rally and then they end up becoming bag holders i will
fade the rally yep this is very important right here
starting from example and actually this is funny with this tesla example
tesla actually went against me by about 70 and i still made money
on that trade it went up from 950 to 1750 i was selling calls and i still
made money and i provided myself with a very large
safety net by selling very far out of the money calls
and i collected a lot of money and profit for doing that
now this trade in tesla was a very good example because
if you traded it too large then you would have been forced to close it out
for a loss but because we traded with a lot of
discipline we didn't trade too large and we also
gave ourselves ample safety net then we were able to make a substantial amount
of money on this trade buying options is for suckers you're not
going to buy insurance on your house and then expect it to actually pay off and
make your money buying options is gambling and you also
have to not only be right directionally but you also have to be right with the
magnitude of the move within a constrained time frame you have
to be right with the magnitude of the move
in the direction that you guess within and prior to the expiration of that
option so buying options is so dangerous
because you have to guess the direction correctly
you also have to be correct with the magnitude of the move
and the move has to take place prior to the expiration
of the option but when you sell options you can still be wrong directionally
and make money yeah in march 2020 i really didn't get hurt that much
i was definitely showing paper losses because
my vertical credit spreads were maxed out at the maximum loss now remember
that's a defined risk trade but thankfully i was very fortunate
where i was not trading naked options there
and the reason i wasn't was because the vix was so low at the time
i believe it was around february 19th the vix was trading at about 11 and a
half or 12 i believe somewhere around there
and i was trading spreads because i thought that there would be
a large volatility pop and i felt that the market was overextended to the
upside so in describing my strategy now this is
extremely simplifying it and everything is about nuance but the
best way to describe my trading is out of an insurance company i basically wait
for overextended moves in the largest companies
then sell out of the money strikes and while i win almost all my trades i
almost i always make sure that if i'm wrong
then i can easily manage the position so here's a it looks like there's a typo
there anyway moving on yeah i'm just
collecting premium and yeah it's all about keeping your
your size small nuance is so important you can replicate
my strategy but you're not going to make the same decisions
my students pay me for the decisions that i make and i make good decisions
and a lot of times people think that as long as they're active then they're
going to make money but that's false if you're active but you make bad
decisions you're going to lose money oftentimes it's much harder to sit on
your hands and do nothing and to resist the urge to not over trade
than it is to actually pull the trigger on a trade that you know
is not the best opportunity available but you just get
really anxious because you haven't made a trade in one or two days
and for those people they really have to do some soul searching because
being active and making bad decisions is going to cost you money and it's also
going to saddle you with a lot of stress and a lot of
unnecessary stress so i think that nuance is incredibly
important in being a successful and profitable trader yeah
this is what everyone always asks me if you make so much money then why do
you sell a course well same reason like why is it 1 14 am
and i'm recording this video for you because
i'm a workaholic i mean i definitely should be sleeping right now and i would
love to be sleeping right now but the fact is it's 1 14 in the morning
and i am making this video for you because i
am a workaholic all right so how did i answer this i said
the money's good yeah i mean it's definitely good and
when you have very violent sell-offs like what happened in march 2020
there's no guarantee that the market's going to rebound and even though march
2020 is probably the most violent sell-off that
we will ever experience in our life where the market fell 36 percent in 33
days still i was showing a paper loss because
my defined risk trades were at max loss and having income coming from students
helped mitigate some of those losses additionally i do see a lot of people
who sell garbage and and for me i was just shocked that
people are willing to pay for garbage so i figured that why don't i actually sell
a good product my time is valuable and my students make
money i am very very careful with my time in fact
if someone emails me and i don't think they're good fit i
turn down students all the time just because if someone's high
maintenance i just don't want to deal with them
i'm not trying to sound like i'm better than anyone no it's just that
your time is your most valuable asset and a lot of people are going to take
from you but they're not going to give you
anything and if they want something from you then
you should be able to set your own rates and you should be able to charge
what you want because even the richest person in the world
is unable to buy back a single second time with all
of the money in the world so time is by far your most valuable asset
and because my students make money it would be really foolish for me
to not charge for it yeah it's true and i guess the final one is i actually
really do enjoy interacting with my students i really do
so wrapping things up i feel like i got to know Emmett
through the course of him asking me a ton of questions
and asking me for documentation and things like that and i feel like
i have a tremendous amount of respect for Emmett for what he does
and i definitely encourage you that if you're interested in being a student
that you reward him for investing the time
in helping people avoid fake gurus and helping
people make solid decisions in who they choose
to learn from so i would highly encourage you to
use his affiliate link if you have interest in enrolling as a student
yeah as i said there's a lot of nuance involved in options trading yet for
those who are committed and they will learn a valuable training strategy that
is consistently profitable so i highly recommend that you enroll
with Emmett and use his affiliate link because he
deserves it
all right