What a Difference a Week Makes in the Market This time last week, things were looking bleak in the market. Bears were in control, and investors were wondering if the end of this bull run was near. It felt like the market could unravel at any moment. The pessimism was palpable. The much anticipated rate cut is finally here. Does this mean we aren’t just moments away from the most important CPI report of our lives? Will the market finally stop watching each job report like our financial future depends on it? Lets not get too far ahead of ourselves. I have lots to cover this week, lets jump in. Fast forward to this week, look at the heatmap from this Friday and last Friday. I posted this to our discord . But if there’s one thing you learn in trading, it’s that the market loves to surprise us. Wednesday things looked pretty rough in the morning, but by the afternoon, the major indexes—SPY, QQQ, and IWM—had formed a strong hammer pattern. That shift sparked a rally that took off like a rocket. With a potential Fed rate cut on the horizon, I want to be bullish, but I’m still cautious. The CME FedWatch tool  shows a 50-50 split between a 0.25% or 0.50% cut. No one knows for sure, my bet is on a conservative 0.25% cut, this strength in the market makes me feel like the market is expecting a cut of 0.50%. Powell has been cautious with his easing so far, and though the labor market looks weak, a smaller more conservative approach fits his style in my opinion. The market is pricing in perfection. That makes me cautious here. Of course we can rip higher, so small swings make sense to me. Yet, despite the bullish market setup, there's one thing that makes me pause: gold. It’s hitting all-time highs too. If you’ve been following my newsletters, you’ll know how much I value technical analysis. Remember the doji pattern I highlighted last week? It’s playing out perfectly. If you played this doji congratulations my friend! So where do we go from here? That’s what I’ll be diving into today as I review the major indexes, upcoming dividends, and economic news for the upcoming. But before I jump into the weekly breakdown, I need to let you in on something important. What You’re Missing Out On: Mr. Money Maxwell’s Inner Circle If you’re not a member of my Inner Circle yet, now’s the time to consider joining . It’s no secret I built my wealth in the stock market. I’m sharing personal insights and even trade ideas for balancing wealth-building with active trading are reserved for the Inner Circle. These are the techniques that have given me the freedom I enjoy today, and I want to help you achieve the same. I also give trade ideas for you to consider. Some of them are bangers! For just $99.99 a year, you’ll gain full access to everything I’ve learned in nearly three decades of trading. But don’t wait too long—this offer won’t last forever. You’re missing out on the insights my members are already using to transform their trading. Ready to level up? You also get access to my dividend watchlists. Don’t just take my word for it: Quote for Thought: "The way I see it, day traders considered themselves successful if they bought a stock at $10 and sold it at $11, bought it back the next week at $24 and sold it at $25, and bought it a week later at $39, and sold at $40. If you can’t see the flaw in this—that the trader made $3 in a stock that appreciated by $30—you probably shouldn’t read this book." — Howard Marks     SPY:  Bullish doesn’t quite describe this week’s powerful candle, we’re .5% off all time highs. I see people saying is this a triple top. My only concern here is if the market is getting to far ahead of itself rate cut wise. What’s the risk to reward here. We have an election, we have possible recession talk, the market is pricing in perfection. QQQ: Tech has experienced a bit of a sell off but had a nice rebound this week. We’re really close to breaking the trendline (especially if you don’t use the wicks). Just like I mentioned with SPY the market is pricing in perfection. IWM:  What I hope to see if the small caps benefit from this rate cut. It’s been a tough go, and the downward trend line is obvious. Lets look for another pop after the cut. I know it’s too obvious almost. GLD:  this is the biggest concern I think stock bulls should pay attention to. Gold is a flight to safety. It’s where people go when a recession is coming. I’m in bullish on gold based on the doji I showed you last week. I hope you are too, even if this is a warning sign. TLT: As interest rates get cut, bonds go up. Again this is so obvious that I don’t know how else to say it. Needless to say I’m in and bullish on TLT. VIX:  There is an inverse between VIX and Equites. VIX down, stocks up… Do you know VIX is the only mean reverting underlying? We talk about it for stocks and moving averages, but VIX is the real mean reverter. SPYD-  I’m known as a dividend guy… Do you want my dividend watchlists? Even if you want to invest in dividend ETFs. My inner circle  has access. I’ve been in this for months.  Upcoming Dividends I’m in KO and ALB. The charts are night and day 😊 Dividend Aristocrats Dividend Kings Week Ahead Wednesday is the focus as we get a rate cut. Also reminder this Friday is triple witching with a lot of options expiring! That’s all for this week. Earnings I’m watching GIS and FDX. I’m actually in both positions. I want to go slow until after Wednesday. We need to see what the market is going to do. I’ll see you next week. Much Sooner in our discord!

Most traders know this one simple truth: the stock market goes up over time . It's been happening for over a century. The market has a positive drift , largely because the U.S. government is constantly injecting money into the economy and driving value-added growth. This means that if you want to make money in the stock market, you can simply invest in quality companies  and wait. Over the long term, the market trends upward. In fact, the average annual return of the S&P 500 over the past 30 years is 10.52%  (assuming dividends are reinvested). Even adjusted for inflation, the return is still a healthy 7.78% . But if you’re reading this, I’m guessing you’re not here just to ride the wave of positive drift. You want more. You want to beat the market—not just coast along with it. Sure, we could all put our money into ultra-low-risk vehicles that passively benefit from the market’s upward trend. Over time, we’d accumulate wealth by simply taking advantage of positive drift. For many, that strategy works, with no need for fancy strategies or technical analysis. But if you're here, you likely aren’t interested in doing just that. You enjoy playing the game —testing your skills and finding ways to beat the average market returns. You understand that markets don’t go straight up in the short term, and those who know how to navigate volatility  can capitalize on opportunities that buy-and-hold investors miss. That’s why Good Kids  use math, probability, and technical analysis . We’re not chasing secrets or looking for get-rich-quick schemes. Instead, we want to build a simple system that stacks the odds in our favor . The market’s positive drift is only part of the story. Yes, the market has averaged around 10.52% returns over the last 30 years , but for those willing to go beyond holding and waiting, there are opportunities to outperform. We aim for more by: Selling puts  during periods of high volatility. Timing entries and exits  based on technical patterns. Adding uncorrelated products  to our portfolios to reduce risk and boost returns. Overweighting and Underweighting sectors according based on market cycles Managing Delta based on short term market direction In a world where the market’s beta (or baseline return) is enough for most, we’re looking for that extra edge —something that pushes our performance beyond positive drift. And here’s the thing: it’s possible . Research from firms like Tastytrade shows that adding strategies like options selling  can improve long-term performance compared to passive investing alone. If you’re ready to move past the simple concept that “markets go up over time” and start stacking probabilities in your favor, then it’s time to dig deeper. Whether it’s: Using volatility  to your advantage. Analyzing patterns for reversals . Leveraging uncorrelated assets  to diversify risk and optimize returns. There’s more to trading than simply following the positive drift. I talk strategy here in the blog, share trades in our Discord , and provide even more specific details to my Mr. Money Maxwell Inner Circle . While I believe there is an edge to be found, the truth remains: over time, buying and holding is historically profitable. Happy trading, good kids! -$Maxwell

9/8/2024 September is historically a tough month for the markets. Whether or not seasonality is real, the first week of September certainly feels like it is. After that V-shaped recovery in August, I’ve been raising cash and hedging with collars on all my positions. If I’m called away at all-time highs, so be it—there’s easy money in treasuries like SGOV right now. I’ve been writing about this here and posting my thoughts in discord for a while now, so I guess it’s no secret! Yes, rate cuts are on the horizon, but that doesn’t mean we should rush in. I’m being selective, and you should be too. When the market’s near its high, why chase risk for a 7% return when treasuries are offering a solid 5% pretty much risk free? The real opportunities come when we can target 15-30% returns—and we’re getting closer to that risk to reward as the market keeps pulling back. I’ve talked about my plans for a soft vs hard landing. While volatility will ramp up as we head into the election season, don’t expect the market to go straight down. Even in bear markets, aggressive bull moves happen. My hedges have been paying off during this pullback, and my dividends remain strong. Want the inside scoop? For months, I’ve been laying out the groundwork for those in the Mr. Money Maxwell Inner Circle . Specific dividend ideas, what I’m doing for a soft landing versus a recession. This week I’m sharing my exact hedging strategy from this week for members. I want you to build a system where you can make money as the market pulls back just like I did this week. My step-by-step analysis helps you build a strategy simple enough for anyone to follow. As we head into fall, this public blog, Maxwell’s Market Mindset, will get shorter and more concise. The best content—like my exact hedging strategies, ebooks, trade setups, and personal market insights—will only be available to Inner Circle members. At $99 a year (less than $2 a week), this is your chance to gain access to premium content before prices rise. I’m not pushing you to join, just giving you the opportunity to lock in this value while it’s available. With volatility high and new opportunities forming, now’s the time to get ahead of the market with a simple, effective plan. The Inner Circle will get my full breakdowns to help navigate these tricky waters and make money regardless of market direction. You in? Join Here     Weekly Charts: SPY - Is spy a double top of are we going to s curve higher? I think the market will remain volatile as we head into November’s election. The market is trying to figure out which candidate’s policies we’ll have for the next 4 years. What normally happens is once we find out, things will chill out.  Perhaps I’m too bullish all the time, but I think if we can keep dipping it will be a good buying opportunity heading into the end of the year.     QQQ - Tech looks really weak. This is not a surprise to the inner circle. I sold and collared all of my tech into the strength last month. So far that was a good call.   RSP  is the equal weighted SPY, meaning tech isn’t as strong. Although we have an evening star reversal up there (the red box). It looks stronger than SPY and QQQ. This means the market still has some strength, although this week was weak. This is a good sign of a healthy market rotation.   Do you know how to trade an evening star reversal? Did you see the blog about my favorite chart patterns ? I’m not shorting RSP, I would look to buy on a pull back. Maybe off the moving averages? Have you downloaded my free guide to make your chart look like my chart? Download it here . Moving averages are important to my trading.     VIX is spiking a bit, makes sense as we sell off, also the uncertainty heading into November maybe we can see VOL staying bid so we can sell some premium? Remember if you sell puts, you are agreeing to buy lower, if the stock doesn’t drop below the strike you just keep the premium. We want to see VIX stay elevated. Just not in the 60’s in a single day pretty please.   TLT-  I don’t know how to say it any other way. You should be in TLT, this is going to go up as rates come down. I’ve been for a year, I don’t think it’s too late, consider buying the dip or just buy it… (disclaimer: this is not trading advice).     GLD  had indecision this week. Gold has been a flight to safety and I don’t think that will change. I’m bullish, but maybe we have a little sideways movement for a bit? Iron condor, Strangle, or a bullish strategy makes sense to me.     Upcoming Dividends I like a lot of these companies with ex dividends next week. Checkout discord and see which ones I trade! Dividend Kings Dividend Aristocrats   Week Ahead September 11th this week. Take a few moments to reflect? I know I will.. CPI /PPI this week.   Earnings: ORCL and ADBE this week   Inner Circle update: This week I'm.... Remember to revisit the stock ideas I shared in the Soft vs. Hard Landing PDF.... The best move here? .... I’m sharing exactly what has worked for me over the past 20 years, and I know that if you follow along, you’ll see similar success. If you want the complete sentences and all my best content you should join the inner circle. Prices go up this month! Join Today Happy Trading Good Kids! -$Maxwell

When you're new to trading, the jargon can feel like a major roadblock. Terms like "ATM," "IV," and "LEAPS" might make you feel like you're missing out on an exclusive club where everyone else knows the secret language. But before you let trading lingo intimidate you into staying on the sidelines, here are four reasons why you shouldn’t let it hold you back. 1. Everyone Starts Confused—Even the Pros When I first dove into the world of trading, I was completely overwhelmed by the jargon. It felt like everyone else had a secret handbook, and I was just trying to keep up. But guess what? Even the most successful traders were once in the same boat. They didn’t understand the lingo at first either. Trading is a skill, and like any skill, it takes time to learn the language. The important thing is to start, even if you don’t feel fluent yet. 2. The Market Isn’t Rigged Against You It’s easy to feel like the market is stacked against you, especially when you don’t understand the terminology. But the truth is, the market doesn’t care if you’re a beginner or an expert. It’s a level playing field. The only difference between those who succeed and those who don’t is persistence. The jargon is just one small part of the learning curve. Don’t let it convince you that you’re not cut out for trading. 3. Resources Are Everywhere (GKT's Discord!) At Good Kids Trading, we recognized how daunting trading jargon can be, so we updated our Discord with resources to help decode the terms. Whether it's a glossary of key phrases or a breakdown of complex strategies, these tools are designed to make trading more accessible. The internet is also full of educational materials, from videos to forums, that can help you understand the language of the market. With the right resources, the lingo will start to make sense in no time. 4. It All Becomes Natural Over Time The best part about trading lingo is that, over time, it becomes second nature. Words and phrases that once seemed like a foreign language will eventually become part of your everyday vocabulary. The more you engage with the market, the more comfortable you'll become. Before long, you’ll find yourself using terms like "ITM" and "OTM" without even thinking about it. The key is to keep going, even when it feels overwhelming. Don’t let trading jargon hold you back. Everyone starts confused, but with persistence, resources, and time, it all starts to make sense. Remember, the market isn’t rigged against you—it just takes a little time to learn the rules. Dive in, use the resources available, and soon enough, you’ll be speaking the language of the market fluently. Join the Inner Circle If you want more insight from someone who’s been an investor for almost 30 years and a trader for over 20,  sign up for Mr. Money Maxwell’s Inner Circle . For the next two weeks, the price is reduced during the soft launch. But hurry—prices go up in September! Join our Good Kids Trading  Discord  community for real-time market updates, and be sure to subscribe  to our email list if you haven't yet—I'll see you on the blog next week and much sooner in Discord! Happy trading, good kids! -$Maxwell

9/1/2024 September is here, that means the much-anticipated rate cuts are likely on the horizon. The big question: will it be a modest 0.25% cut or a more significant 0.50%? As we head into this pivotal moment, I recommend bookmarking the CME FedWatch Tool . It’s going to be your go-to resource as we navigate these rate changes.   What Do Rate Cuts Mean for Us? Whether we’re heading for a soft landing or a recession, the initial steps often look similar—starting with rate cuts. But what’s the difference? Mr Money Maxwell Inner Circle  members have my exact game plan! In a soft landing , the Federal Reserve lowers interest rates just enough to cool down inflation without stalling economic growth. This scenario allows the economy to continue growing at a slower, more sustainable pace, avoiding a sharp downturn. The stock market tends to react positively because the lower rates reduce borrowing costs for businesses and consumers, supporting continued investment and spending. However, if those rate cuts turn out to be more aggressive or frequent, it could signal that the economy is in worse shape than expected. This could lead to a recession , where economic activity contracts, unemployment rises, and the stock market takes a hit. In this scenario, the Fed might be cutting rates to stimulate the economy, but the deeper underlying issues could cause a significant downturn. Many of the subscriptions I follow are hopeful for a soft landing, and this optimism is reflected in the monthly candles I’ve been reviewing, which show a positive outlook. If Fed Chair Jay Powell manages to strike the right balance, it could reinforce confidence in the market and support a smoother economic transition.   Monthly Market Recap: August's Wild Ride As we head into the holiday weekend and close out the month, it’s the perfect time to review the monthly candles. Before diving in, let’s run through the quick Mr. Money Maxwell Checklist :  Watchlist Ready:  Do you have a curated watchlist of key stocks? Zoom Out:  Have you looked at the bigger picture by reviewing monthly and weekly charts? Support and Resistance:  Have you identified and marked the key support and resistance levels on your watchlist? Moving Averages:  Have you checked the relevant moving averages for each stock? Favorite Chart Patterns:  Do you remember the 7 chart patterns I rely on? Keep them in mind as you analyze.   If you’re serious about taking your trading to the next level, now’s the time to join the inner circle . Get exclusive access to my watchlists, insights, and the specific names I’m tracking closely. Plus, you'll be locked in at the current price before it goes up next month.     SPY:  My friends, the S&P 500 gave us a huge hammer candle this month. The first three days were brutal, with the index gapping down more each day. At one point, we were down almost 8%, and the panic was palpable. But if you zoomed out, the pullback wasn’t as significant as it felt. The bigger story was the spike in the VIX, which we’ll get to in a second. What will September bring? Honestly, no one knows for sure. Just keep in mind that, from a seasonality standpoint, September is historically a bearish month.  It’s crucial we don’t see the index close below this monthly candle. Consider reading my hedge document if you haven’t already.     QQQ: Tech also saw a big hammer. Also again, tech is normally weak in September. Notice the higher lows (yes, I drew a purple trend line), which suggest that people are selling their tech stocks and rotating into other sectors. How can we tell? Just take a look at RSP.   RSP: A really powerful hammer on the equal-weighted S&P 500, which balances out the dominance of the “Magnificent 7.” This broadening market strength is encouraging. If we had seen lower lows here, I’d be much more concerned.   VIX: The spike in the VIX was August’s headline. I’ve read countless articles dissecting this spike, with some hypothesizing that there were calculation errors or technical issues. Whatever the reason, the surge in fear was real, leading to margin calls for those over-leveraged. If you were a “good” good kid, you sold some volatility with us on that dreadful Monday when the VIX hit the mid-60s after being stuck under 20 for what felt like forever.   GLD: What we’re seeing in gold seems to be a rush to safety. I’m continuing to look for bullish trades in gold and gold miners, as I believe this could be a strong play even if we don’t get a recession. That bearish doji we saw in June? It’s healthy! Remember, it’s not normal for stocks (or commodities) to go straight up every single month.     TLT:  Although the upper wick on TLT indicates some selling pressure, we still got a close above the 200-day moving average on the monthly chart. I’m still bullish on TLT, even though some of my swing trades have already hit their targets.     Final Thoughts: What a crazy month! August started out super bearish and ended on a bullish note. I’ve been super bullish on XLU and mentioned some specific names to the M$M inner circle members:     M$M Trade Ideas: Inner circle members have 5 trade ideas. If you haven't subscribed hurry as prices go up this month! Join here Trading vs. Investing: Remember the Timeframe   I want to emphasize the importance of distinguishing between trading and investing—and understanding the timeframe for each. While headlines might scream about Warren Buffett sitting on piles of cash or predict an impending crash (and let’s be honest, there’s always talk of a crash), it’s essential to remember that not investing is often more risky than having your money in the market. Checkout this graph I found on Reddit: This is a recurring theme because it’s vital: an uninvested dollar loses value over time, especially with inflation eroding its purchasing power. The stock market might be volatile in the short term, but over the long term, it’s proven to be the greatest wealth builder in history. I’ve heard the arguments about the U.S. potentially losing its global edge, the rise of other countries, and the potential of blockchain and crypto. While these are intriguing discussions, the U.S. stock market has a long history of resilience and recovery. Trying to time the market is nearly impossible, so staying invested is key. Upcoming Dividends I like a lot of these companies with ex dividends next week. Checkout discord and see which ones I trade! Dividend Kings Dividend Aristocrats   Week Ahead Shortened holiday week, but we still have a busy week as the labor market remains in focus. Jolts/ADP/then Friday Jobs report A few interesting earnings: Rates for Mr Money Maxwell's Inner Circle are going up this month! It's less than $2 a week for my best information. Join today! Happy Trading Good Kids! $Maxwell

I’m continuing the series on the top 6 ways I minimize my trading time . In the previous post, I discussed my watch list organization . Think of your watchlists as a tool to help you stay focused your watchlists should be created in conjunction with your trading plan. They should help you sort through the mountain of stocks to trade within minutes and minimize your trading time. So be sure to build watchlists for the strategies in your trading plan! Side note: If you don’t have a trading plan, you need to create one. If you want to be consistently profitable and successful you need your own trading plan. If you are just starting out use someone else’s plan! It’s not plagiarism it’s avoiding having to reinvent the wheel. Want access to the same watchlists I use every week? Join Mr. Money Maxwell's Inner Circle  and get exclusive insights into what’s on my radar. 📈 Don’t miss out—take your trading to the next level! 👉 mrmoneymaxwell.com You should create your watchlists based on your 'favorite' stocks ( discussed last week ) and your favorite strategies. When I talk to traders many of them don’t spend time building watchlists in a meaningful way and even fewer maintain them. This is a call to action for you to take advantage of this valuable tool. A well maintained watchlists builds the foundation for freeing up your time to take the best trades using strategies from your trading plan. I learn though examples, so I’m going to share my process. Keep in mind everyone is different. My risk tolerance, my account size, my methods are probably not the same as yours, so make your on process, but you can still apply these principals. Watchlists by strategy Daily Index: The first thing I do is review my daily watchlist that I check every day before the market opens, just to gauge the mood of the market, looking at the major indexes. I discussed this last week . Selling puts: is my favorite strategy for so many reasons (I’ll dedicate an entire article to this soon!) So as soon as the market opens, I sort my main watchlists by percent change, I’m looking at over 200 of my favorite companies having a big down day (put premium is higher on down days). Dividend Stocks: You already know I have my favorite dividend stocks on a list, so I will sort this by % down looking to buy shares or sell puts at support depending on the next ex dividend date and premium of the puts. I also check the calendar that I discuss at the bottom of this article under Built-In watchlists. Pillars: I keep a list of stocks I believe will appreciate over time, quality companies that are more investments than trades. (I'll def trade these as well, but this list is mainly longer term). This isn't something I look at multiple times a day, but I do review this watchlist just looking for opportunities. This watchlist is more so, to make sure I have all my alerts setup (which we'll discuss next week). Sideways stocks: Theta decay is my best friend, it might sound weird but I actually keep up with stocks that are consolidating for long periods of time. This list is subjective and as I review other stocks I will often add them to this list. These are just some examples, you should have a watchlist or a stock screener (either through your broker, or using a site such as finviz ) to sort through the mountain of stocks out there! Maintaining your watchlists Don't make the mistake of building a list and not maintaining it! Taking a couple of minutes to update your list will save you time in the future. Take a couple of minutes for the following maintenance tasks: Adding and removing stocks from watchlists: The more you trade, the more comfortable you get with your strategies you'll discover companies that become your favorites to trade as well. Conversely, you'll also identify those that seem to lose for you. After a few losses on the same underlying stock, I remove it from my list. After all, there are so many other stocks out there! Keep adding and removing companies that fit the watchlist on a continuous basis. Add Support and resistance: Start adding support and resistance to the charts in trading view . I like to color code my lines. Make your own system, but when I see a thin purple line I know there is weekly support or resistance (blue lines are normally on the daily chart), and if you add a line today, it will be there for months and years to come! As you can see on my apple chart, yes it takes a few minutes, but I promise this saves you so much time in the future! Remember buy at support sell at resistance is a money making strategy. Here's an example from Apple: Color coded watchlists Trading view has color watchlists: I strongly recommend you create your own system using the colors. I use these dynamic lists mainly for the short term or positions I’m currently in. This is obvious, but I want to remind you that you can not have the same underlying on two different colors! So that's why I try to use these for short term. Again this is my system and just to give you some ideas, you should make your own system! Red= Positions I’m in that are losing and I need to monitor (I also use alerts, more on this next week) Blue= I use this for stocks that have a MacD/Dmi Cross (from my alert list) Green= Stocks I’m looking to get into bullish Orange= Upcoming Ex-dividends Purple= Stocks I'm looking to get into bearish Pink List= Stocks that trade sideways. For example if I’m going through my dividend watchlist and I see a stock that might be a good buy, I’d tag that stock to the green list. (so its on my dividend list and it’s also on the green list). Then I can just sort through the green list when I’m ready to add more bullish delta to my account! So you can see I create my own watchlists based on criteria such as dividends, profitable companies, companies trading sideways, etc. Then as I run through them I color code the ones I’m super interested in the short term. This lets me keep a broad list of stocks that work through multiple stock rotations, but I can run through the color list through the week to save time! Built-in watchlists: Do not underestimate the value of default watchlists from your broker, tradingview , or stock screeners like finviz. You do not have to reinvent the wheel, if the broker or website has the information out there and it’s ‘free’, use it! Here are a few of my favorites: Tastytrade: Dividend Aristocrats: I search by IVR- as discussed in the dividend series the premium on these isn’t as much as a growth stock, but looking for higher than normal premium in a company that pays a dividend is a favorite. Liquid Symbols: If I’m low on trades, I don’t see anything great on my watchlists or alerts I’ll use this list (again sorted by IVR) to look for trades. Think or Swim: This process is definitely not as optimized as I should be. (we all need work, right?) I used to use dividend websites to find upcoming ex-dividend dates (this is the date you need to own shares to get paid the dividend) but the sites normally try to sell you a subscription or their data isn’t that great. Each Sunday I go to Marketwatch, only check the dividend box and see which stocks are going ex dividend the upcoming week. (pro tip go ahead and click on Monday of the following week in case there is a Monday ex dividend date). Trading View Hotlist: Trading View’s hotlist is a ‘fun’ list showing which stocks getting traded the most. Even if I don’t make a trade it’s good to know what is moving and see if there is a trade out there. The key for me is finding a system that I understand, maintaining the lists, adding support and resistance to the charts, and removing stocks that lose repeatedly. If I find a new stock I’ll add them as soon as I see it. It’s about remaining active and not taking the power of a well maintained watchlist seriously. Setting Alerts and getting notifications are also a key to minimizing my trading time. I’ll discuss my system next week to help give you some ideas on how you should incorporate them into your trading plan! If you found this useful let me know ! I love talking to people interested in trading (a quick thanks is always nice too). If you want more information you should join the GKT discord to discuss these tips in more detail and connect with like minded people who trade the stock market! Keep Calm and Let Theta Do the Work! Until next time

8/25/2024 This week’s spotlight was on Jay Powell’s much-anticipated speech at the FOMC Jackson Hole conference. Powell confirmed rate cuts are coming, but also cracked a joke that had the audience laughing. As he left the podium he received a standing ovation! Is Jay going to be Superman? What a shift from the past few years! The question on everyone’s mind: Can Powell actually pull off a soft landing and keep the U.S. out of a recession?  This is the narrative we need to consider as we manage our portfolios. For those in the M$M Inner Circle, you already know my game plan for both scenarios—If you haven’t joined yet you need to hurry, prices go up next month. Time to sign up! But here’s the thing—there was almost too much focus on Jackson Hole. The headlines are doing their job, keeping our attention locked on whatever’s trending. And while everyone was buzzing about Powell’s speech, the real market mover next week could be NVIDIA’s earnings. With all eyes on Jensen Huang, the big question is: Can NVIDIA meet the sky-high guidance expectations? We know the demand for their chips is there, but I see more downside risk than upside. If you’re holding 100 shares, it might be time to think about setting up some collars. Don’t have a strategy in place? Check out my blog on how to collar your positions and protect your gains . Now, let's dive deeper into why blocking out the noise is more important than ever: Trust Your Plan, Don’t Let Market Chatter Derail You   Blocking out the noise is crucial in today’s market. Every week, I emphasize this because I understand how challenging it can be. Lately, we’ve seen big investors selling positions and even Warren Buffett sitting on a mountain of cash. This isn’t new information, but let’s be real: we’re not Warren Buffett (I know captain obvious).  We don’t get the same deals as Berkshire Hathaway. Remember back in ‘08 when Warren snagged preferential shares and rates that the rest of us could only dream of? I sure do. I’m not here to complain, but to highlight why sticking to our own plan is essential. Warren raising cash doesn’t mean you should sell it all. People will always say the stock market is about to crash. It’s a constant drumbeat. But look at us:     Warren may have been offloading BAC, but that didn’t stop us from trading it. This trade was posted in discord. Our put sales closed for a nice win. Price to book for BAC is good! It’s still a bank even if Warren is selling. The good kids are all about staying informed without following the herd off a cliff. We all need to make our own trades no matter what billionaires are doing! So, keep your ears open, but don’t let the noise drive your decisions. Stick to your plan and keep trading smart. I also own shares of BAC, did you read my blog about using premium to buy shares ? SPY and RSP: A Tale of Two Indexes Remember when I mentioned how heavily weighted SPY is towards tech? It’s worth revisiting about 31% of SPY’s total weighting is tech . SPY doesn’t quite capture the broader market’s strength. But when we look at the equal-weighted S&P 500 (RSP), the picture changes a bit. Did you see how RSP hit a new all-time high on Friday? Meanwhile, SPY showed a bullish inside day, mainly because of some softness in the Magnificent 7 tech stocks. Do you see how tech is pulling down SPY, but the market’s strength is broadening. I’ve highlighted a retest gap on SPY’s chart, signaling where the market might retest before bouncing back. This isn’t just a random guess—remember, gaps on charts usually fill, and a healthy retest could be just what we need. I do like the red squiggly line I drew below. Take a look at RSP’s weekly chart, and you’ll see three bullish weeks in a row, with RSI running high Keep an eye on RSP if tech continues to be weak. Also remember retests are healthy. Understanding these dynamics helps us stay ahead and we can block out some of that noise I mentioned earlier. Make Your Charts Look Like Mr. Money Maxwell’s Ever wondered why my charts look different than yours? It’s all in the setup! I’ve heard from many of you who want your charts to look just like mine, so I’ve put together a free TradingView guide  that walks you through the exact steps to set up your moving averages just the way I do. It’s time to take yo ur chart game to the next level and see the market through Mr. Money Maxwell’s lens. 👉  Download the free guide here and get your charts looking like $Maxwell!     Weekly Recap: SPY:  What a V-bottom recovery! Over 10% in just three weeks—uncommon, but anything is possible in this market. QQQ:  Tech is showing weakness compared to the broader market. Notice the lower highs? This is why I love using moving averages as buying targets. NVDA’s earnings this week could steer the tech sector, so keep watching. TLT:  Still strong overall. Remember, it’s normal to see some bearish weeks—stocks don’t just shoot straight up!     GLD:  Gold’s rise alongside the stock market is intriguing. Could this be a flight to safety? It’s rare to see both moving up simultaneously. Gold looks bullish to me. VIX:  Back in the familiar range for 2024. Despite what many ‘experts’ predicted; volatility didn’t stay high for long.   The Power of Time in the Market Thinking about going all cash? Before you do, consider this: some of the biggest market moves happen in just a few days each year. If you’re out of the market, you could miss those critical gains that drive long-term growth. In this week’s blog, I dive deep into why time in the market is your greatest ally, especially when it comes to retirement. Interrupting compounding can have serious consequences for your financial future, so let’s talk strategy. 👉  Read the blog to understand why staying invested is key to a successful retirement. Upcoming Dividends Dividend Kings Dividend Aristocrats JNJ and NEE look good to me. I’m in both.   The Week Ahead: US Economic news is rather quiet this week. Yes jobless claims and PCE, but I think NVDA earnings will be the major focus for the week.       Earnings: Wednesday after the close is the biggest day. NVDA, CRM and CRWD. I’ll be watching SJM, CPB, OKTA, HPQ, DELL, MRVL LULU and MDB as well.   As we head into the last week of August, I’ll be soaking up some sun at the beach, letting my theta decay and SGOV positions work their magic. If you’re in the Atlanta area, I’ll also be at Tastytrade’s “Building a Complex Portfolio” event on Saturday — drop me a line  if you’re planning to attend; I’d love to connect. Rates for Mr Money Maxwell's Inner Circle are going up next month! It's less than $2 a week for my best information. Join today! Happy Trading Good Kids! $Maxwell

Last week I shared 6 tips on how I minimize my screen time , using watchlists are one of the top ways I minimize my trading time. Like most things in trading the specifics boil down to a personal preference. What I do might not work for you, but in the GKT spirit I’m always an open book. Maybe you can learn from me, maybe you even have suggestions for me. Most of my watchlists are self-created using trading view . (that's an affiliate link if you decide to subscribe I'd appreciate you using that.) There are a couple exceptions that I'll share below. This is not a sales pitch for trading view, but I really like the product, I use it daily, and I pay full price. Want access to the same watchlists I use every week? Join Mr. Money Maxwell's Inner Circle  and get exclusive insights into what’s on my radar. 📈 Don’t miss out—take your trading to the next level! 👉 mrmoneymaxwell.com Separate Watchlists You can choose to have a single watchlist with lots of companies, or you can make as many lists as you like. I divide my watchlists based on the follow factors: Time Horizon and Account Type (like IRA, short term account, longer term account) Company Fundamentals Specific Trading Strategy This means some of my watchlists have duplicate underlings on multiple watchlists (for instance Apple appears on more than one list). This strategy works best for me because my watchlists are shorter and I find I can stay focused on my strategy and make the best trades. Examples of my Watchlists In the article I discussed a 'Quick Morning Review' this is done via a watchlist. I scroll through the following list every single morning 30 mins before market opens. Do you notice every stock on this list is purple? Trading view has built in color coded lists (below) and I encourage you to use them. I use each of these for different purposes (Purple is my daily list, blue is my possible swing trades, red is positions i need to monitor for protection, etc). Build your own system but use these! ETF’s: This includes the following, I like to watch this to keep up with market rotations that I talked about back in the dividend blog post . XLC (Communication Services Select Sector SPDR Fund) XLY (Consumer Discretionary Select Sector SPDR Fund) XLP (Consumer Staples Select Sector SPDR Fund) XLE (Energy Select Sector SPDR Fund) XLF (Financial Select Sector SPDR Fund) XLV (Health Care Select Sector SPDR Fund) XLI (Industrial Select Sector SPDR Fund) XLB (Materials Select Sector SPDR Fund) XLRE (Real Estate Select Sector SPDR Fund) XLK (Technology Select Sector SPDR Fund) XLU (Utilities Select Sector SPDR Fund) Dividend Companies: Mainly Dividend aristocrats but also some of my other favorite dividend stocks as well. I wrote a complete series on how I use dividend stocks as a staple of my trading. Check out the series ! Long Term Quality Companies: There are companies I believe in long term and don’t mind holding for more than 5 years. Stocks I normally pyramid into. I have stocks like GOOGL, AAPL, COST, WMT, JNJ, SO, PEP, WM. (its highly subjective to you). Money making companies: - This list is strictly based on fundamentals then pared down to companies I like to trade. High Liquidity: This is my math based favorite of companies that have high liquidity. I think I got this list from Tasty Trade its hundreds of underlings. Sideways Companies: I like to trade companies that trade sideways or are range bound, so when I see a stock not moving too much it goes on this list. Futures: Currencies, Commodities, and Forex- again this list was from tasty trades cheat sheet, but you can find it other places as well! In addition to the watchlists I create, I do also use watchlists within TastyTrade and the hotlist within trading view! These are lists with underlyings I didn't create, but when I don't see trades I like, these lists help me look outside the box. Next time I’ll talk more about how I sort my watchlists, how I maintain the watchlists and how I trade based of my watchlists. Read the full article! If you found this useful let me know ! I love talking to people interested in trading (a quick thanks is always nice too). If you want more information you should join the GKT discord to discuss these tips in more detail and connect with like minded people who trade the stock market! Happy Trading Good Kids!

How would you like to have a stock position where you can’t lose? If the stock goes down, you are guaranteed to sell your stock higher and still make a profit. If the stock continues to move up slowly or sideways you continue to make money. The only downside is you are capping your profits. Hedging with options doesn’t have to be complicated. If this sounds good to you, keep reading! Let's talk about collaring your shares to lock in profits. A collar is two separate options. You must have 100 shares to collar your position! You sell a call (AKA a covered call) and you buy a protective put (AKA a long put). I often add both trades at the same time, but of course you can “leg” into each part separately. I'm a visual person, so lets look at an example. On the chart below look at the two red lines I drew. You would sell the 200 call, and buy the 195 long put. This is what it looks like on the options chain: the red box on the left is the covered call, the red box on the right is the long put. I will break this down more below. The covered call pays you a credit. This is the red box on the right. We’ve talked about covered calls previously . As you recall this is an agreement to sell your shares at 200 before Jan 19th. Keep in mind you are still capping your upside if the stock goes above the strike of your call (a collar doesn't change that). Many times you can roll this call out in time and keep reselling them for higher strikes as long as the stock doesn’t move up to quickly (same as with a covered call). In the example above we could collect $3.52 to sell the Jan 200 Covered call. So if the stock goes over 200, we're agreeing to sell our shares. The long put costs you money the red box on the right in the graphic above. You will have to pay for the insurance, but this put gives you the right to sell your shares at 195 before Jan 19th. As the stock drops you have the right to sell your shares. For my more advanced traders you can also sell this put for a credit if you want to keep your shares. This reduces your cost basis! In the example above we are buying a Jan 195 put for 2.30. If the stock goes below 195 we have the right to sell our shares of Apple at 195 if it drops. The power of the collar is the covered call is paying for the cost of the long put. At the bottom of the graphic above you can see we collected $1.22 to collar Apple. We collected $3.52 on the covered call, we had to pay $2.30 for the put. A covered call will always pay us more, but we have no protection to the downside with a covered call other than the premium we receiged! So yes, we collect less premium, but we have insurance! This example above shows putting on a collar for a credit.This is referred to as selling a collar because I am getting paid for the collar.  Receiving a credit is my favorite method for collaring a position. If the stock stays between the covered call and protective put I will collect the credit which continues to reduce my cost basis and I can put another collar on, hopefully getting another credit. Sometimes I will put on a collar and pay a debit which is referred to as buying a collar. I pay a debit to collar a position if it’s a small percentage of my win. If I’m up 5.00 a share, I don’t mind paying a debit of .25. Would you pay $25 to lock in a win of $475? I only put on collars when I’m profitable. If you are not profitable you risk getting called away on your shares for below your cost basis. I would rather hedge my position with long puts, put spreads, or just sell the position instead of adding a collar. I collar my stock when it’s reaching resistance or a moving average and I have a sizable profit on my position. I loe to sell collars after several up days and when the stock is reaching resistance, or right before earnings. Remember we are insuring our position from the downside with the long put and just like insurance on your car or home you have to pay for it. Imagine having your TradingView charts look exactly like mine! I've put together a FREE, step-by-step guide that shows you how. Don’t miss out—grab your copy now! 👉 Adding Moving Averages to TradingView the GKT way I use collars instead of just covered calls in several situations, I will give you some examples below. Collaring a winner before earnings is a great strategy! As you know earnings can be volatile. Lets look at this example with Google. As you see on the chart Google has earnings after a pretty nice run since last earnings. As you can see below, my stock is up $4,711 so I'm going to sell the 143 Covered call, and I'm going to buy the 135 long put for a credit of .30. Again I know this is a recap, but I'm agreeing to sell my shares at 143 with the short call and I'm locking in my profits by having insurance to sell my shares at 135 with the long put This is what Google did on earnings. It gapped down! If I only had a covered call I would have collected $330, but I would not have any down side protection. Look at my collar's profit and loss below! The long put is up $1,017 and the covered call is up 330. So now I can close both of these options and lock in the cost basis reduction. Or I can hold on to the long put and agree to sell your google shares if it stays below 135 at expiration. There are some other options I have, but you'll need to join GKT's discord to discuss those. Did I mention the discord is free? So as you can see collars a great over earnings, the biggest 'risk' you have is capping your upside. If google gapped up to $150 a share I agreed to sell my shares at $143.30. Also as I've preciously stated we don't collect as much premium as we do when we only sell the covered call. If the stock I have collared continues to trade sideways and I can sell collars repeatedly, meaning I get a credit, I continue to reduce my cost basis. Collars also help me avoid paying taxes on some of my shorter term winning positions. I generally like to try to hold a position more than a year for tax advantages. So, if the stock drops like the example above with Google I will often sell the put I bought when the stock hits support. The covered call would expire worthless which also reduces the cost basis. So I made some money without realizing the entire $4,000 short term capital gain. Yes I pay short term taxes on the options, but I can retain my shares. Using collars is a very effective strategy to not only hedge your stock, but also reduce your cost basis. It's important to know the difference between a collar and a covered call. There are some variations to collars that we can discuss in a later article as they are a little more advanced. If you want more information you should join the GKT discord  to discuss these tips in more detail and connect with like minded people who trade the stock market! I hope this article was valuable to you. We want to help educate and show you trading doesn't have to be complicated, and you can do this. Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Welcome back to the series on reducing cost basis. If you missed the first two articles, I highly recommend checking them out to get the full picture of this concept. We've already covered why reducing your cost basis is essential and discussed a straightforward method for determining where to buy shares . Today, we're diving into the world of covered calls, with a quick overview of what a covered call is, why I sell covered calls and how I decide when to sell my covered calls. A covered call is an easy and 'safe' strategy you can use to reduce your cost basis once you own 100 shares of a stock. By selling this call you are agreeing to sell your 100 shares to someone else if the stock hits that price. It's called a "covered" call because you have the shares to back up your agreement. Please note: this strategy only works if you have 100 shares. If you're just starting out with a smaller account, your goal should be to work your way up to being able to own 100 shares (ideally of a few companies for diversification). Without 100 shares of stock selling a call would mean you are selling "naked" calls, and that's a high-risk trade you should avoid! So, what's the deal with covered calls? Essentially, when you sell a call option, you're making an agreement to sell your 100 shares of stock at a price you've chosen before a specified date. In return for this agreement, you receive an upfront payment known as the premium. Think about covered calls like renting out your shares with an agreement to sell at the price you choose. If the stock doesn't hit that price in time, you keep your shares and you keep the premium they paid you, just like a landlord keeps the rent. I also think of this premium like an extra dividend. In fact, I sell calls more frequently than most of the dividends payments I receive from my stocks. Many stocks pay dividends one a quarter, I usually sell calls on a monthly basis, although depending on my overall strategy and the stock I'm trading, I might go as frequently as weekly! The reason covered calls are described as a safe options trade is the primary "risk" you take is capping your upside potential. You will see this in the next article when we jump back into the CAH trade I took. In simple terms, if the stock skyrockets, you've agreed to sell it at your chosen strike price, potentially missing out on more significant gains. But remember, locking in a profit is never a bad thing – trying to catch the very peak of a stock's rise can lead to disappointment. To maximize your premium while minimizing your risk, I pay close attention to the stock's candlesticks. If it struggles to close above its moving averages, I get more aggressive with selling calls. There are times when I will sell calls below my actual cost basis. If the stock is in a strong downtrend. Imagine having your TradingView charts look exactly like mine! I've put together a FREE, step-by-step guide that shows you how. Don’t miss out—grab your copy now! 👉 Adding Moving Averages to TradingView the GKT way However, when the stock is in a bullish trend, I wait for at least three up days and/or for the stock to approach a resistance before I sell a call. This is not time intensive, Remember you can and should set alerts to notify you when your stock is near resistance, allowing you to maintain a balanced life. The reason I often wait to sell a call is bullish moves yields more premium compared to down day. I used to sell 25 delta covered calls randomly, and this worked pretty well. But over time, I've discovered that timing my calls more strategically enhances the premiums I collect, which, in turn, accelerates my cost basis reduction by bringing in more income. Remember, the goal is not to complicate things but to make this strategy work for you in the simplest, most efficient way. It's all about maximizing those profits while minimizing your risk and workload. We will jump back into the CAH example next! If you want more information you should join the GKT discord to discuss these tips in more detail and connect with like minded people who trade the stock market! Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Do you want to learn how to generate passive income with options trading? What if you could get to the point where you spend a few minutes trading options that have a high probability of winning, that if you are wrong you have a second chance, and all the while you generate consistent passive income? I understand this sounds too good to be true, but I've been doing this for over 20 years and I want to let you in on "my secrets" that let me enjoy the freedom I have today. Today's article has a focus on beginners! I'm sharing my insights with you – no sales pitch, just valuable information for free. Understanding Put Selling: Simplified Before diving into put selling, let's discuss what a put does. In simple terms, a put option gives the buyer the right to sell a stock at a predetermined price. As a put seller, you receive a premium and agree to buy the stock at the specified price if the buyer exercises the option. Selling a put involves receiving payment known as premium in exchange for agreeing to buy 100 shares of a stock at an agreed-upon "strike" price. The key is selling puts on stocks you're willing to buy at a lower price, so even if you are wrong, and the put sale loses you own shares of the company, Then you generate additional income through covered calls. I discussed covered calls here ! A picture is worth a thousand words, so let's look at an example. Assume we sold a $140 strike put on AMD (the red horizontal line below.) Let's assume we get paid $150 to sell this put. If AMD stays above the red line- 140 a share until the contract expires we keep the $150 and the put contract we sold expires worthless. If AMD goes below 140 we're agreeing to buy shares at 140.... Even if it goes down to 100, we're agreeing to buy them at 140 in exchange for that $150. There are ways to hedge, and ways to reduce your risk and we discuss these often in our discord . The key to put selling and remaining as passive is possible is to sell put options on stocks that you are willing to buy at a lower price. You set a good until cancelled order on your put sale and you walk away! If the stock bounces your broker makes the trade for you, if the stock drops you get put 100 shares of stock and then you sell covered calls to create even more income. This is called a Wheel Strategy, GKT trades these all the time, check out our discord if you want more information. Why Put Selling Works: A High Probability Strategy Put selling, especially when done the right way, is a high probability strategy leveraging time decay, implied volatility, expected moves, technical analysis, and more. Time Decay (Theta):  Options lose value as they approach expiration. Time decay works in favor of the put seller, contributing to the option's decreasing value until it expires. Implied Volatility (IV):  Put selling benefits from selling options during periods of heightened fear or uncertainty when implied volatility is high. As markets settle, the likelihood of options expiring worthless increases. Expected Move:  Understanding the expected move and using it strategically enhances the probability of success in put selling. Smartly combining this with technical analysis, including moving averages and support/resistance levels, informs well-informed trading decisions. Technical Analysis: The Chart is another valuable input we consider when trading. If we see Moving Averages these can be used as places a stock might reverse. Recognizing key support and resistance levels also helps us make informed decisions. . Ready to level up your trading game? Imagine having your TradingView charts look exactly like mine! I've put together a FREE, step-by-step guide that shows you how. Don’t miss out—grab your copy now! 👉 Adding Moving Averages to TradingView the GKT way Real Example: A Walkthrough of a trade setup on AMD Listen, I realize all these words might be confusing. Let's look at the AMD example again and walk through this. If we sell that 140 put on AMD and the stock is currently trading at 177 that is a 20% discount! People love discounts until it comes to stock trading, but this is why you combine math to help push through the emotional fears of trading. See the chart below, we're agreeing to buy some AMD at 140, but how did I decide that's a good strike price to sell. I used math! You might be saying, "but Justin, I'm TERRIBLE at math." Hey I'm not great at math either, but here's the thing the broker will actually do most of the work for you right here on the screen. Especially if you use Tasty Trade . When you look at the options chain for AMD, you will see a graph of numbers that probably don't mean a lot to you.. But lets focus on a few key things and simplify this. The options chain can be intimidating at first, but GKT can help! The probability of profit are right on the screen (I put red boxes around them) POP is short for "probability of profit", and P50 is short for "probability of hitting a 50% profit". So as you see below this put sale has an 88% chance of expiring totally worthless (POP) and a 95% chance of hitting a profit target of 50% (P50)! Do you see that blue dotted line between 140 and 145 in the same image above, that is the standard deviation of the expected move. The orange line in the middle is the expected move of the stock during this time. This is all on the same screen. I know there's a lot in that picture but let's just focus on the basics here. So we have a good probability of profit, our put's strike is one standard deviation away and we are over $10 outside the expected move of the stock! What about implied volatility. Remember I said the more volitivity the better its to sell puts? You can see that too right in your broker! It's actually on the picture above listed as IV Rank, but Tasty Trade also graphs it for you. See the red and green lines below, I put a red square around them. The volatility is charted and you can see it's higher than it's have been in some time. Yet another check mark for taking this trade! Put selling offers traders an exciting opportunity to build passive income. By understanding the fundamentals of this strategy, including factors like time decay, implied volatility, and technical analysis, you can navigate the market with confidence. When done right, this strategy creates a nice stream of income. If you want more information you should join the GKT discord  to discuss more and connect with like minded people who trade the stock market! I hope this article was valuable to you. We want to help educate and show you trading doesn't have to be complicated, and you can do this. Happy Trading Good Kids! Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

Today I’m taking a slight detour from our usual options talk and I’m diving into a longer term strategy focused on trading shares of stock using pyramiding. Sounds like an Egyptian monument, right? But in the trading world, pyramiding is a technique of adding to your positions based on price or time. Basically as the price of your stock goes down, you're buying more shares. You're building, bigger layers as you go down, essentially making a pyramid as shown on the chart below. As a reminder, this is not trading advice, I am not a financial advisor nor am I recommending you setup or trade the following examples. This is priced based pyramiding: you buy more shares as the underlying goes down: This is time based pyramiding: you have more shares over time. I know you might be thinking, "That's it? Just keep buying more shares?" Well, yes, and no. Pyramiding isn’t just about adding more shares, it’s about adding them strategically. Just like everything else there is no one-size-fits-all approach, this strategy works will all account sizes (if you can own 100 shares there are more benefits), and you need an exit plan if the stock keeps going down so you don’t lose all your capital! I’ll also discuss how I pick my levels, go over a couple variations, and of course discuss how we can also use options to pyramid, protect, and possibly even add a little extra cash flow. How to Pyramid Effectively: Two Approaches 1. Price-Level Pyramiding: (First image above) Here, we increase our position as the stock price hits certain predetermined levels. For instance, let's say you are interested in a company trading at $100, buy 10% of your total allocation at $100. If the price hits $80, you would buy another 20% of your total allocation. If it hits $70, you would buy 30 then at $60 you would by 40%. This way, you're adding more weight to your position as the stock pulls back and reducing your cost basis. Of course depending on your account size and the price of the shares, your number of shares will vary, but the principal works the same. Hedging with options will be slightly different in terms of leverage, but we will discuss that below. 2. Time-Based Pyramiding: With this method, you buy a fixed number of shares at regular time intervals, regardless of the price. As time goes, you have more and more shares. For example (see second image above) if you want to buy $1,000 of an underlying, you break your buying into an average of 5 buy across the next 5 weeks (or months). This approach helps to smooth out price fluctuations and lets you accumulate shares over time. Lets say you wanted to buy $1,000 of Delta Airlines (stock ticker DAL) and the stock is currently trading around $40 a share. (1000/40= 25 shares) So a time pyramid would look something like buying 25 shares every Friday (you could chose 25 shares a month as well). It’s all dependent on your objective and timeframe, but personally once a week is my as short as I would ever go. There's a place for both these methods in your trading, I love the buy low, sell high philosophy, but sometimes stocks don’t dip enough to get all the levels conversely sometimes they keep dipping way lower than you want! If you buy over time you are getting the exposure (positive delta) you want which is great in a bull market. But, remember pyramiding requires planning ahead of time and a clear exit strategy (both for a win and a loss). It’s essential to have a ‘line in the sand’ where you'll cut losses if your thesis changes or if the market turns against you. No one wants their pyramid to turn into a pile of rubble! I normally try to pyramid into companies that I can own at least 100 shares, because there are more options such as covered calls, collars, and strangles we can use to bring in more income! I will be discussing these in upcoming articles. Just know with 100 shares (or lots of 100 shares) you are opening yourself up to more income as we discuss daily here at GKT! How do I determine my price based pyramid levels: When in doubt, I zoom out! So instead of looking at the daily chart I zoom out to the weekly chart and I always keep the 100 and 200 moving averages on my chart. As you see on the chart above: I have a few more moving averages and I also like to draw weekly support and resistance (the purple lines you see). I draw my buy lines where I see support and moving averages. When you zoom even further out to the monthly chart you can see 100 and 200 moving averages are REALLY far away right? That is why you need to have a protective line in the sand. If you don’t have 100 shares of the company you will be over insuring your position, which isn’t always a bad thing, if MSFT keeps going down and you only have say 50 shares you are actually going to make money on your position as the underlying pulls back. Want your TradingView to match with mine? Imagine having your TradingView charts look exactly like mine! I've put together a FREE, step-by-step guide that shows you how. Don’t miss out—grab your copy now! 👉 Adding Moving Averages to TradingView the GKT way You can also use Fibonacci retracement tools. Here's the thing: you can set your levels however you want! Just figure out what works for you, and ALWAYS have a line in the sand where you are cutting your losses. Everything works, just not all the time, but don't let emotions or fear hold you back! Make a plan and get to trading, you miss all the trades you don't take. Some variations: If you are buying shares they never expire so you do not have to worry about calls expiring worthless. That said I do some more speculative pyramids using put sales as well. Depending on your account size and your conviction of an underlying you can sell 1 put at your 10% level, 2 puts at your 20% level and so on if you want to keep going. If the stock pulls back you would get put the shares. If you don’t want all the shares you could sell the extra shares and just keep the number of shares you would normally have bought at these levels. You of course have to be sure you aren’t over leveraging your account, and understand that if the company goes to zero you are responsible for the full 100 shares per put you sold, but this is a strategy I use. If the stock never dips I keep my premium. Again this is probably for the more advanced traders with larger account sizes. But it’s a great way to dollar cost average, and in bull markets this can be a good way to collect premium without having to own the shares outright. Conclusion: I believe pyramiding is a strategy everyone should consider for part of their portfolio and trading plan. So many traders and investors wait for the ‘bottom’ to buy, only realize there can't be a bottom until we've already bounced so it’s too late. Don't be afraid to pyramid into companies you like! Have a stop, or protective puts. We'll cover hedging, covered calls, profit targets in upcoming articles. At GKT, we help you build that plan. We might be all about those 'math-based' options, but we know there's more than one way to be profitable and to grow a portfolio. And sometimes, the simplest strategies, like pyramiding make all the difference in your trading journey. If you have any questions about this strategy or want to learn more about trading in general, feel free to join our free GKT discord community. Let's continue to learn and grow together! Until next time, Happy Trading, Good Kids! As a reminder, this is not trading advice, I am not a financial advisor nor am I recommending you setup or trade the previous examples.