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  • Boost Your Trading Confidence: High Probability Trade Tips The GKT Way

    Trading without a plan can feel scary, sometimes trading with a plan is challenging for newer traders. But when you put math and the charts in your favor, trading with confidence is easier! Tastytrade does a nice job of displaying the probability of profit for options trades. Do you see the two red box below? The POP or (Probability of Profit) is the chance of your trade being profitable at expiration. The P50 is the probability of the trade hitting a 50% of it’s maximum profit before expiration. POP and P50 are calculated using a combination of historical data, mathematical models, and market analysis. I'm not going into that level of detail here, I can't even begin to try if I wanted! Lets look at the risk curve. Tastytrade also does a nice job of showing you where the share price of AMD can close for you to be profitable, and where you start losing money. The green shaded area is profits. So above if AMD closes above 133.62 you make money. Below you lose money on this put sale. If you are a more experienced trader this is all simple, you know all this. For our newer traders it might still be a little fuzzy. That's why you should ask questions in the discord thread for this blog! Not a member of our discord? You should be! The information above is a great indicator you are making a high probability trade but I don’t stop here. I believe you can add technical analysis (looking at the charts) to add more “probability” or confidence to your trade. Do you see on the daily chart below we have a 200 moving average (the thick red line I highlighted? It's at 139.32. So selling a 135 put makes sense! Also checkout that purple box in the chart above from November to January. We have support and a moving average that should help support AMD if it suddenly drops. It looks like it could drop, the chart is a little heavy looking after all, but it's all above the 135 put we are considering selling. I always think you should zoom out! Let's look at the weekly chart. Do you notice I've highlighted two similar looking features in the chart below? We have a 50 EMA (enhanced moving average) on the weekly that at 141.41 slightly above the 200MA on the daily. This is extra confidence. I see support around 130 on this chart. Don't just look at the chart, think about liquidity and return as well! Consider the premium received the orange boxes above. Ideally I want 1% for every 30 days so the 135 put is paying more than 1.35 The option has plenty of liquidity as shown by the red box. The green box shows the bid ask spread is acceptable. You can sell a put for around 1.37 and you can buy a put for around 1.41. Of course we want the mid price... I’m willing to make accommodations for these factors based on how much I like the stock. This meets the 1%, the option is liquid and it has a nice bid ask spread! Just because this is a high probability trade, I don't want you to be mislead. This trade may not work. Even though we have built up a good thesis to why this is a high probability trade the 10% chance it doesn't hit 50% is real. But if you are selling a put you can let the put expire in the money and take shares of AMD at a discount and a nice level where there is support. You can turn this into a wheel trade. If you can’t afford to take the shares, you would want to close this if it closes below the moving averages. Remember you always need a plan for your trades. What I’ve shown you today is how I build an even higher probability trade that gives me more confidence in taking my trades. This is an example with a short put, but you can do this same thing with defined risk trades as well! Do you want to learn how I underwrite a stock trades similar to how real estate investors underwrite real estate deals. I'm hosting a webinar, Join GKT Newsletter, or if you are really serious I'll see you in discord much sooner. Happy Trading Good Kids! I provide all of this to you for free. If you enjoy this, perhaps you'd consider buying me a coffee. If you have feedback please let me know. I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

  • Real Estate vs Stocks- Do You have to Choose? Insights from a 25-Year Investor

    As someone who’s been investing in stocks for over 25 years, I sometimes feel like the odd man out at real estate meetups. Many investors think stocks and real estate are worlds apart, but they’re more alike than you’d think. Last weekend I was out in Denver at a Better Life Tribe Real Estate Summit. I picked up some key insights. I've been a member of Brandon Turner's Tribe since it started and it's made a huge difference in my wealth, health and relationships. If you want to talk about it, email me, my affiliate link is above doesn't cost you anything extra, helps reward me if you use it. RSVP and Mark your calendar: I’m hosting a lunchtime webinar on May 22nd at 12 pm Eastern. After 25 years in the game, I think I’ve got a pretty good handle on this, and I can help you! Stock Market Mastery using a Real Estate Mindset Many real estate investors forget stocks are assets too. Just look at my Google, Amazon, Costco, NVDA, and Walmart shares that I've owned for more the 20 years—they’re like my own little rental properties because I understand how to sell options against the shares. Sure, the stock market might not offer the same tax perks as real estate, but if you get educated stocks can generate passive cash flow in stocks and you can have a great portfolio of real estate too. Here are my key takeaways along with pictures I took during the event: Not taking action is the most common mistake People are scared to make a mistake, analysis paralysis takes over, and fear causes you look for a perfect deal/trade. Once you do a little research it's more important that you take the next step than it is what step you take. You are going to make mistakes, trades/deals won't always work. Have a plan, have a support system and just decide to take action. You need processes and systems to be successful Create a plan that makes sense to you, build a process to execute your plan. The process should be as simple as possible. Have a simple trading plan, have a good system for your real estate are key to success and scaling. Complicated processes lead to confusion and poor execution. Tactics need to change over time Remember nothing works all the time, the key to success in real estate and stocks is understanding that tactic's need to change and principals remain constant. You need multiple tools in the toolbelt because when you only have a hammer, everything looks like a nail. Block out the Noise Our brains are wired from days where we had to be on alert from the predator trying to eat us in the middle of the night. Fear and negative news is what gets people's attention and the talking heads know this. Investors need to block out the noise. Stay true to your plan, it's ok to be a contrarian. It's not ok to get too confident, or give into our emotions. Know your why! (and it's not money) Why do you want to be successful? Realize that money and materialist goals are NOT the real goal for investing. Money is a tool. Have a written why of why you want to make money in Real Estate and Stocks! Because when you aren't making money, you have to keep going! Intrinsic and Extrinsic apply to Real Estate and Stocks! Understanding intrinsic and extrinsic values are important. We often focus on things we can't control, you can't control external factors like the market so focus mainly on factors you can influence. Understand how the market prices this in. Predicting the short term is so hard Make educated guesses, but have a plan that accounts for longer term success. I sell puts because if I'm wrong in the short term shares never expire. I wrote about why I'm not a day trader. This was reinforced during Brian Murray's presentation. Find Opportunities when others are scared When other's do not want to buy, that's when you can make creative deals in real estate, that is when you get bargain prices in the stock market. I made more than years worth of salary selling options on META (facebook) when most people didn't see the bigger picture. I did it again with JPM (JP Morgan). Warren Buffet said it best. "Be fearful when others are greedy, and greedy when others are fearful." It's not easy, and that's actually good If it were easy and simple everyone would do it... Getting rich quick is equivalent to winning the lottery in both stocks and real estate. Real wealth benefits from compounding. Not just compounding your capital, but compounding your knowledge too. Avoid the coaches who tell you they have the holy grail method for making money. Whatever they charge for the strategy, that is their shortcut to building wealth. Diversification is very important David Greene called it portfolio architecture, but I call it diversification. If you want to be as successful as possible in all market conditions (meaning having ability to withstand ups and downs) you need multiple asset classes. The stock market has dips, the real estate market has dips, and humans have dips Brandon Turner reminded us that we're all going to have dips. He referenced Seth Godin's book 'The Dip'. Results are not linear to our efforts and the most successful are the ones who push through the dip. There were far more takeaways, but you are probably tired of reading, and I'm tired of typing :) Join me for the webinar, Join GKT Newsletter, or if you are really serious I'll see you in discord much sooner. Happy Trading Good Kids! I provide all of this to you for free. If you enjoy this, perhaps you'd consider buying me a coffee. If you have feedback please let me know. I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

  • Are You Leaving 7% Yields on the Table? 5 Facts about Master Limited Partnerships

    You could be missing out on an opportunity to generate consistent 7-10% yields in the stock market. Today I’m discussing Master Limited Partnerships (or MLPs) and 5 important points to consider if MLP’s should be part of your diversified portfolio. I did an extensive webinar on dividend stocks, if you weren't able to attend live you should catch the replay. From how to pick stocks, where to buy and sell them, and how to increase your yields! I also discussed MLPs. Today lets break down Master Limited Partnership's just a little bit more. 1.       What is an MLP, how does it differ from a normal stock? MLP’s trade under a stock ticker but they are not structured like a typical company on the stock exchange. They often focus on energy infrastructure assets like pipelines oil, gas, coal, timber, and storage facilities. Their structure leads us into the next consideration, and that is taxes! 2.       Tax Advantaged Investments. MLP’s are considered a Pass-through entity, much like real estate syndications. There are General Partner’s and Limited Partners. The business is structured so that it is not subject to corporate taxation. However, the distributions to MLP shareholders are generally subject to income taxes. We are the  limited partners. This is why you see L.P. on the charts. As a limited partner be aware of the tax implication for you. 3.       K1-s take a while to arrive. As a pass through entity, if you decide to trade these you should be aware that you will receive a K1 instead of a 1099-Div for your taxes. You likely will not receive your K1 until early April. I’m not exaggerating when I say I got a K1 on April 5th. I bring this up every time I look at EPD's chart, but I had already filed my taxes when the K1 arrived in the mail. 4.       High yields mean steady income. I have stressed why we should not chase high yielding dividend companies based solely on the dividend, did you watch the webinar? MLP's pay consistent dividends, and when you combine a buy low, sell high strategy by waiting to buy the shares at support, MLP's help make a diversified portfolio. Everyone’s portfolio should have multiple companies in each category of stock. Adding some EPD to your PG, KO and ABBV seems like a nice combination! These are not specific stock suggestions, they are examples of stocks I happen to own. 5.       Interest Rate Sensitivity. Interest rate / Oil price risks- MLP’s are generally related to oil and gas pipelines. These companies are sensitive to changes in the interest rates, and the supply and demand can be impacted by the price of the underlying commodities. So if interest rates are already high and likely to go down perhaps these are more appealing. In low interest rate environments keep in mind this risk, although MLP's are generally still appealing because of the dividend yield the share price might offset some of your gains. I think MLP’s have a place in portfolio’s where you are looking for a steady income through dividends, and when need some diversification outside of ‘boring’ dividend stocks. I’ll see you next week here at the blog. I'll see you much sooner in our discord if you want to sign up! Happy Trading Good Kids If you enjoy this, perhaps you'd consider buying me a coffee. If you have feedback please let me know. I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

  • The Top 5 Secrets of Sector SPDR ETFs

    We talk a lot about individual stocks in the blog, today I'm sharing 5 'secrets' on how to use sector SPDR Exchange Traded Funds (ETFs) in your portfolio! This information has made me lots of money in the stock market, it's a long post, but I can assure you that I'm giving you information other's charge lots of money to explain and I'm keeping it simple. These 11 ETF’s divide the S&P 500 (SPY) sectors. (Visit the SECTOR SPDR ETFs website for more information! A few of the graphics came from their site as well) There are pros and cons to using sector ETF's so identify you trading strategy and your narrative by asking yourself if you want broad exposure, or do you want a single stock. 1 Cons to consider about sector ETFs These ETF’s will likely not move as quickly as an individual underlying since they contain multiple companies. This isn't always a bad thing, but it can be. Let's look at XLF for a real life example of when I traded a single stock over the index. I posted this all in our discord, but I didn't explain the logic with as much detail as I am today! These are the top holdings for XLF During the "banking crisis" of 2023 I was purchasing JPM over XLF or KRE. I think JPM is best of breed in the banking sector, I didn't want exposure to other banks or financial institutions. Look at the chart below of XLF combined with the orange line which is JPM stock. JPM dipped just as much as XLF but it out performed XLF and as of today it's outperformed by almost 30%! This single decision to buy JPM made me more money than my annual salary working at a corporate job. I wasn't trading questionable banks, I wasn't buying the sector ETF because I knew best of breed outperforms! Remember this, it will happen again, perhaps a different industry, but capitalize on this! 2 Pros of Sector ETFs Here's an example of when I'd rather trade a sector over picking individual stocks! XLY is consumer discretionary stocks, the top holdings are: Consumer discretionary should drop as consumer’s start feeling the effects of rising interest rates, and possible inflation. You know the current environment we are in today! Instead of looking for individual retail, auto, hotels, apparel, etc. I wanted broad exposure to the entire sector. These two shorts in the past 2 weeks paid for a beach vacation, and paid my utility bills for the next two months. I took both of these trades in our discord, do you have a better understanding of why? This blog post explains why and how I use moving averages, so that’s how I “picked” my targets. Do you realize how easy this thesis is to make on your own? People pay thousands of dollars for the information I'm giving you today. I've made $100,000's of thousands of dollars doing what I'm showing you. No it doesn't always work, but you miss 100% of the trades you don't take. 3 Using Sector ETF's to hedge expensive stocks: If you don’t own 100 shares of a META, and earnings are coming up and you want some downside protection, consider a put vertical in XLC. Do you see how XLC’s top holding is META? This is a simple put spread on meta for earnings this week. IT would cost you 255 for a max profit of $245 This is similar protection in XLC that can make you $285. Yes, XLC will not move as much if META has a big decline, but look at your delta in both trades and the cost savings! Do you see how this is good for traders who have less than 100 shares or maybe want to speculate a bit? 4 SPDR ETs Pay Dividends: Did you expect me to write a blog post and not mention dividends? Afterall these are a key part of my trading. I have a complete series on dividend stocks. Sector ETF’s pay dividends! Just be aware there is an expense fee of .1%, but XLRE and XLE both yield over 3%. Here's a chart on XLE Side note: a possible trade idea as I think XLE is about to wave 5 higher! Maybe you could consider setting up a bull call spread! The dividend is quarterly so next dividend isn't until June, at which point you could buy some shares before the ex-div sell a call? Buy Writes are less volatile than a single underlying. That is a plus, just realize the covered calls often doesn't have as much premium as a single underlying. For every positive there is generally a negative in the market. Smart people make the markets! 5 Using SPDR's to speculate on market cycles: I’ve discussed how the market moves in cycles, so as money flows out of one sector, it generally flows into another sector. These individual ETF’s give you broad exposure to a sector, instead of all 500 companies in SPY. There are many different cycles and theories, from seasonality, economic, political, even psychological cycles that you can study. Sector ETF's give you an easy way to make an educated guess and get the exposure you think will make you money. You buy and sell (short) shares in these ETF’s but they have options! All normal strategies we discuss at Goodkidstrading for an underlying apply to the ETF, you can sell puts, trade spreads, the option aren’t always as liquid, but these are a good alternative in some situations. -- If you made it this far BRAVO! There is so much focus on individual underlying's that sometimes traders forget about the more boring ETF’s. I encourage you to build a watchlist of all 11 sector ETF’s, There are other ETF’s that should also go on this watchlist, I will cover that in a future article, so make sure you subscribe I’ll see you next week here at the blog. I'll see you much sooner in our discord if you want to sign up! Happy Trading Good Kids These blogs take hours for me to create, I'm sharing information that has taken me years of experience and expensive coaching. If you enjoy this, perhaps you'd consider buying me a coffee. If you have feedback please let me know. I'm here for you! None of this is trading advice, it's for your education in hopes you can make money in the market as I have done. I’m basically just some dude on the internet who’s been trading 2 decades, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!

  • Should you be a trader or a long term investor?

    Investing for the long term is relatively straightforward: you let time and compounding work in your favor, and you simply wait. As Warren Buffett famously said, "The stock market is designed to transfer money from the active to the patient." But what if you could make trading more passive? At Good Kids Trading, we emphasize having a plan that leverages a high probability of profit while using math to your advantage. Does it work every time? Absolutely not! Nothing does. However, there are some similarities in math-based options trading and longer-term investing that I just can’t ignore, and I don’t think you should either! Do you remember when you were a kid and you wanted to go outside and play, but your mom said you had to clean your room first? You’d throw all the clothes and toys under your bed, then proudly proclaim “done!” That happens with traders, too. You see the “profit porn” all over social and trading communities: bragging about doubling their accounts, talking about how well their funded accounts are working for them. But you don’t see what’s under their bed, or the pile of losses stuffed in their closet. Short-term trading can be emotionally taxing as you buy and sell on a quicker timeframe. Some traders consistently profit over the years, but many realize that buying low and selling high in the shorter timeframe isn’t quite as easy as it seems. If you invest in a company that is growing and making money, over time you’ll likely make money as the shares appreciate (and possibly collect dividends). Trading on a shorter timeframe does have the potential for more wins, but you can also incur greater losses. Every time you lose, your next trade needs to make up for the losses before you start making profits. This is why we stress looking for more than a 1:1 reward-to-risk ratio on trades. If you want to be a day trader, no problem. I've explained why day trading is not for me. But don’t hide all your losses in the closet and keep adding more money as the hole gets deeper quickly, leading you to think trading is impossible. Consider combining statistics and probabilities, aka math-based option trading, to find an edge. Selling puts is my favorite strategy because I can be wrong on a trade and still get a second chance since shares never expire. Even if the put sale goes against you, all you have done is bought a stock lower than you would have initially. As the legendary investor Charlie Munger put it, "The big money is not in the buying or selling, but in the waiting." When you have trades that benefit from theta decay, you get paid to wait! If you incorporate trades like put sales into your toolkit, you get a second chance. I believe there's a better way than solely investing for the long term, but it depends on your time horizon and your willingness to learn and execute a trading plan you believe in. To be a profitable trader, you have to avoid the trap of hiding your losses under the bed so you can go outside and play with your friends. If you're interested in learning more about math-based options trading, you’re in the right place. Good Kids Trading is focused on making trading simple and profitable for people who are busy living life! We aren’t chasing huge returns or trying to time every trade perfectly. We’re focused on trading for passive income and living our best life. If you need help reach out to me, join our community. I’ll see you here next week, hopefully I’ll catch you in our Discord much sooner than that! 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!

  • Why I don't Day Trade: 4 Factors that Influence My Decision

    I was sitting in my office and glued to my screen. I was watching every single candlestick on the 3 minute chart. Just waiting for AMD to hit my target. I knew a winning trade was a sure thing because it worked the previous two weeks. "I cant lose" I thought (famous last words). For these 30 minutes, I forgot all about my regular paycheck from the corporate grind. I wasn't focused on the reports or spreadsheets. All my focus was on my mental ability to control a candlestick's direction with my mind. I was attempting mind control second by second, "go down AMD" I was sending through mental telepathy. Then bam, the stock blew right through my stop loss. I didn't have mind control over the candles after all. The foolproof 'can't lose strategy' that worked so well for a month, never worked again. Losing isn't unique to day trading, but after I left the corporate world a few years ago to trade full-time, I don’t day trade very often. People assume that since I don’t day trade that means I’m totally against it. That's not quite true; let me explain. It's not just about the market; It's about YOU- Trading isn't one-size-fits-all. It's about how much time you're willing to invest in front of the screen, mastering candlestick psychology, and back trading to master technical analysis. Successful and profitable trading comes from a plan you believe in and strategies that match your lifestyle Yes, day trading can be profitable, but for me it was a full-time job, demanding my presence and attention. When I was already at my desk, it was an viable strategy. I was already at my computer, I could look for the perfect setup and take trades. If you are already busy, are you going to consistently show up every day and watch the charts? Are you going to study and back trade on a regular basis? Trading can be active or trading can be passive. What works for me, might not work for you! The challenges of a tight timeframe- On a shorter timeframe, your stop loss is on a tighter leash. This shorter timeframe is another reason I don't enjoy day trading. You need to keep up with news, who is speaking today, and many times none of that matters because a single news flash causes a crazy wick that ruins a trade in seconds. It doesn’t matter if the news was even true. I’ve found that longer term trades are easier for me to manage in most cases. Smaller timeframes, smaller stops mean I need to be right quick and it felt more like I needed luck, which equates to gambling in many ways. When the market trends, day traders thrive- Day trading works best (for me) in trending markets. Just like any other strategies everything works just not all the time. Remember 2020 when the Fed's cash injections caused the V bottom correction and everyone, including their grandparents were day traders? In a trending market, a trend following strategy works. But what happens when the market stalls, or if it dips and inflation becomes a concern? Those same day traders, either pivoted, or went back to their other ‘real’ job. If you want to be a day trader you need to have multiple tools in your trade plan. When the market is trending, this is a great time to be a day trader! Don't close your mind from ever day trading, just wait for the right conditions. Keep doing what works, just don't think you should double down on a strategy that stops working. The lure of 'good enough' trades- You're sitting there, waiting for the perfect setup, and boredom creeps in. Suddenly, 'good enough' trades start looking tempting, and you're making moves out of impatience rather than insight. When you get bored, you take trades you don't normally would not take, because you aren't even around to see the charts. The best way to avoid good enough and what works best for my lifestyle are taking longer timeframe trades and to trade high probability math-based options trading, It's a game of probabilities offering a more passive income stream that fits my life. Just because day trading doesn't fit into my style it doesn't mean anyone else should or shouldn't trade a strategy. Day trading might promise bigger profits, but it also has potential for bigger losses. For me the time commitment to watch the charts every day, candle by candle impacted my most precious commodity—time. We have a finite amount of time in this journey we call life. I want time freedom over larger profits. What's right for me might not be right for you. I choose to take trades that have high probabilities of winning. With many options trades I don't even have to be totally right. That's why selling puts is my favorite strategy. When the time is right, you just might see me taking day trades and posting them in our discord! But until I see a nice trending market, I'm sticking with my passive and profitable strategies! If you need help reach out to me, join our community. I’ll see you here next week, hopefully I’ll catch you in our Discord much sooner than that! 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!

  • Top 5 Obstacles Traders Face and How to Overcome Them

    Today Good Kids Trading (GKT) is identifying 5 common themes that hold you back from being as successful as you want in the stock market. Let's identify and then solve the most common problems so you can make the stock market a bigger source of income and find the time freedom that you so deeply crave! Here's a quick video of today's blog, I've also posted an entire thread in our discord to discuss these obstacles in more depth! 1. Not taking action - The stock market is so confusing to beginners. It can feel overwhelming even if you’ve traded for a while. It's like staring at a mountain of information without a clear path. The complicated terms, options chains that look like a bunch of random numbers, not even sure what a stock really is, or what is the next step. For years I just traded shares of stock because I quite frankly didn’t know the difference between calls and puts. It was confusing you can sell or buy options. The learning curve in the market can feel steep. Too many people let this learning curve keep them from taking the next step. Instead of trying to figure out a complicated strategy, focus on the very next step. If you don’t understand stocks (or options), spend 30 minutes learning a little bit more about the basics. Just keep taking the next step, do not become a victim to analysis paralysis. GKT is a good source of information without the hype. 2. Assuming there is a better way - You can spend a lot of money looking for the easy button, I did it for many years. Trying all of the strategies that promise awesome returns, thinking some other person or group knew secrets I didn’t know. There are millions of people trying to sell you the “best strategy” I have found and I firmly believe the best way is for you to build a strategy and a plan you believe in. If you follow someone else without understanding, you will end up losing money. Trading is mostly managing your emotions more so than managing your trades. You have way fewer emotions when you understand and believe in your plan. Of course, you will have emotions, but it won’t be the same as following a plan you don’t understand or believe in. 3. Thinking someone else knows - Self-doubt, imposter syndrome, or lack of confidence will get in your way if you aren’t careful. Some of my mentors have seemed so confident in their analysis or opinion they shook me out of trades, or I took outsized risks based on their guidance. Realize that no one really knows. This is not as negative as it might sound initially. Yes, people can have informed opinions, but they can and will be wrong. You need to block out the noise and follow your plan UNLESS they have a point of view or concern you did not consider. Just like I mentioned above, it’s easy to believe there’s a better way or someone knows more than you do, but once you realize that no one really knows anything it’s easier for you to just stick to your thesis and trade your plan. 4. Sticking with the same strategy - Let me give you a ‘secret’ (after I just told you there are no secrets) everything works in the market just not all the time. Just because you (or someone else) has a strategy that is making you huge profits right now, it doesn’t mean it will work next week, next month, next year. The market moves in cycles, the market makers and institutions are really smart. It is not a merry-go-round. Do not overleverage or ramp up just because you have a strategy that is working, you want to make note of what is working in which market conditions so you can start building strategies in advance. Keep learning, don’t get caught up in thinking you have found a holy grail because as the market shifts your strategy should also shift. Keep doing what works, but keep notes so you can stay ahead of the market’s cycles. 5. Trying to go too fast - We’ve all heard the fable about the race between a tortoise and a hare, with the tortoise winning by moving slowly and steadily because the hare took a break. I’ve found this to be true in the market. Everyone is a genius in a bull market, you will see people overleverage and make a ton of money, you will see these same people lose big at the first shift in the market and then they disappear because they blow up their account. Don’t be them. You don’t have to learn complex strategies to make money in the market. It’s easier to add complexity than it is to simplify your strategies. The power of compounding over time is powerful, so if you keep hitting base hits you will get a couple home runs and of course you will strike out as well. If you make your trading strategy too complicated and you keep swinging for the fences every time trading will be stressful, your emotions will ruin your success, and you won’t have fun. Every day I get direct messages, text messages, sometimes even phone calls asking for input and help. These are five principles I stress to everyone because I know trading can be simple if you have the right perspective and build enough experience. I think most traders are still struggling with many if not all of these to different degrees, and that’s why I’m here to help you. It’s time we cut through the challenges and remember we are clicking buttons and making (or losing) money, how cool is that? If you need help reach out to me, join our community. I’ll see you here next week, hopefully I’ll catch you in our Discord much sooner than that! 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!

  • Modest Money Mavericks: Trading a Small Account

    Do you want to learn how to grow a small trading account the Good Kids Trading (GKT) way? Learning to trade options can feel intimidating. When you have limited capital it almost feels impossible! We created a Modest Money Mavericks discord channel to show how we would trade in a small account. Today I'm covering the key points from my latest video, and encouraging you to get educated about how trading the GKT way can help you find some passive income and eventually find freedom from your W2. I'm focusing on stock options, Chance is trading futures. Justin's M$M launch Chance's M$M launch Most of my trading is in a larger account using portfolio margin, which gives me a lot of buying power. It's just a fact that the more money you have the 'easier' it is to make money. Don't be discouraged, I started out with a small account. Modest Money Mavericks is not just a follow me type of challenge. I want to educate you on some of the key things I did to build my accounts. This is not financial advice, there are no guarantees, and best of all there is no charge in the information we're providing! All my guidelines are scalable, meaning they work if you have $8000 or $800,000 in your trading account. The Importance of Diversification: Diversification is key because it minimizes risk. You want to spread your money across a few stocks to lessen the impact of one trade or sector. By trading different sectors you reduce your risk and if one trade is underperforming, another sector might be outperforming. With a small account, diversification is even more important for minimizing risk, boosting returns, and securing long-term success. Strategies for Building a Small Account: Trading a small account requires more careful planning. Understanding you want at least 3 positions means you need to pick stocks that do not use too much buying power. The BEST strategy for growing a small account is regular cash injections! Consistently adding even small amounts of money can significantly grow your account over time. Remember cash is a position. Keep some cash aside as a position to capitalize on buying opportunities. When everyone else is selling out of fear, you will have the dry powder to step in and grow your account! Buy low and sell high. Use the charts and focus on buying stocks near support and sell at resistance levels. Use moving averages and support and resistance to decide when to buy and sell! Understand what happens if the stock goes up, down or sideways BEFORE you enter a trade. Preserving your capital is your NUMBER 1 PRIORITY. You grow your account, by taking trades that have good risk to reward. Carefully managing risk and avoiding oversized risks is not the norm but this is key to become profitable consistently. Regularly review and adjust your portfolio based on market changes to optimize growth, but setup alerts and have a plan in advance. Do not trade out of emotions, be mechanical and methodical in your decision. You do not have to buy at the bottom or sell at the very top. Join us on our Modest Money Mavericks Discord channel to discuss trading strategies for small accounts further! I hope you enjoyed this post and learned something new. If you did, please share it with your friends. And if you want to learn more about trading strategies and how to apply them in different market conditions, join our discord! Subscribe for our weekly newsletter. It's all free! 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!

  • How Much Money is Needed to Start Investing?

    Let’s dive right in on things.  In this article, I will answer the question, “How much money do I need to start investing?” I remember struggling with this question. In fact, almost every new investor thinks that they don't have enough money to start investing. They often times view their account size as insignificant because it doesn't compare to the wealth of the Elon Musk's and Warren Buffet's of the investing world. I'm here to tell you that comparisons like those aren't fair to you. Whatever amount of money you do have is significant and has the power to change your life. Before I answer that question in detail let me tell you a story about how I began investing. How I Started Investing My “career” in the stock market started out as nothing more than a mental break from studying while in medical school. I have “Dr” in front of my name because I ultimately graduated medical school.  I mention this for two reasons: I am not a professional investment advisor.  In fact, I never took any financial courses after high school.  These articles are for entertainment purposes only.  Before you trade real money, make sure you understand what you are doing and are comfortable with the risks involved. All investments carry some degree of risk! I started trading as a side gig and after a learning curve, I can say that I am a consistently profitable options trader and stock investor.  I also currently have a full time W2 job, as a civilian Medical Resident, and continue to trade.  It doesn’t take that much time! During my study breaks, I found that learning about various investing strategies challenged me in ways medicine didn’t.  I quickly realized that throughout any day the stock market was open, literally trillions of dollars are traded.  After a lot of reading, mostly in 15-20 minute chunks, I saw a path towards collecting my very small portion of that money. I just needed to get into the game. If you have the desire to start “working” for yourself and to take active ownership of your financial future, then you must learn how to invest.  Financial institutions want to make it seem more complicated than it is.  They earn their fee by taking the “burden” of your financial future off your shoulders.  Now that transaction fees are exceedingly low, and often non-existent, managing your money just takes a little thought and a few clicks of a mouse. One of the big things we aim to provide at GKT is value to you.  Although it took me hours upon hours of reading articles and books, we want to streamline that process for you.  It took me all that time because there are thousands of people out there with their own opinions and methods of the best way to invest and I wanted to read all of it.  Honestly, a lot of it was time wasted. Over time, I learned several simple strategies that lead to consistent profits.  Join our Free Discord and you can see for yourself how we trade.  There’s no more sales pitch.  No credit card required.  It is literally free. My First Investment in the Stock Market There I was, sitting at a med school library table on August 20, 2013.  In those days it took half a pot of coffee just to get out of bed and the other half to stay awake long enough to memorize whatever I was studying.  No one can study continuously for hours on end day after day.  During my breaks, I read stock articles. Long story short, I knew I didn’t have time to day trade.  I also mistakenly believed options were “too risky.”  I eventually became interested in dividend growth investing which relied upon the power of compounding.  Once I narrowed my focus to dividend companies, Wisconsin Energy Corporation (WEC) caught my attention.  Stable industry, regular increases in dividend payments, and a long track record of paying them all made this stock interesting to me. On that life changing day in August, I set up an account with because it only required an initial purchase of $250 and they didn’t charge transaction fees. In 2013, EVERYONE was charging transaction fees of at least $10 to buy and $10 to sell any amount of shares. So finding this free service made things possible. Today, you can do this same thing in any maker broker. I also signed up for $25 monthly recurring investments in WEC.  Though this startup cost was a stretch, I was able to fit it into my budget.  That $250 bought me 5.976072 shares of WEC.  Two months of automatic investments later, I put in a total of $300 and I received my first dividend check for $2.75! If you've ever found money on the ground, you know how I felt in that moment. I was literally over-the-moon kind of happy. This tiny dividend represented my first steps towards financial freedom. My investment strategy relied upon compounding interest, so I signed up for the automatic dividend reinvestment plan which was also free.  That $2.75 bought me another 0.066209 shares!  I still have my first stock spreadsheets where I kept meticulous records. Because I was investing regularly, each subsequent dividend check was bigger than the one before it. Keep in mind the time requirement of this strategy. Once I set up my account, I did absolutely nothing and I was making money. How Much Money do I Need to Start Investing? Start investing with what you can afford.  I started with $250 and that earned me $2.75 after 3 months.  That isn’t a get rich quick type of money and I’m not here to convince you that it is.  What I am trying to convey to you is that no matter how much money you have, start with what you can afford to lose. Here at GKT we are VERY transparent.  In the name of transparency, let me break it to you now, you will make mistakes in your investing journey.  You will have to learn some lessons the hard way and you will lose money.  I know this because I made MANY mistakes which caused me to lose money.  I survived and so will you. When you start your investing journey, start so small that if you lost everything you’d still sleep fine at night.  Make your mistakes when your account is easily replenished.  If I lost $250, I may have had to use store brand coffee instead of Folger’s for a while, but I would have made it. The Outcome of my WEC Investment My first quarterly dividend with WEC was $0.3825/share.  At the time of writing this article, WEC $0.835/share every quarter, or 218% more.   I've also invested more money throughout the years and the dividend checks have grown to a meaningful amount. Don't scoff small beginnings. You Can do This Too I share this story to say that you can absolutely do this too.  Investing in yourself and in your future can change your life.  You must take active ownership of the process.  Start small with money you can afford to lose.  A $2.75 dividend check wasn’t a large amount of money then and it isn’t now.   The incalculable value of that $2.75 came from the knowledge that I too could earn money in the stock market.   You don’t have to do this alone.  Join GKT and start your investing journey today! 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 to generate income as my side gig. None of this is financial advice it’s purely educational!

  • Reflecting on 20+ Years of Trading: From Novice to Full Time Trader

    This week I’m celebrating my 44th birthday and the 19th anniversary of Mad Money both coincidently on Thursday. This post might stir up some controversy, but it shouldn't. I know Jim Cramer has a bad reputation with some traders, but you can learn a lot today if you open your mind. So my question to you is: “Are you ready ski daddy?” If you are new to trading Jim Cramer was formally a hedge fund manager who is now a well-known television personality. He's the butt of many jokes and meme’s showing where he is absolutely wrong. The hype is so real there was an ETF fund Short Jim (ticker SJIM) started that shorted everything Jim was bullish on, but apparently they lost so much money they shut down. I couldn't help but laugh at them closing the fund. You see Jim is a big part of the reason I'm as successful as I am. Let me say that again, the guy that so many people make fun of helped make me a millionaire before I was 40 and gave me the freedom to leave my corporate management gig behind forever. I can't give him all the credit, but I know he helped me immensely and you probably wouldn't be reading this post if it weren't for Mad Money. How can this be? I remember the first time I saw Jim’s show just like it was yesterday. I was 25 at the time, this guy had his dress shirt sleeve's rolled up past his elbows, playing sound effects like "buy buy buy" and "sell sell sell," using works like booyah, ski daddy, and FANG on a network where people are normally wearing suits talking about boring weird reports that don’t mean a thing to my main goal of making money. I just wanted to make money Like every other trader/investor - I just wanted to make money in the stock market. Normally when I would watch CNBC I thought "What do you mean the unemployment number ‘missed’ by 10,000?" I didn't know why stagflation was a problem. What does that even mean to my portfolio? I thought: "Can someone just tell me which stocks I can buy today to make money tomorrow?" Enter Mad Money Jim caught my attention because his show was entertaining, but it was also useful to my goal of making money. He was taking calls from people like me, and giving buy/sell/hold recommendations on individual stock tickers in under 30 seconds for everyone to hear. I admit the show felt different back then compared to today. I don’t know if it was my naivete of my 20's, but I believed the opening of the lightening round where he said: “I do not know the name of the caller or the stock” it seemed to me he really didn’t know what people were gonna ask. Its obvious he knows now, and the show has changed, but what hasn’t changed the last 20 years? Mad Money taught the basic fundamentals mixed with entertainment. It was not just stock picks, there was education about doing your homework, diversification, risk management, building watch lists, a building a grading system for stocks in your portfolio. Actual real information that I could use, at the level that resounded with my thought process and the profit/loss of my portfolio. Leveling up Mad Money built a foundation that helped empower me to make MAD amounts of money. Through the entertainment and the follow me trading Jim taught me to become my own trader. As most traders make jokes and take stabs at the guy who gives his opinion on national television 5 days a week for more than 19 years, I'm expressing my gratitude to Jim and Mad Money. Happy Birthday Mad Money! I hope you have a better understanding of why I won’t be shorting Jim Cramer. I won’t blindly follow him, although I don't blindly follow anyone and neither should you. My Vision for GKT I want Good Kids Trading to be entertaining, yet educational. You shouldn't follow our educational trade ideas blindly. You should figure out why we are posting the trade ideas and figure out how you can build a trading plan. We are helping you build a foundational understanding while learning to make your own decisions and finding your trading style. Trading doesn't have to be stiff and boring. My goal for you is to become be more successful than I have been. I will admit you have some big shoes to fill, but I know without a doubt you can do it, and GKT can help you. I can’t possibly end this blog without ‘borrowing’ the ending of Jim’s show and yeah I have it memorized… I like to say there is always a bull market out there somewhere and promise to try to find it just for you right here at Good Kids Trading. I’m Justin Maxwell and I’ll see you tomorrow in our discord. If you haven’t joined our discord, you should it’s free. Look for my weekly email update on Friday straight to your email inbox. I have a cool story about navigating the market during the Covid Crash 4 years ago, you can subscribe here. No Spam, No Scams, No Cost! Happy Trading Good Kids!

  • Weekly Technical Doji Rundown

    Doji's indicate indecision. I look at weekly charts every weekend.. Here are some interesting weekly charts I'm watching. Not much text just some charts and a quick description. SPY- pretty weekly doji candle. are we going to break up or down? MS- look at that consolidation, some hammerish candles ending in a nice doji... Higher? I try to avoid pharmaceuticals, but this looks cute: Cloudflare doji: cute candle on Delta, is it going to breakout higher? is carnival cruise going to leave the port? I'm already in so i hope so. Cardinal health going to continue to rip higher? EBAY looks like it might continue higher XOM going to break out of this little range?

  • Using Delta to Enhance Your Options Trading

    Delta is a fundamental Greek we focus on at Good Kids Trading (GKT). If you want to make successful options trades understanding delta is crucial! Delta measures how an option price will move in relation to a one-dollar change in the underlying stock price. I like to think of delta in terms of MPH of a car. The higher the delta, the faster the option price moves as the underlying moves. But we use delta for more than just trading individual options, let me explain. Decoding Delta: Essential Insights for Options Traders For calls, the range of delta is from 0 to 1. A delta of 0.60 means that the option price will go up or down by 60 cents for each dollar that the underlying stock moves. On the other hand, for puts, delta ranges from -1 to 0. A delta of -0.532 means that the option price will increase by 53 cents if the underlying stock moves down by one dollar. We can also use delta to indicate the probability of an option being in the money (ITM) at expiration. If we sell a put that has a Delta of 30, it indicates a 30% probability of the option expiring in the money. As premium sellers, we want options to expire out of the money, so a lower Delta corresponds to a higher probability of success! If you're thinking about selling a covered call and want to know the probability of the stock reaching the strike of your covered call you can check the delta of the call option. Let's look at this example: If you wanted to sell a covered call on your Apple shares at 180, you can see the delta is .25. This means there is a 75% chance this call will expire worthless. To be clear, we look at more than just delta when selling calls at GKT, but I want to illustrate how delta works. If you want to read more about covered calls checkout this blog I wrote with all my "secrets" delta is a very important factor I consider as well. By adjusting the expiration date you can see how the probability changes. The call in the example above expires in 45 days. What happens if you choose a closer expiration date? This covered call that expires in 10 days, as you can see the 175 strike is the closest to .25 delta. So the strike moved by $5. The premium collected also changed. Delta of options are impacted by many factors including days to expiration. The more time you have on an option the more time (Theta) and uncertainty (Volatility) is priced into the option. GKT uses delta for our put sales as well! If you're interested in buying the dip on Apple and you want to know the probability of getting shares (based on delta) you can look for a strike in the -20 to -30 delta range. Meaning there is an 80-70% chance this option expires out of the money. You can see that the 160 strike put has an 80% chance of expiring worthless, and the 165 strike put is closer to 70% in terms of expiring worthless. We do not just look at delta when selling puts, but it is part of our consideration! Read more about how I generate income using put sales. Understanding Exposure to Market Movements Delta can be used as a share equivalent to measure directional bias or exposure. A position with a Delta of 40 would behave like owning 40 shares of stock, even though the contract is for 100 shares. Keep in mind that shares never expire, and options always do! Conversely, a Delta of 80 would feel more like the full contract size and weight. You can monitor your options delta to understand how your position compares to owning shares of stock. Delta of your Entire Portfolio At the portfolio level, Delta provides a broad market view of directional exposure. For example, if portfolio deltas were 200 and beta weighted to the SPY, it would suggest an equivalent of owning 200 shares of SPY in the overall portfolio. This is a powerful way to determine how much you account will move up or down as SPY moves. We will write an entire article on portfolio hedging. In the mean time you can checkout our discord and you will see why I sometimes setup put spreads to hedge my delta when the market looks like it might pull back! I monitor my total delta's and I add put verticals (which have negative deltas) to help my account from moving as much. I'm looking to neutralize my deltas! Navigating Returns with Delta in Options Trading Delta's relationship with returns is a classic give-and-take dynamic. Selling options with higher Delta values, such as 45 (meaning close to the share price) over a 30 delta option, will generate higher returns. This is because options with higher Deltas have higher premiums. However, this higher return comes at the cost of a lower probability of profit and more risk that your option expires ITM. Deltas represent probabilities, and selling options with higher Deltas means accepting lower probabilities of profit. You know I love to sell strangles, I wrote why I love strangles to reduce my cost basis now that we've discussed delta, you understand that selling a 20 delta covered call and a -20 delta short put has a better chance of expiring worthless, than a 30 delta covered call and a -30 delta short put. Of course selling a 20 delta strangle pays less premium, there is no free lunch in the stock market. Mitigating Risk with Delta Management The stock market is random and unpredictable, and as option traders, we have a number of advantages to mitigate risk. When it comes to Delta, the key to reducing risk is controlling your size. Whether at the individual position level or the overall portfolio level, it is crucial you make sure your Delta is manageable. Understanding our directional exposure is essential in managing risk. It's natural to have a bias and take positions based on hunches, it's important to remember that the market is unpredictable. Staying small and staying informed about Delta can help you control your risk in this uncertain market. Understanding Delta allows us to assess the potential movement of option prices as stock prices change. Delta serves as an approximate probability gauge and a share equivalent to measure directional bias. When it comes to returns, Delta can help us determine the optimal options to sell. And in managing risk, controlling our Delta and understanding our directional exposure is key. By staying small and being equipped with the knowledge of Delta, we can make better decisions in the options market. I hope you enjoyed this post and learned something new. If you did, please share it with your friends. And if you want to learn more and how to apply them in different market conditions, join our discord! Subscribe for our weekly newsletter. It's all free! 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!

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