August 11th, 2024 Lessons from Monday’s Market Bloodbath Last week, I mentioned that August roared in like a starving bear. Full article here  Little did we know that the bear would continue its rampage into Monday morning, leaving many traders panicked. I wasn’t spared from the carnage my account took a drawdown as well! The cause? Speculation points to a Japan carry trade and some ETF inversions, but I don’t think this blog should focus on news, you can get there anywhere, and we can talk about that in GKT’s discord! The real issue is how Monday’s savage market moves tested our portfolios. I talked about mentally stress-testing our strategies last week, and Monday turned out to be the real-world version of that test. Look where we bounced… Right where I mentioned last week on the 50 weekly EMA?  This isn’t about being me right or wrong; it’s about having a good gameplan while building your trading playbook:   What if we hadn’t bounced on the weekly 50EMA, what would your portfolio have looked like?  If you haven’t read my article on moving averages and how I use them to trade, this is yet another example of why you should: read the full article . I don’t know if we’re totally out of the woods here, what if we head down to the 100 EMA on the weekly? These are the scenarios you need to be prepared for, mentally and strategically. For all I know we go back to new highs, that’s possible too. We can also chop around until the rate cuts and election. THINK ABOUT IT NOW… This isn’t doom and gloom—it’s reality. As I mentioned before the VIX spike, stress-testing your portfolio isn’t just a good idea; it’s essential. Trading is as much about mental resilience as it is about numbers. You need to be ready to buy more at lower prices, sell higher, and avoid getting liquidated when the market turns against you. Is your account sized to withstand drawdowns? Everyone experiences them, even seasoned traders. My account took a significant hit, even with hedges in place. That’s part of the game, and it’s okay. It will recover, and I managed to profit as the market dropped. I was buying as accounts where getting liquidated. Selling puts and buying shares of dividend companies. Mr Money Maxwell Inner Circle  members specific dividend stocks I like, you should join  if you want even more of my insights, it’s less than $2 a week at the introductory price. Prices will go up next month. The core philosophy at GKT remains the same: Trade often, trade small, and trade mechanically . No one knows if we’re heading for another pullback or all-time highs. Choose some indicators and tools  to make a plan. I rely on moving averages , support and resistance levels, and years of experience, to navigate these turbulent waters. Whether this was your first major drawdown or your tenth, learn from it. Don’t give up. I’ve been through countless market swings, and each one has taught me something new. I’ll continue to share these lessons each week, helping us all grow and improve as traders.   Your Turn: A Personal Request If you had a key takeaway from Monday’s drawdown, I’d love to hear it—. Please email me  and share your thoughts. If you’re enjoying this blog, please share it with your friends and encourage them to subscribe  to GKT’s free content! If you want to support what I’m doing and gain access premium content, consider j oining Mr Money Maxwell Inner Circle . Since this is a soft launch, you can get in at an introductory price 99.99 a year!       Navigating the Rate Cut: Soft Landing vs. Hard Landing As we move closer to September, one of the biggest questions on every trader's mind is: What will happen when the Federal Reserve decides to cut rates? Understanding the potential outcomes will help us better prepare and position our portfolios. Let’s explore the basics of the two main scenarios— Soft Landing  and Hard Landing —that we might face in 2025. 1.       Soft Landing: The Goldilocks Scenario  In a soft landing, the economy continues to grow, but at a slower, more sustainable pace. Inflation eases off without plunging into a recession, and unemployment stays low. This is often referred to as a “Goldilocks Economy”—not too hot, not too cold. a.       M$M Inner Circle members - check your email for the trade ideas. 2.       Hard Landing: The Recession Risk  The hard landing scenario, on the other hand, is more severe. Here, rate cuts signal that the economy is entering a recession. Growth slows significantly, unemployment rises, and inflation risks turning into deflation. a.       Mr Money Maxwell Inner Circle members get my trade ideas! What’s Next?  Understanding these scenarios helps us make informed decisions as we move closer to the Fed’s rate cuts. While a soft landing offers the potential for continued gains, a hard landing requires more caution.  If you’re looking to dive deeper into these market regimes and explore trade ideas and how I’m navigating them, I invite you to join my Mr. Money Maxwell Inner Circle.   3 Alternatives to Selling Naked Puts: Profiting from Pullbacks Have you checked out my latest blog on strategies beyond naked puts? This week, I had some solid wins with put ratio spreads, as well as 1-1-1 and 1-1-2 put spreads. I write these blogs because I genuinely believe they add value to your trading journey. The strategies I share are the same ones that have brought me freedom and consistent income I enjoy today. I hope you not only read the blog  but also put these strategies to work and saw some profits.   For instance, my CAVA trade: I entered with an $0.85 credit, and after closing it, I walked away with $2.15. The stock market doesn’t have to be complicated when you approach it with the right mindset and realistic expectations.   If you haven’t already, read the blog, follow my trades in Discord , and start making money. Let's keep things simple and profitable, team!   Index Updates SPY- When we look at this week’s close and last week’s close this week ended up being was a wash. I know it doesn’t feel like that, but it’s pretty interesting we basically closed the week where we ended the week before. Quite a bullish recovery, are we going to have a retest? Was this a major over reaction? QQQ- Tech bounced right on the 50 EMA. Tech actually ended above last weeks close. VIX-  Volatility was the biggest story. This level of VIX hasn’t been seen since covid. This was the time to sell premium! That’s exactly what the Good Kids did. IWM- small caps were hit really hard, do you notice how previous resistance acted as support? It’s SO important to pay attention to these things. Could you have bought there? Looks like people did. TLT- Treasuries took a bit of a hit this week. Did you see that Warren Buffet owns more Tbills than the Federal Government, not exactly what TLT is, but still interesting. GLD- inside week for gold, the 10ema is acting as support. SPYD- Dividends held up pretty good this week overall. I’m still bullish dividend stocks.   Ex Dividends (Inner Circle Trade ideas) Mr Money Maxwell Inner Circle members check your emailed copy for this week’s trade ideas! Not a member? Join now during the introductory sale for more trade ideas Dividend Aristocrats: Dividend Kings:   The week ahead: We’re back to CPI and Jobless claims this week. Market will be looking for weakness in CPI and wants to see the strength in the job market as these are key metrics the Fed and Jay Powell monitor in relation to rate cuts.   Another week of earnings, not as many companies, but some interesting names: This was a lot to type, I'm sure it was a lot for you to read. If you made it this far I appreciate you and hope it provided you value. Until next time! Happy Trading Good Kids! -$Maxwell For more insights and real-time market updates, join our GKT community on Discord . If you need personalized help, schedule a 1:1 intro call using my Calendly link . This is not trading advice, it's for your education. None of this is financial advice. Any trades or decisions you choose to make are at your own risk.

We've never seen anything like this! This is going to change everything! This week, we saw a volatility expand like we haven't seen in a long time, this is VIX chart: VIX went from 15 to 65 in 2 days! Some are calling it Volmageddon. Many were panicked, and the market saw significant selling on Friday and Monday as overleveraged traders scrambled to regain control before losing it all. The sell-off is attributed to firms leveraging Japan's low interest rates to invest in U.S. stocks and crypto. When Japan raised its rates, these firms were forced to unwind their positions, compounded by news of Warren Buffett unloading half of his Apple stock and growing fears of a potential U.S. recession. This shook the market, but in a few months or a year, will most people remember this? Only those who lost substantial money. It’s a timely reminder of a crucial lesson in trading: the most expensive words on Wall Street are, "This time is different." I've seen this throughout my trading. From the tech bubble of the '90s to the financial crisis of 2008, the pandemic of 2020, the flash crash, and 2023's "banking crises"— I've traded each one of these, and there were so many more... Do you remember the flash crash? See I almost forgot... Each "panic" has different contexts, but the underlying patterns remain consistent. People often claim "this time is different" to justify their strategies, decisions, and mistakes, seeking to de-normalize what is, in fact, a normal part of market cycles. The human psyche is fascinating. We’re drawn to headlines proclaiming, "This time is different," because they tap into our primal fear instincts. The fear of losing and the belief that this time might truly be different can be overwhelming. But it's essential to recognize that there’s a 99% chance this time is no different than any other. Think back to the COVID-19 pandemic. Whether you were trading or not, it felt like a truly unique crisis. Here we are a few years later, things have largely returned to normal. It's important to not forget lessons learned each time this happens, one of the biggest lessons is this time really is NOT different. The stock market’s reaction on Friday and Monday is being described as unprecedented or something not seen in X number of years. This rhetoric often justifies over-leveraging and sidestepping best practices. Consider this: If you hear, "This hasn’t happened before" or "This hasn’t happened since," remember that it doesn’t necessarily mean this time is different. Everything works until it doesn’t. Taking risks and engaging in arbitrage is part of trading, but over-leveraging is dangerous. I discussed this last week : mentally stress test worst-case scenarios. This time probably isn’t different in many ways. Those who over-leverage often get liquidated at the bottom, only for the market to bounce back. During the 2008 financial crisis, many investors believed the market's collapse was unprecedented. They over-leveraged, thinking they were seizing a once-in-a-lifetime opportunity. Unfortunately, many were wiped out when the market hit rock bottom. Those who stayed cautious and managed their risks were able to weather the storm and benefit from the eventual recovery. Does this scenario sound a little like what we saw this week? Over leveraging because this time is different. This has never happened, so this time is different. This time is not any different. Recognizing that "this time is different" is probably not true will transform your trading strategy. Instead of reacting to fear and hype, you’ll maintain a balanced approach, you won't over leverage, you will think about worst case scenarios. Put sales on companies you can afford to own lower is a great strategy. This mindset will help you avoid costly mistakes, manage risk effectively, and stay resilient in the face of market volatility. Here’s what you can do right now to protect yourself: Stay Grounded : Remember that market cycles repeat. Use historical patterns as a guide, it's more accurate to say the cycles rhyme, because normally there are small differences. Avoid Over-Leveraging : Stick to best practices and don't let fear drive your decisions. More risk gives you more reward when things go well, but be able to handle the other side of the risk. Stress Test : Always mentally stress test worst-case scenarios for your portfolio. It's important to think about the worst case mentally before you have to physically manage your portfolio while you are in a house of pain. Join Our Community : Learning from people who have been trading for decades is valuable. For more insights and real-time market updates, join our Good Kids Trading community on Discord. Do you want my exclusive insights and strategies from nearly three decades of trading experience? Join the M$M Inner Circle . Subscribe now and take advantage of the introductory price! You will get my best content and learn from my experience. Let’s navigate these markets together and avoid the pitfalls of thinking, "This time is different." The world probably isn’t ending, and while the market will overreact, maintaining a balanced and conservative approach is crucial to your success. It's not only about potential profits; it's also about managing risk. Over-leveraging in response to perceived uniqueness can lead to costly mistakes. Remember, the most expensive words on Wall Street are, "This time is different." Happy trading, good kids! - $Maxwell For more insights and real-time market updates, join our Good Kids Trading community on Discord. If you need personalized help, schedule a 1:1 intro call using my Calendly link . This is not trading advice, it's for your education. None of this is financial advice. Any trades or decisions you choose to make are at your own risk.

August 4th, 2024 This blog post is offered for free for all the Good Kids! Mr. Money Maxwell Inner Circle members gain exclusive access to my top 3 watchlists and specific trade ideas, including 3 intriguing dividend stocks I'm currently watching. Join now for an introductory price of less than $2 a week. Introductory sale ends next month! August roared in like a starving, hibernating bear. SPY and QQQ were raided and pillaged like buckets of honey. (Do bears even eat honey? I have no idea). Let’s talk about this week’s market. Jay Powell repeated his usual lines Wednesday we all expect rate cuts in Sept, and the market initially digested it well, leading to a small inside bullish candle on SPY and QQQ on Wednesday. Buy-the-dippers felt pretty good (I know I did). But then Thursday brought a bearish engulfing candle, and Friday opened at levels we haven’t seen since June and proved to be a blood bath for most of the day. There was some fear, but I’m not sure it’s capitulation just yet. Could be a little more pain in store for the Good Kids. Maybe I’m wrong, Hopefully I’m wrong. How did you feel about your portfolio this week? Drawdowns suck, so I don’t expect you felt great. Were you scared, thinking you needed to sell everything? If so, please listen up because it’s possible you are over-leveraged. I’m not saying this to beat you up or make fun of you. Even if you are sized correctly sometimes you just need to close your broker and stop watching your account balance. I want you to consider if you are taking on too much risk or are too overweight in a single position, sector, or strategy. A good amount I’ve talked with are far too heavy teach right now. That’s a problem! We’ve seen pullbacks over the last three weeks on SPY and QQQ. SPY is down 6%, and QQQ is down about 10%. Drawdowns are going to happen, what’s important is you don’t blow up your account. The 50 EMA is a 15% pullback and the 100MA is 27% from the highs. I know 4 bear weeks suck. Don’t be the person who sales your assets for pennies on the dollar because you can’t take the pain. Think about this: Mental Stress Testing Your Portfolio What if QQQ pulls back 5% or 10% MORE? What would your account look like? I’m not saying we’re definitely pulling back that much, but it’s worth considering NOW instead of waiting for it to happen and panicking. What is your next move? Did you read my document on hedging? (Good timing, eh?) I’ve been stressing even smaller trades over the last several months. As the indices climbed without a pullback did your risk antennae go up? I know mine have been (not an actual picture of me ) Think about the following if you had a tough time this week: Risk-Free Returns on Cash: With high rates, there are risk-free returns on cash this is a risk off time. Good Kids have been in SGOV, BIL and cash for a reason. Value Stocks AND Growth Stocks: With upcoming cuts, value stocks will become more favorable. You want more than just tech stocks! We’ve been buying risk off names. Diversification/ Sector Balance: Diversification is key. You don’t want to be in just one sector! Avoid Over-Leveraging: Not over-leveraging when the market is this high is the smart move. Multiple Strategies: Using multiple strategies is crucial. Success in the market is just as much about capital preservation as it is growing your account. Warren Buffett has two rules for us: Rule 1: Never lose money Rule 2: Never forget Rule No. 1 Watchlists Many traders miss out on profitable opportunities because they don’t routinely monitor stocks that fit their objectives. Watchlists are SO important even if you are a long term investor or an active trader. If you're not tracking it, you can't improve it. With experience, reviewing watchlists becomes quick and efficient. You have to make the time for this! My success depends on regular watchlist reviews, and I want to help you achieve similar results. Join the Mr. Money Maxwell (M$M) Inner Circle to access three of my favorite watchlists:  Dividend Stocks: Steady Growth and Income These are my go-to dividend stocks that have consistently provided growth and income. They’re perfect for adding stability to your portfolio, especially during volatile market conditions. Dividend ETFs: Diversification and Convenience ETFs that not only offer dividend income but also diversification. These are ideal for those who prefer a more hands-off approach while still reaping the benefits of dividend-paying companies. Stocks Under $100: High Potential Picks For those looking to invest in promising companies without breaking the bank, this list features stocks under $100 that have significant growth potential. Inner circle members also received 5 steps to getting the most value from my watchlists as well as 3 interesting charts. Now is the perfect time to join at the introductory price of less than $2 a week. Act fast—prices will increase next month. Make it a habit to spend a little time getting familiar with the companies on your watchlists. You'll discover opportunities and gain insights by applying your views to the content at GKT.   July trading is in the books Monthly Candle and key takeaways I wrote last week about many of the top 500 companies in SPY are tech. Look at the heatmap for spy for the past month. See the large red blocks of tech? Hard to miss I know.     Pay attention to sectors that are entirely red and look at sectors that are mostly green. Do you notice how tech rotation continues, but how there are also sectors that are green. Yes, I know this was the last month, we know previous performance isn’t indicative of future returns, but as avid readers you realize I’ve been pounding the table about value stocks (Consumer Defensive, Utilities, Basic Materials and Healthcare) for over a month. Buying high and selling higher is NOT my favorite strategy, but this is why we pyramid into shares sometime . You do NOT have to buy entire positions all at once. Most of us aren’t that good to catch the bottom or top. Please consider dividend stocks in addition to growth. All my tech friends think they need to invest in tech because it’s “what they know” but you also know a lot of the boring companies that happen to be green on this heat map above! And if you don’t know Google/FinViz/Koyfin are waiting for you   Index Updates SPY-  bullish doji on SPY, might not match how you feel if you were an active trader Now lets look at the weekly candles for spy. Do you have recency bias because in the last two weeks as the market pulled back? We’re right back to where we started the month. How does July feel to you compared to the weeks? When you look at the monthly do you see the difference between the weekly? Zooming out and zooming in gives you different perspectives. We ran up the first half of July and pulled back the second half.   QQQ-  Tech continues to be sold off for 4th consecutive week, think about how much the sector has run. Interesting to note we bounced in the area I outlined last week. Do you see why support and resistance is important? Was it exactly on the line I drew? OF COURSE NOT… Tech is selling off because it’s outperformed, people are taking profits because even when a company reports good earnings the bar (of expectations) continues to be raised. These BILLION dollar companies have a hard time meeting expectations. A pullback is healthy, I’m a tech buyer after we get to more of a correction territory. You’ve noticed I’m setting up 1-1-1’s and 1-1-2’s because you can make money in a pullback. IWM- Bearish engulfing this week. Right back at my entry on my swing. Remember small caps often take on debt, so rate cuts are bullish for IWM, July was a strong bullish month, the market is getting ahead of this. The Good Kids were well ahead of this. TLT- Look at the weekly candle on treasuries. We’ve been well ahead of the market on this trade as well. This is not to brag; I’m simply pointing out the market moves in cycles so it’s important to learn the cycle. Why I Love Dividend Stocks For the better part of two months, I've been pounding the table about the importance of including dividend stocks in your portfolio, especially with interest rate cuts on the horizon. They’ve been a core position for me for decades. Some traders think many dividend stocks are boring and are currently overvalued. While I love buying dips like everyone else, sometimes you need to get some exposure even when prices are high. Here's why dividend stocks are a powerful addition to any portfolio: Tax Advantages: Did you know a married couple in the US can earn up to $123,250 in dividends annually and pay zero in taxes? This is a huge benefit that shouldn't be overlooked. (I'm not a CPA, but I encourage you to look it up!) Growth and Income : When you buy dividend stocks at support and sell them at resistance , you not only benefit from price appreciation but also enjoy a steady income from dividends. This combination can significantly enhance your portfolio's performance. Options Income: If you own 100 shares, you can increase your income by selling calls against your shares or selling puts to acquire more shares before an ex-dividend date. This strategy allows you to create your own dividends, who doesn’t love DOUBLE dividends? ETFs for Convenience: You don't have to trade individual stocks. There are many ETFs available that not only provide exposure to dividend-paying companies but also sell covered calls as part of their strategy. Yes, they have higher fees, but they offer a more passive approach. My Watchlists: For Mr. Money Maxwell Inner Circle members, I'm providing a watchlist of my favorite dividend stocks, along with a list of dividend ETFs to consider. This will help you avoid reinventing the wheel and give you a solid starting point for your investments. Review your portfolio and consider integrating these dividend strategies to enhance your trading success and diversify your portfolio. If you’re an Inner Circle member, check out my watchlists and start benefiting from these powerful strategies. If you are not in the Inner Circle join toda y for the introductory price, act soon as the sale is ending this month.     Dividend Stock Ideas I still like the following dividend stocks and I own them in my longer term accounts: but this is for M$M Insiders. Join today for my current favories and 3 stocks I'm watching! Show your support and keep GKT free! Join the M$M Inner Circle Until next time! Happy Trading Good Kids! -$Maxwell

Are you struggling to find profitable trades in a low volatility (IV) environment? Do you typically sell premium but find it less lucrative when options are cheaper? You're not alone. I also face this issue, and it can be frustrating to see your usual strategies yield lower returns. Selling options in low IV conditions do not give us the edge we're used to. The premiums are lower, and the opportunities for rolling out for credits are fewer. This is why we need a different approach to thrive in these market conditions. At Good Kids Trading (GKT), we've always emphasized selling premium in high IV environments because options are priced higher, which benefits sellers. However, low IV environments are a good time for you to consider a strategy we don't talk about quite as much. Let me share a different perspective on how buying options help us achieve success. When volatility is low, options are cheaper since there's less fear and uncertainty priced in. Remember, options have intrinsic and extrinsic value. We're paying for time and fear: So if fear (implied volatility) is less, this is the perfect time to consider buying options rather than selling them. But it's not as simple as just buying anything. Here are 5 keys I consider when buying options: 1. Trade Hypothesis: Develop a strong conviction that a stock is about to move. This could be based on a favorite chart pattern (that link is 7 of my favorite chart patterns), a stock gapping down on great earnings, or a contrarian trade with limited risk. 2. Options Chain : Ensure the stock is fairly liquid. Avoid options with no open interest or wide bid-ask spreads. Liquidity ensures you can enter and exit positions easily. Pay attention to open interest and if the bid ask spread is tight. 3. Time Management : Buy options with at least 30-45 days to expiration (DTE). Options with less than 21 DTE suffer from accelerated theta decay. While longer DTE options cost more, they give you a better chance to capture the expected move before time decay erodes the premium. Do you see how time decay accelerates the closer to 21 DTE: 4. Types of Trades : Depending on your market outlook, you can buy: Long Calls if you anticipate a bullish move. Long Puts if you foresee a bearish trend. You can also explore advanced strategies like Buying Spreads (so buying an option and selling an option at the same time) Buying LEAPS- are call options with expiration dates longer than one year. Poor Man's Covered Calls- buying LEAPS and selling a short-term call option against it. ZEBRA spreads -  buying multiple in-the-money options and selling one out-of-the-money option to create a position with nearly zero extrinsic value 5. Risk Management : Understand that buying options involves a fixed maximum loss—the premium you paid. However, if your trade hypothesis is wrong, these losses can add up, unlike owning shares of stock where you have residual value. If you enjoy the content of this blog, consider joining Mr. Money Maxwell's Inner Circle . Each Sunday, you'll receive a detailed newsletter with in-depth analysis. Plus, you'll get access to exclusive content and videos created specifically for Inner Circle members. Act now to take advantage of introductory rates. While building this community, I'm offering a special rate of $99.99 per year—less than $2 a week—for my best content. This price won't last long. Joining is easy! Visit the website and join today . Your support helps keep the content here at Good Kids Trading free. At GKT, we provide tools, resources, and insights to help you navigate these shifts in strategy. By adopting a buying strategy in low IV environments, you can maintain profitability and stay ahead of the curve. Our comprehensive guides and expert tips will support you every step of the way. Don’t let low IV environments stop you from taking any trades. Embrace this opportunity to learn and adapt your strategies. For more detailed guides and to see me trade in real time join our community's discord of traders who are mastering the art of buying options in any market condition. Happy trading, Good Kids! -$Maxwell I understand the stock market can feel intimidating and complicated, if you want some extra support and guidance, I help people skip levels, schedule a free discovery call with me . Lets talk stocks and see if I can help you! Click on the image below and setup a time that works for you! This is not trading advice, it's for your education. I'm a dude on the internet who’s been trading for 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

What a week in the market, I want to explain this pullback a bit more. This blog is jam packed with valuable insight, but first I'd like to ask for your support. Introducing Mr Money Maxwell Inner Circle! I've started a subscription service , let me explain: Why I'm introducing a subscription: My goal is to keep Good Kids Trading (GKT) free for as long as possible. I spend countless hours creating content and updating GKT's Discord in real-time. While the blogs here will continue, I'm moving some content to a members-only area. Why is there a charge? The subscription fee supports the extensive time and effort I invest in creating high-quality content. It offers you an affordable way to gain more insights from me without signing up for a 90-day coaching session. If you find today's insights useful, consider subscribing to access even more powerful content! What You Get with the M$M Inner Circle: For $99.99 a year (less than $2 a week), you'll receive: My best content, exclusive insights, detailed strategies, exclusive videos, monthly virtual coffee meetings, deeper looks into my trading experience, and much more to come! Subscribe to the M$M Inner Circle Today! Sample of the Value Offered: To give you a taste of the content subscribers will receive, I've added a PDF of my hedging strategy as a free sample on my Gumroad. Regular readers probably understand already the type of content, but just in case you need better idea of what to expect from the M$M Inner Circle. Today's newsletter is an example of the high-quality insights members will receive each Sunday, along with additional content. Good Kids Trading Is NOT Going Anywhere! I'm not much of a salesman, but I hope to see you in the Inner Circle . If not, I'll be right here at GKT as well. The weekend blog's at GKT will be a very small snippet of the full value. Let me help you turn knowledge into wealth: Subscribe Now Let's get to what I am good at doing, that's talking about the stock market. Tech Selloff: How Big is Big Tech? Big Tech took a tumble for the second week in a row, with more aggressive selling this week. On a percentage basis, QQQ had its worst day since October 7, 2022. The word 'big' in 'big tech' is quite literal. Did you know about 31% of SPY’s total weighting is tech? Look at the top 10 holdings of SPY: Other than Warren Buffet and Eli Lilly (hello GLP1), SPY is heavily influenced by technology. Big Tech is BIG, and the law of large numbers is something to study! When tech is being sold off, expect SPY to feel the pressure. We are right in the middle of earnings season which will likely be the key driving force for the week ahead. Magnificent 7 Earnings GOOGL and TSLA reported last week, and both stocks are down on the week. Google had a great quarter, but the stock is down 13% off recent all time highs. YouTube revenue did not meet expectations. Tesla is down 20% but keep in mind the stock climbed almost 60% IN A MONTH. The company is having a tough time selling cars. Elon now says the company is no longer a car company, he’s talking about robots, AI, and robotaxi’s. The market is trying to digest this. So am I because I bought a car from them a year ago this week. Magnificent 7 earnings for next week: 4 of the Mag 7 report this week: Tuesday:  MSFT Wednesday:  META Thursday:  AMZN and AAPL The good news is that MSFT is currently 10% off its highs, META is down 15%, AMZN is down 10%, and AAPL is down 8%. If earnings aren’t too bad, we could see a rebound. However, the environment still leans towards the sell side, with potential sector rotation into more dividend stocks. I prefer when a stock slows down into earnings versus running straight up making expectations even higher. Always think about this for any stock! Are you taking enough risk:   Too many of you are stuck in your heads and scared. I’ve been there too. I walk up a steep hill three days a week because I’m fairly certain steep hills and body fat don’t get along (that’s a different blog). I always see this truck with wheel chocks behind both tires in the driveway and I think about risk management. Is putting the truck in park not enough, what about the emergency brake? “You can never be too careful” he says. I think to myself oh yeah you can. Question for you: Does your trading account’s risk management look like this? STOP being scared of taking any risk, this is why we have stops! This truck is part of the reason I wrote about speculation this week read the full article here . Make some trades, don't let fear take over. Y ou may be afraid of a pull back, I get it, but push through the fear, let me explain more. When I heard QQQ hadn’t been down this much since 2022, I had flashbacks. The 2022 bear market lasted 10 months. It was pretty rough for this full time trader my friends,  SPY dropped about 25% from its highs. Bear markets are part of trading, and you shouldn't avoid taking risks because of them. Let me show you why. You see the decline of 25% (the red box on the left)? Notice the market does NOT go straight down. Look closely you’ll see some nice ‘bullish’ runs as well. You aren't going to time this right unless you are hindsight trader. Hindsight trading makes you ZERO money. People who focus on losses during an account drawdown get nervous. Some can’t take the pain and they sell during the drawdown. Other’s think, as soon as I get back to even I’m getting out! That’s the green box I drew above. The market retest’s the moving averages and they think they were so smart to get out. Then the market takes off 25% ABOVE the previous high from 2022. Drawdowns are normal. The key is surviving without blowing up your account. If you didn’t panic and sold everything when the market retested, you missed out on the 25% breakout. You probably don’t need to put wedges behind the wheels of your truck to keep it from rolling away. You also need to be putting on some small trades regardless of how extended the markets are. Time in the market is better than timing the market. Mr Money Maxwell (M$M) Preview on Hedging Checkout my gumroad product on hedging click here to download an in-depth discussion on why I hedged this week along with an explanation of what I posted in discord! I've made this free for everyone! REMINDER: Soon this extra valuable content will move to Mr. Money Maxwell. I'm not asking for crazy amounts of money— less than $2 a week to continue providing high-quality content Think of it as an investment in your trading education. While you might not be ready to pay $1,000 for a 90-day coaching program, you can get a glimpse into my experience for $99.99 a year - this is a introductory price as I'm building the community. If you aren't ready to subscribe the blog will continue on GKT, just not all my content. Upcoming Dividends: I'm not looking to grab any of these this week, but that doesn't mean you shouldn't. We had a nice trade on LOW last week. I'm focused on earnings this week. Dividend Aristocrats next week: Dividend Kings next week:   Upcoming dividends this week: Earnings for the week: There are so many earnings this week! I can't even list all that I'm watching in this blog, check discord and I'll break it down each morning. Weekly Charts: SPY - Second down week on SPY (keep in mind what I wrote above about tech being 1/3 of this index). I see some support around 520, we have a daily 100 moving average and the weekly 20ema in this area. If we see weakness, that would be our next bearish target. Notice how the volume came in a bit the past 3 weeks? RSI still pretty high. We could see some buying coming in. I'm still feeling a little bearish personally but I have bullish delta and some bearish trades. QQQ - Tech bounced where it should. but it still looks pretty weak. We do have a lot of earnings this week. Notice the evening star reversal? I wouldn't be surprised if QQQ came down to around 445ish, but earnings are a wild card that can nullify technical analysis. IWM- I see compression this week on IWM. I think rate cuts help smaller cap stocks who depend on debt. I've said this for a month now. I'm still bullish IWM as you can see I'm profitable on this breakout we setup 4 weeks ago. TLT- I'm also bullish TLT with upcoming rate cuts. I know I've been saying this for almost all of 2024, but you are seeing why now. Look at this compression! We're holding the trendline of higher lows, perhaps we break out soon. VIX- Look at the weekly doji (meaning indecision) we finally got a spike in fear this week, but the pullback on the indexes weren't quite enough for me to put on any sizable risk. As you can tell from the doji we went from no fear to fear back to right where we started. GLD- continuing to pull back into the range. We have a doji... break above or break below? Week Ahead Busy week ahead. Federal reserve rate decision, expectation is no cut until September. Let's hope they are waiting too long for the first rate cut. Jolts, ADP and Jobless claims. I hope you see how this repeats over and over again. You should start getting a feel for this by now. I'll see you next week. Much sooner in discord . Hope to see you in the Mr Money Maxwell's Inner Circle Happy Trading Good Kids! -$Maxwell

At Good Kids Trading, we're known for our math-based options and technical analysis strategies. But today, I want to talk about a different approach: speculation. Yes, you read that right - speculation! What is Speculation? Speculation is often misunderstood as a risky gamble. But I believe it can be a powerful tool to enhance your portfolio's performance. By definition, speculation involves investing in stocks, properties, or other ventures with the hope of gain, but with the risk of loss. Why Speculate? I've noticed a substantial impact on my trading success, here are 5 reasons: 1. Diversify Your Strategies Too many traders think there is only one 'right' way to trade and often end up at one end of the spectrum. Some go 100% speculative, hoping to triple their account in 90 days, while others go 100% conservative, only taking trades with extremely high probabilities of profit to keep their capital safe. Finding a balance between these extremes is key. 2. Balance Your Trading Approach The mistake many traders make is speculating with their entire account, turning the market into a casino. Instead, strategically align your portfolio so that 90% focuses on high-probability strategies and 10% on speculative trades. The younger you are, the better the case you can make for moving speculation to 25% or even 33% of your account. 3. Scratch the Itch Let's face it, sometimes trading can feel mundane. Speculative trades add an element of excitement to your portfolio, keeping you engaged and motivated. They can also satisfy the desire for risk without turning your entire portfolio into a gamble. 4. Grow Your Speculation as Your Account Grows Building capital is crucial to trading success. The more money you have, the easier it is to make money in the market. For those with smaller accounts, this might be frustrating, but it’s the truth. Keep saving and adding capital to your account. As your account size grows, so does your ability to take both conservative and speculative trades. 5. Rethink Risk Don't fear risk entirely. Speculative trades can lead to remarkable wins, even if they come with a higher risk of loss. For risk-averse traders, I'm asking you to consider taking some speculative trades that have the potential to double, even if they may go to zero. These absolute zero plays are acceptable with a small part of your account. I've had some remarkable wins buying shares of speculative companies. Although I don't normally post these trades to the community I thought it's important to bring it up in this week's blog. 2 Speculative Success Stories Salesforce (CRM) I've speculated for decades. I made money with a then-unknown company called Salesforce back in the early 2000s. I saw an ad in a technology trade magazine and decided to invest. The company was advertising to CEOs of Fortune 500 companies. I assumed if one company adopted their software, others would follow. This speculative strategy worked well for me. Sure, plenty of my speculative trades didn’t pay off. When you allocate only a small part of your account to speculation, it adds excitement and balances your risk profile. 2. Moderna (MRNA) One of my favorite speculative plays was investing in shares of Moderna in 2019. I bought shares at $22 and sold half when the stock doubled to $44, recouping my investment and playing with house money. I then sold covered calls on my remaining shares, generating cash flow while letting the stock appreciate. Eventually, I rode the shares up to $355 before getting called away. Could I have held on longer? Maybe, but the key is having a plan to take profits and manage risk. The point of sharing my trades aren't to brag but to illustrate the importance of speculative trades and having exit plans. Don't sell ALL your shares for a 50% gain when you can aim for a 300+% return. Speculative trades provide significant profits if you let them run and have a strategy to lock in gains. Ready to Add Some Speculation to Your Trading? Two simple strategies to speculate: 1. Buying Shares Buying shares of a company is a great speculative play because shares are like assets and they never expire. Even if you start with a few hundred dollars, as your account grows, your ability to take on more speculative trades will also grow. Depending on your account size you don't have to buy it all at once consider using our Pyramid strategy. 2. Buying Calls Buying calls is another way to speculate, but calls expire. Next week, I'll discuss how I decide when to buy options and give you several guidelines to think through as you decide on shares versus calls next week. Stay tuned and subscribe to get the notification . Start small, manage your risk, and watch how speculative trades can complement your conservative strategies. Happy Trading Good Kids! $Maxwell For more tips and real-time trade updates, join our Discord and schedule a 1:1 intro call using my Calendly link below

Have you ever found yourself second-guessing your trades after a red week in the market? It's a common problem traders face. The market takes a dip suddenly everyone starts to question their strategies. This uncertainty can lead to quick emotional decisions, missed opportunities, and sometimes even losses. I'm here for you friends, this blog is packed with actionable ideas and insight into what I'm thinking and why I'm doing what I'm doing. I study all this and subscribe to lots of paid tools so you don't have to. This blog has bold headings so you can skip to what interests you if the length is too intimidating... (I feel like there is a that's what she said joke here, but lets move on). Red Weeks in the Stock Market Red weeks in the stock market aren’t fun, but they are normal and healthy. Last week, I mentioned that QQQ was outperforming the S&P500 for 2024. After this week, do you see how the market corrected a little? QQQ is down 4%, SPY is down 2%. Year-to-date, there’s now just a 1/2 percent difference between the two. I don't put too much stock into seasonality, but here's an interesting graphic: in the last 16 years, July has been bullish for tech, specifically QQQ.   Are Interest Rate Cuts Coming? What's Your Plan? Do you have a plan for your cash once rates finally start coming down? With SGOV paying 5%, cash has not been trash. The real question you should have already asked is: what’s next? Even if you don’t have cash on hand, ask yourself what people in fixed income are about to do. There’s a ‘rule’ about subtracting your age from 100 to determine how much of your portfolio should be in stocks vs. bonds. So a 40-year-old would have 60% in stocks. This rule is kinda dumb; anyone under 40 shouldn't have significant bond exposure unless it’s a short-term play. You know I believe equities are a powerful tool for building wealth. With rate cuts imminent, most people will not leave their cash in under-yielding products. Fixed income investors will need to redeploy their cash from liquid products to ones offering higher yields regardless of interest rates. What Are Some of the Options? Locking in a guaranteed yield through 10-year bonds and municipal bonds seems like an obvious choice. In terms of equities, consider MLPs and dividend stocks. Here’s how I think about stocks with upcoming rate cuts: If the labor market and growth remain steady and inflation continues to recede, the Fed might decide higher rates are no longer necessary. That’s the best case for equities. But if the Fed is cutting rates out of concern that the economy might be stalling, a bear market or at least a correction may be more likely. I’m looking for high-quality stocks that are well-positioned to continue paying off their debt. Less growth and more value. Uncertainty is a guarantee, so it’s not the time to be afraid; it’s the time to make a plan. Dividends: Upcoming Ex-Dividend Dates Each week, I’ll discuss some dividend stocks. Dividends have been a key source of income for me through the years. These are the ex-dividends for next week (I omitted Monday's stocks since we needed to set them up Friday). LOW  is the only dividend aristocrat. The chart is interesting—do you see the double bottom on the daily? If you don't mind owning Lowe’s long-term, it's an obvious double bottom on the weekly chart too (as shown below). I've always liked shopping at Home Depot so my bias to trading HD is real. How can you double the dividend? If you can afford 100 shares, you could buy the shares and sell a call for next week. Be aware you can lose more than both the call and the dividend in the short term, so be willing to own this for a while. Please have a stop if you trade this, or have a really long time horizon. PFE  has a nice dividend yield, but earnings are really soon after the ex-dividend date. It’s also had quite a run-up into earnings, up almost 20% from its last earnings report. I actually bought some calls right off when it broke through the weekly 200 (the red line). If you read my article on moving averages where I broke down PG you'll realize I'm giving you all my strategies :) I won't be trading PFE for that dividend as I don't think of PFE as a growth stock and 20% is a lot, it could keep running. Just without me. Dividend Trade Ideas: I started pyramids on three dividend stocks this week. As I explained in the opening, I think dividend stocks in quality 'boring' companies will be profitable as people move to value stocks with interest rates coming down! You shouldn't just blindly copy me, but here are my levels on T . did you read my blog on pyramids ? I also like VZ  (I’m already in this stock); this looks nice. Don't own both unless you have a large portfolio, as these are the same industry. Choose one! I started a position in KO ; I’m going with the standard 10/20/30/40% buys as shown on the weekly chart below. I also added a position in ET  (which is an MLP). This yields a nice 7.73%. Be aware, if you buy this stock, you are considered a partner, which gives you additional tax benefits, but you get a K1 for tax purposes, which will show up in the mail in March. So don’t be in a rush to do your taxes. As you see below, this is a standard buy-the-dip. I don't expect all the levels to fill, and that's fine. Schwab Put Sales (A trade taking some heat) What good would this weekly blog/newsletter be if I only talked about winners? This week, I initiated a position in SCHW by selling post-earnings puts in the August monthly expiration at the 67.50 strike. I also legged into some puts at the 60 strike as well. After I sold my puts, Schwab continued to go down and it looks really rough in the short term My thought process here is: a year from now, do I expect Schwab to be higher than it is today? The answer for me is yes. I think of the assets they have under management. I understand their business, even if I’m not happy with the company’s recent login issues and I’ve had a couple of issues with their customer service after being bought out from TD Ameritrade. So yes, I'm down on my positions; half my puts are in the money. I have set up an alert to roll my put if Schwab hits a new relative low. Try to ignore the P/L of the put and think about where you will be taking shares. We're going to roll these puts for as long as we can without taking shares. Not all put sales are going to work immediately. We need to have a longer-term perspective. Remember, shares of a company are an asset! Sometimes our assets take a hit in the short term; it’s up to us to manage them effectively. CRWD and MSFT Software Update Issue On Friday morning, global technology infrastructure took a hit after CrowdStrike rolled out a software update that had a bug. In the pre-market, CRWD shares were down over 25%. The thing I like about the stock market is that when people are scared, I get excited. I know when most people are scared, they rush for safety. When people panic, they will do anything to make it stop without considering logic. In the stock market, that means you have an opportunity to benefit when other people are panicking. When I sold my puts on CRWD, the markets were extremely wide. Instead of choosing a mid-price, I went super aggressive, looking for almost 2% instead of the 1% I normally would get for a strike. Think about it this way: if it doesn't fill at a super-aggressive premium, you can always adjust. For far too long, I was the noob who would settle for a fill at the mid-price or I was even on the other side, where I would just get out and panic. What I saw on Friday morning was how many Windows machines across the world are dependent on CrowdStrike for security. The company reacted quickly, rolled back the update, and communicated with the general public. That is why I initiated positions in both CRWD. I also added a 1-1-2 in MSFT. You read my blog on these right? Oh you watched the video too? I knew I liked you :) Weekly Charts SPY is down on the week, but looking at the daily chart, we are back to levels not seen in 12 days. We have a break below the trend line, a little further to go before we hit the 50 EMA on the daily but since we're at support it's possible SPY can bounce here. QQQ didn't quite hit the 10ema on the weekly. Last week I mentioned a breakout trade of last weeks DOJI. I sure hope you shorted QQQ with me? Purple box is an evening star reversal, but with the 10EMA there I want to see a close below before I setup a short to the 20EMA. Do you see how quick RSI dropped? Increasing volume this week as we get a rotation out of tech. IWM's weekly candle looks ugly, a gravestone doji. There was some selling, but we still closed the week higher. Look at the volume coming in this week. Out of tech into small caps? TLT hit the 100 and sold off... I told you last week. Did you sell any calls? I know some don't want to get called away, but my 95 covered calls expired worthless. I sold them based on that moving average. GLD tried to break out this week and immediately sold off. Back in the range for now. If recession fears continue, look for strength in GLD and SLV as well. SPYD still looking strong. This is not a suprise to me. Upcoming Week: GDP and jobless claims on Thursday. PCE on Friday. Are you seeing the pattern of these reports repeating every month? Are you starting to understand how this information helps us understand the bigger picture, but we’re not going to trade the initial report! WOW we have a TON of earnings this week. You might be thinking "Justin, several of your dividend positions have earnings coming up like KO and T. But I also got called away on F and DVN this week. I'm just recycled some cash and I wouldn't mind a pullback on these names to get more shares. That’s it for this week. My intention with this post is to make you think a little more about your trading plans, give you some ideas to make money, and keep your trading simple and passive. I’ll see you again next week. Much sooner if you join GKT’s Discord. Trade Smart and Live Free Friends, $Maxwell Do you want more individualized help? Setup a free 30 minute meeting with me lets see if we're a good fit for coaching!

If you think a company is about to pull back, it doesn’t always make sense to just sell naked puts. Today, I want to discuss some additional undefined risk trades I put on even if I’m a little bearish. Put sales are my favorite strategy because the trade setup and management are simple. If I’m wrong, owning shares of the underlying gives me a second chance because shares never expire, and I consider them an asset. This doesn’t mean ‘bag holding’ a loser forever; I’m simply pointing out that if you are wrong in the short term, you have a second chance with a put sale that goes wrong. But what if you think the company is going to pull back? You look at the moving averages , the stock is currently at resistance , or you see a bearish candle pattern . Selling a naked put doesn’t make sense if you have a bearish bias! Instead of waiting for a pullback, you can set up a trade that benefits as the stock pulls back. In other words, set up a trade that benefits from theta decay and offers a bonus if the stock falls into the “tent” of the risk curve. Let’s take a look at the risk curve for some of my favorite trades when I have a bearish bias. To keep this article semi-short, I’ll break down the specifics in a separate article with trade setup and management. I recorded a video companion for this blog: Let’s start with an introduction, and I’ll discuss how I think about these trades. If you have insights, I’d love to hear from you in our Discord , or shoot me an email ! Short Put: When we sell a put we are 100% bullish on the stock. In this example we are selling an 18 strike put and collecting $20. This is what this trade looks like on the options chain in Tasty Trade As a quick reminder, I like to sell puts outside the expected range (the brown bar in the middle) and past the standard deviation (the blue dotted line), and I want to collect 1%, so the 18 strike for at least $0.18 for each 30 days. This risk curve shows that if HOOD goes up, the max profit is the premium you collected. As the stock goes up, this trade has a 93% probability of hitting a 50% profit target, which is $10. You will only make $20 no matter how high the stock goes up. The max loss looks intimidating because if HOOD stock went to zero, you are obligated to buy those 100 shares. You can see the buying power is about $360 in a margin account. Put Ratio Spread: A put ratio spread is when you buy 1 long put and sell 2 (or more) short puts. The ratio is generally 1:2, but slightly more advanced ratios like 1:3 or 1:4 add more risk. Keep in mind you can sell more than one ratio, so 2:4 depending on your account size and the share price. Size your trades evenly for the best risk management. This is what it looks like on the options chain. We are buying the 21 put and selling 2 20 puts. Do you see how this is right at the expected range (the brown bar) and we are still collecting over 1% of the strike? Of course, we are not collecting the $0.47 credit we would if we just sold the 20 puts, but let’s look at the risk curve. Notice that unlike a short put, we now have a "tent" between 19-21 in the share price. Instead of the $27 credit being our max profit, we see a max profit of $127 because we have a put debit spread mixed in with our sold put. This is what the spread looks like. We're paying a $20 debit to make a max of $80. The put ratio spread is an easy way to add a little hedge to a short put because we have added a put debit spread right above the short put sale. 1-1-1 Put Spread: But what if you are even more bearish and you still want to start a position? Please keep in mind HOOD's share price is pretty small. The reason I'm pointing this out is because a 1-1-1 can pay higher credits than today’s example. Do not sleep on this trade. Let me show you the setup, then I will tell you a cool way to convert this into an even better trade on a pullback. This is what the options chain looks like: The short put is still at the expected range, and you are adding a put debit spread like we saw with the put ratio spread, but all trades are at different strikes. I only sell 1-1-1s, meaning I want a credit for this trade instead of a debit. I personally like to have a strike in between my two short puts. If you sold the 21 strike instead of the 20, you'd get a $16 credit. Max profit here is $108, still with a max loss owning shares at $20 a share less the put spread and credit we received. Let’s look at the risk curve before you ask why I would take a trade that only pays an $8 credit. If HOOD pulls back between 20-22 a share, you make $100. If HOOD bounces, you keep the credit received. This trade uses $575 in buying power. If you were to move the 20 short put to the 21 (meaning you have a 23, 22, 21 strike), it looks like this: Do you see the profit tent move from 21-22? You can make $120, but the size of the tent shrunk. The risk here is the same as selling a short put. The profit is the credit of the debit put spread to the downside. Justin, 'why would you do this for such a small credit?' Because if HOOD drops and falls into that profit tent, I could sell another put for a really nice credit and create the next trade that I like to set up, the 1-1-2! 1-1-2 Put Spread: A 1-1-2 has two short puts instead of just one. This means you have two short puts, meaning if left unmanaged, you are agreeing to buy 200 shares. So keep in mind the worst-case scenario. This is what the options chain looks like. We sold 2 19 puts (right at the standard deviation) and created a put debit spread at 22-21, right between the 20 and 30 deltas and at the expected range. If you notice, we collected a $31 credit. We have great probability of profit, and we can make $131 on this trade. It requires $910 in buying power since we have 2 short puts. You can skew this trade to have less delta. As it’s set up, you get nice theta decay. This is the risk curve. The profit tent is between 19-21 per share. If HOOD bounces, you keep the credit. If the stock goes up, you still benefit from the 3.57 in theta decay! These are a few of the trades I use when I anticipate a stock pullback. Each strategy offers unique advantages and can be tailored to fit your risk tolerance and market outlook. By adding these trades into your tool belt, we better navigate bearish conditions while still benefiting from potential upside. If you want to dive deeper into these strategies or have any questions, join our Discord community where we discuss these topics in more detail. Happy Trading, Good Kids! $Maxwell If you need more personalized help with your trading, you can schedule a 1:1 intro call with me through my Calendly link  click the image below!

This weekend, I'm giving you a taste of something new: an inside look into what I see and what I'm thinking. Remember, this is not trading advice but an educational resource to help you build your own trade ideas using the wisdom and experience I've gained over the past couple of decades in the market! I'm I sharing my insights on the stock market with a little more bias that I think will make you money or help you learn how I've built wealth. My goal is not for you to follow my trades blindly but to help you learn from my experiences. Weekly Charts Update Spy- Weekly Chart I'm not bearish on SPY; I'm simply stating why I'm not adding too much risk. The RSI is showing we're overbought, this is a wave 5 on the weekly, and we are really extended from the moving averages. SPY is up 20% this year. You can see the obvious decline in volume, which is normal because of the summer. QQQ Weekly Chart Tech is outperforming SPY by an additional 5%. QQQ is up about 25% so far this year. Keep in mind, QQQ's top holdings are 8% in AAPL, MSFT, NVDA, and 5% in AVGO, AMZN, and META. So 40% of the index consists of those six companies! With tech earnings coming up, the bar just gets higher and higher for these giants. Even if the companies keep doing well, the law of large numbers is a headwind. I don't mean to sound bearish. I'm cautious and looking to collar my tech holdings. Collars or super collars are a GREAT idea if you have 100 shares! IWM Weekly Chart I've been saying for the last couple of months IWM (small caps) will benefit from a rate cut as these small companies use debt in their company to grow. We are starting to see the breakout. If you have no exposure consider buying a dip? Do you notice how resistance becomes support? look at the bold purple lines. GLD Weekly Chart I left that morning star reversal (the purple circle) right off the 100 and 200 on this chart because LOOK FOR THIS ON OTHER CHARTS!! TRADE IT IF YOU LIKE MONEY. ok enough yelling but i get so darn excited. READ THIS BLOG ON MY FAV PATTERNS! Please look at the consolidation of GLD here (in between the two red lines). Look at what RSI, it moved from overbought to more in range just from sideways movement. Will the purple squiggle play out? I think GLD could be a good bullish trade with fears of a possible recession? TLT Weekly Chart I've been bullish on TLT for months. I've written about it in every Good Kids Only newsletter. When TLT pulled back last week i bought more right off the 10EMA... There is a weekly 100 moving average right on top of us, there could be some resistance but I expect TLT to continue going higher as rates get cut. Here's a few interesting charts with an explanation on what I see MCD - Last time MCD hit the weekly 200 was in 2020. Is this a good time to try a bullish swing trade? Check on smaller time frames and you'll see a morning star reversal on july 8,9,10.... You can probably figure out I'm in bullish (with a stop of course). NUE - how many times has nucor hit the blue line and bounced? Granted it actually closed below the blue line a couple times it's retaken the trend. The only problem is earnings are coming up. Maybe a defined risk trade? SPYD- Will there be a rotation to dividends for fixed value investors when SGOV stops yielding as much? Is this a buy the dip opportunity? The first trade I'm showing is a monthly candle. The second trade was a breakout, but now it's a buy the dip if you aren't in. This week, I'm looking at banks reporting earnings. On Friday, we saw reports from JPM, WFC, and C. This gives me a good idea of what to expect this week. I know volatility was reduced for all the banks after Friday, but that's alright. I don't love C or WFC because C has so much international exposure, and WFC opening all those fake accounts just rubs me the wrong way. Besides my personal bias that Jamie Dimon is a bad@$$ CEO, I also look at the Price to Book ratios of banks to figure out which ones I'm most interested in selling puts on or looking for opportunities. You know I like support and resistance levels and moving averages too. Here's what I see in FINVIZ for banks reporting this week. Bank P/B JPM 1.84 WFC 1.2 C 0.65 PNC 1.49 BAC 1.23 RF 1.22 USB 1.35 ALLY 1.15 SNV 1.39 FNB 0.86 OZK 0.99 If you can find a low price to book and see a good trade: Take it? I am... Other trade ideas for this week UNH reports this week. I know they had some security issues, and I know it's an expensive share price. I also know how many people use them for insurance, and I will look to get back in after earnings. SCHW - Although I didn't like their login issue, this is a good company with a lot of assets under management. I'll be looking for trades AFTER earnings. Amazon Prime Days - Is there a trade here? I know the market is forward-looking. I understand people are really smart and have already thought about this. I still want to watch Amazon this week as it’s having its 8th Prime Day. I quickly looked back since 2015 when AMZN started having Prime Days, and honestly, the last few years have been bullish, but the market has been pretty bullish too. With Amazon at ATHs, I’m not looking to add more (I have a lot of AMZN shares). I thought this was interesting and wanted to share. AMZN Monthly with Prime Days AMZN weekly with the last three prime days In terms of 'news' there isn't too much coming up this week. Can I end with a small rant? Of course I can; this is my post. There's a big difference between listening to the news for relevant information and reacting to the news. When people say they don't pay attention to CPI (or news) and just trade their plan, that's just ignorant. Do we know how the market will react to good or bad news? NO. But is it important to understand what rising CPI means to the market? Ask everyone who lost their accounts during this last rate hike. Please pay attention to the market cycles and news. Do NOT REACT out of FEAR, but keep yourself informed. With that, I'll see you next Sunday. Happy Trading Good Kids Mr $ Maxwell If you enjoyed this blog you should subscribe . We share real time updates all for free in our discord . I understand the stock market can feel intimidating and complicated, if you want some extra support and guidance, I help people skip levels, schedule a free discovery call with me . Lets talk stocks and see if I can help you! Click on the image below and setup a time that works for you!

Financial literacy is the key to unlocking a world of opportunities. Today, I’m excited to share my favorite technical patterns. In stocks the word technical is just a fancy word for looking at a stock's chart. These chart patterns have made me a LOT of money. For all the pure math-based traders out there, open your minds and realize that charts, moving averages , and support and resistance levels are powerful tools that can enhance your confidence in math-based trades 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 As a contrarian trader most of my favorite patterns are reversal related. Meaning if we get a signal a stock is about to reverse we can setup a trade. I think by combining high probability math based trades with these patterns you gain an edge in the trading world. Here are 7 of my favorite patterns to make money with real examples. You'll now understand some of the reasons I take a trade in discord ! 1. Double Bottom The double bottom is a bullish reversal pattern that signifies a strong level of support. It forms after a downtrend, indicating that the price is likely to rise. Identification: Two distinct lows form at roughly the same price level. There is a moderate peak between the lows, creating a “W” shape. Volume often increases on the second bottom. Why I Like It:  The double bottom is a reliable indicator that the downward momentum is exhausting, and buyers are taking control. It’s a clear sign to consider buying. Wait for a neckline retest. Trying to catch that second bottom has cost me a lot of money! 2. Double Top The double top is a bearish reversal pattern, marking a resistance level where the price struggles to break through. It usually signals a potential downward movement. Identification: Two distinct highs form at roughly the same price level. A moderate trough forms between the highs, creating an “M” shape. Volume often decreases on the second top. Why I Like It :  Just as the double bottom helps identify support, the double top helps spot resistance. It’s an excellent pattern for selling or shorting opportunities. Wait for the actual breakdown before you go short, remember the blog I wrote on support , you want to make sure it doesn't bounce and turn bullish! 3. Morning Star Reversal The morning star is a bullish reversal pattern that appears at the bottom of a downtrend. It consists of three candles and indicates the start of an upward trend. Identification: A long bearish candle followed by a small-bodied candle (indicating indecision). The third candle is a long bullish candle, closing above the midpoint of the first candle. Why I Like It:  The morning star is a powerful signal of a potential trend reversal, offering a clear entry point for bullish trades. It combines price action with market sentiment, making it a strong indicator. Wait for the third candle to close, you can setup a limit buy for the breakout. I loke to look for morning star reversals on moving averages! See that picture above? that's MONEY! 4. Evening Star Reversal The evening star is the bearish counterpart to the morning star, appearing at the top of an uptrend. It signals a potential reversal to the downside. Identification: A long bullish candle followed by a small-bodied candle. The third candle is a long bearish candle, closing below the midpoint of the first candle. Why I Like It:  The evening star is a straightforward pattern to identify and a reliable signal for potential bearish moves, helping traders take advantage of upcoming downward trends. Like the morning star you want to see the third candle close. I really like these when the stock is already high! 5. Head and Shoulders & Inverted Head and Shoulders The head and shoulders pattern resembles three tops or bottoms where the middle resembles a head with two shoulders, indicating a shift from bullish to bearish trends (or vice versa in the inverse pattern). Identification: A peak (shoulder) followed by a higher peak (head) and then another lower peak (shoulder). A neckline drawn across the two troughs. Why I Like It:  I like both the inverted and regular head and shoulders. If you see this setup it's a powerful pattern because you have 3 times where the stock failed. It is useful for identifying major market turning points. As I have said wait for it to setup before you jump in the trade. 6. Pennant Patterns Pennant patterns are compression during a continuation pattern. Think of these as a compressed spring ready to explode. They are formed during strong trends. Identification: A sharp price movement (flagpole) followed by a several candles that keep getting smaller making a small symmetrical triangle (pennant). The breakout occurs in the direction of the preceding trend. Why I Like It: Pennants are one of my favorite quick trades. I've made a lot of good money in a short time because as the stock compresses the pressure builds up. These are best when the stock is already in a nice trend and you get a little break. Look for a trade in the direction of the existing trend, I encourage you to be quick on these. 7. Hammer Pattern The hammer is a one of the most basic strategies for a good reason! A hammer is a single-candle bullish reversal pattern that forms after a downtrend, indicating a potential bottom. Identification: A small body with a long lower shadow and little to no upper shadow. The lower shadow should be at least twice the length of the body. Pickup hammers off the ground for the best success- meaning a hammer when the stock is low (at support) is better than a hammer at resistance. Why I Like It:  The hammer is a clear and easy-to-spot pattern that can signal the end of a downtrend. It’s particularly useful for identifying potential entry points for long positions.   So there you have it, 7 chart patterns EVERY math based trader should learn. Using technical patterns AND math based options trading significantly enhances my success. These seven patterns are some of my favorites chart patterns. They are simple and easy to trade. Incorporating these patterns into your trading to make more informed decisions and improve your trading performance. at Good Kids Trading, we’re not just about making trades; we’re about making smart, informed decisions that lead to financial freedom.   Happy Trading Good Kids, Justin I understand the stock market can feel intimidating and complicated, if you want some extra support and guidance, I help people skip levels, schedule a free discovery call with me . Lets talk stocks and see if I can help you! Click on the image below and setup a time that works for you! If this was helpful and you want to show your appreciation for my time and knowledge I love coffee ! This is not trading advice, it's for your education. I'm a dude on the internet who’s been trading for 2 decades, and I use the stock market as my primary source of income. None of this is financial advice. Any trades or decisions you choose to make are at your own risk, this is purely educational!

Here at Good Kids Trading, we primarily trade options. Options come with their own risks which, when appropriately mitigated, are far outweighed by the benefits of trading them. Regardless of whether you are trading stocks, options, crypto, real estate, or literally any other asset class, you should have a full and complete understanding of the risk involved before you dive in. This article outlines the basics for how we at GKT view and manage the risks involved with options trading. Keep in mind that the beauty of options is that there are endless ways to manage a position, and there frequently isn't one "right" way to do things. Is Options Trading Risky? Now this is a LOADED question. The short answer is definitively, "Yes!" The long answer is, "Yes, but..." To begin with, we need to address the concept of risk being relative. Using an everyday example, crossing a street is generally speaking an activity that carries risk of getting hit by a car. If that street happens to be an interstate the risk of getting hit is significantly higher than you crossing the street at the end of a cul-de-sac. In the context of options, the main factors which help put the risk into a better perspective is the underlying, the strategy, and the position size. Underlying - The term "underlying" is a general term which references the stock or ETF that is being traded. Strategy - Another broad term which paints a picture for how an option or a set of options is to be used. Using a sports analogy, man coverage and zone coverage are two strategies for playing defense. Position Size - How many options contracts, and ultimately dollars, are being risked on that given trade? This is best considered by using a percentage of your portfolio's value. $1000 is 10% of a $10,000 portfolio. Relative Risk in the Underlying The reality here is that every asset class has a perceived risk. The risks that come with real estate are much different than the risks that come with cryptocurrency and the risk is nearly impossible to quantify. There is no simple measure that says real estate is worth 2 risk units and crypto is worth 5 risk units. However, most people would generally agree that real estate is less risky than cryptocurrency. The more specific you become with this analogy, the more impossible the comparison becomes. Is a class D property in some major metropolitan downtown district more or less risky than Dogecoin? The risk becomes more easily quantifiable when you compare two different assets within the same asset class. For you and me trading the stock market, there is an easy way to answer the question, "Is TSLA more risky than KO?" and it comes in the form of Beta. Beta Approximates Risk Beta measures how much the underlying moves in comparison to "the market," typically the S&P 500. If every time S&P 500 moves the underlying of interest moves twice the amount in the same direction, the beta will likely be >1. If it moves less than the S&P 500, then it will be <1. Investopedia has a phenomenal article discussing how beta is calculated if you want to go down that rabbit hole. For the purposes of this article and how we at GKT trade, knowing the beta helps us approximate how much risk, relative to the S&P 500, the underlying carries. In a portfolio full of high beta underlyings, you should expect larger swings in your account compared to a portfolio of low beta underlyings. Just like most things, there is no right or wrong amount of beta to carry and there are certainly pro's and con's of having more or less beta. As you develop your style and risk tolerance, the beta will generally fall into place. Beta values for can be found readily on sites like Yahoo Finance . Risks of Different Option Strategies There are literally hundreds of text books, thousands of blogs, and millions of hours of video on YouTube discussing the nuances of the endless different strategies that can be employed with options. We at GKT keep it simple and believe in the importance of knowing the basics. Once you understand the principles of buying versus selling options and defined versus undefined risk strategies you can apply these concepts to match your individual risk tolerance. Before going any further, one thing that should never be forgotten is that if you let an option expire in the money , SOMETHING will happen to your account. Buying Options Just as when you buy food at the grocery store, you spend money and get something in exchange. You know exactly how much you spend upfront. With options it is the same thing. When you buy a put or a call, you pay money up front for them. This is commonly referred to as "paying a debit," or simply a "debit." The debit paid almost always represents the maximum amount of money that can be lost. Option buyers have an underlying belief that something will happen. For instance, XYZ is currently at $100 dollars in January and Jack sees that the $110 Call for February for a premium of $2.00. Jack ends up buying this call because he believes XYZ will be above $112 ($110 plus the $2.00 debit paid) at expiration in February. In strategies where a debit is paid, the underlying assumption is that something will happen to the underlying and that assumption must occur in order to be profitable. Selling Options Unfortunately selling options is slightly more complicated than buying options. Option sellers believe something will not happen. Using the example above, Jill thinks XYZ will not go above $110 in February. In fact, Jill sold the $110 February Call to Jack. The debit Jack paid goes directly into the pocket of Jill and is termed a "credit." In order for Jill to be profitable, XYZ would have to be less than $112 at expiration. But what if it there is an unexpected buyout on Jan 31st and the stock rallies to $200 at expiration? Well, Jill would be now down $88 per share (Current price of $200 minus sold strike of $110 minus credit received of $2.00), or $8800 per option contract since each options contract is for 100 shares of the underlying. Option sellers get paid the premium to cover the risk of the unknown. The buyer has to pay for the certainty that they can only lose as much as they paid. The premium associated with an option is directly related to the perceived risk of the stock. A stock with higher perceived risk, represented by beta, tends to have more expensive options. Undefined Risk Strategies Any option strategy that has an uncovered sold option will always have un defined risk. Selling a call or a put is the simplest undefined risk strategy. Selling just the call or put, without anything to back it up, or cover it, is referred to as being naked. If you don't own stock and sell a call, it is call a "naked call." If you own 100 shares and sell a call it becomes a "covered call." With puts, if you have enough cash to cover being assigned the shares, it is called a "cash-secured put," and if you don't it is a "naked put." If you want to be really technical, a naked put has defined risk in that a stock can only go to $0. If Jack sold a put on XYZ at the $100 strike and the next day the company files for bankruptcy and goes to $0.00, Jack can not lose any more than $100 per share. However, because XYZ can theoretically close at any price below $100, the risk cannot be specifically identified, which is why only selling a put gets lumped into the undefined risk category. Risk Defined Strategies The most simple risk defined strategy is buying or call or a put. The debit paid is the the maximum amount that can be lost. If anyone were to ask Jack how much he was risking on his XYZ trade he could with 100% certainty tell them $200 ($2.00 per share multiplied by 100 shares). Option strategies with multiple legs that result in a debit all will have defined risk. (An option leg refers to the individual calls or puts bought in more complex strategies. For instance, a strangle has 2 legs, an iron condor has 4, and credit spreads have 2.) There are also risk defined strategies that result in you receiving a credit. The most simple version of this is a credit spread. Regardless on if it is a put or a call credit spread, the basic set up is selling an option and then buying another one just a little bit further out of the money. An example could be Jill selling the $100 call and buying the $105 call when XYZ is currently at $95. This setup would result in you receiving a credit, lets say of $1.50. In this scenario Jill wants the stock to stay below $100 to receive the maximum profit. If we imagine the worst case scenario and at expiration XYZ closes at say $150, Jill would have only lost $3.50 per share instead of the $50 per share if she just sold the $100 call. In short, if a call or a put is sold, and another option is purchased slightly further out of the money, then the risk for that trade can be calculated and therefore is defined. If this concept is new to you, let me break this trade down in detail. At the beginning Jill believed that XYZ would not be above $100 on the expiration date. By selling the $100 call, Jill becomes obligated to sell shares to someone at $100 if the stock closes above $100 at expiration. Jill was uncomfortable with the undefined nature of this trade so she defines her risk by buying the $105 call. This second call she purchased is cheaper than the call she sold, resulting in a net credit. The $105 call she bought allows her to buy shares from someone else, even if the price of XYZ is lets say $200. In our fictitious trade, XYZ closed at $105.01. Because of this close, Jill was obligated to sell 100 shares at $100 and then bought 100 shares at $105. This resulted in a $5 per share loss. Recall she made $1.50 in credit at the beginning of the trade which means she only lost $3.50 per share on the trade. If she did not have the call at $105 and she bought 100 shares the second before the market closed, she would have lost $3.51 per share. The higher Jill has to buy shares to cover the naked call, the greater the losses. Position Size Affects Risk This principle is simple and straight forward. At GKT we intentionally keep position size small. The overall principle we subscribe to is that we want to keep our trades so small that even if we take max loss on a defined risk, or a large loss on an undefined risk, we won't blow out our account or even lose sleep at night. If you are checking the market every few minutes and following the pre and post market action willing the stock to move in a direction, the position size is too large. "Small," is a relative term and is directly related to account size and trading experienced. As a general guideline, risking about 1-2% of your account size per trade is a good place to start. If you are brand new with a smaller, 0.5-1% may be more appropriate. At the end of the day, your emotions will help you fine tune your position sizing. We keep our position size small in order to avoid trading emotionally. Emotional trading will cause you get get out of a trade too early, hold a trade for too long, enter a trade before you get a complete signal, or any number of other things. This is why we set up GTC orders once we enter our trades. It takes away the emotion of when we exit the trade! The nuances to this all depend on your trading style . Risk Management for the Options Trader Putting this all together, options trading is risky but the risks can be mitigated. Start by choosing an underlying that meets your risk tolerance. Then find a strategy that you know well and fully understand and only trade a small position size. Finally, repeat this process so that you have several different trades on at the same time. Taking trades on different underlyings with variations in strategies and directions creates diversity. This diversity guarantees that you will have some winners, some losers, and some trades that just need more time. The winners will hit their GTC orders and close out. Now you get the chance to manage the losers and let the other trades play out. Keeping position size small ends up being the key to this whole process. Small position sizing allows you to be systematic at managing your losers and capturing profit on your winners. Small position size allows you to take more trades which increases your chances of having winners. It helps you take a new trade after realizing a small loss. Small position size allows you to keep the machine going. At GKT we practice these concepts every day. Plus, trading in a community of likeminded people is far more fun, educational, and profitable! Join our discord today: www.goodkidstrading.com/join

I'm sure you have heard so many people (including me) discuss how stock trading is passive income, but there really is not any income if you aren't taking some of the money out of your account. I see many traders who win use the profits to trade more frequently and/or adding bigger risk as they make money trading. This normally doesn't end well, lets discuss the GKT method! Taking some profits out of your brokerage account and spending it on tangible things or meaningful experiences is a powerful feeling. This process helps shift your mindset about trading because behind all the scrolling numbers on our brokerage screen, outside the candlesticks on the charts, and the clicking of buttons on our devices there is actual real money being exchanged. I'd like to challenge you to take some of the profits and spend it on tangible assets, or an experience that has positive impact for you and/or your family. And before we get too far into this: I know you are probably saying to yourself "But Justin, my trading account is small. I can't afford to take money out." I get it, we've all started small. I'm not suggesting you take a large sum of money out (not yet). I am suggesting that you make an actual withdrawal from your brokerage to your checking or savings and you buy something with it. Could you afford to buy a small gold coin (or any other asset)? How about taking your spouse/friend/child out for ice cream, coffee, or maybe dinner? A course or coaching session with someone you admire and who could help you learn from? When you do this tell others about it, brag a little bit. (Tell me when you do this. DM me in discord, email me justin@goodkidstrading.com ). If you aren't actually taking out a small amount of your profits and spending the money on something other than more stocks I hope you will consider it. I know this has made a meaningful impact on my life and today I'm going to share my first big vacation I paid for using swing trades: I remember very clearly when ABNB's stock IPO'd because this was the first time I took money out of my brokerage and paid for an entire vacation, I went through the process of withdrawing the cash and transferring it to my checking account, and I paid for a 1 week vacation in St Thomas in an ABNB. The two trades paid for the flights, the rental car, food and fun. I had previously paid bills using my stock trading profits, but this was my first time using profits to pay for a vacation. It was fun to say ABNB paid for my Airbnb. It was also powerful from a psychological standpoint. This week in St. Thomas started a new habit for me, as I type this I'm sitting on a Royal Caribbean Cruise that I paid for selling puts on RCL. I acknowledge these trips might not be obtainable for people just growing their accounts, but use this as motivation because you really can get here. I'm not that special, and sure this won't be an overnight success story for you, but it's totally possible and it's not that difficult with the right strategies, plan, and expectations. I am methodical and was a bit crazy about saving and investing for a while. It really is true that the more money you have the easier it is to make money. Taking money out of my brokerage account and spending it on bills is a must for a full time trader, but taking money out of the brokerage and spending it on tangible assets, meaningful experiences, leisure, or self improvement is a totally different experience and something everyone, no matter what your account size should do on a regular basis. It doesn't matter if you go and buy a $5 ice cream, $20 book on something you want to learn about, maybe you sign up for a coaching or mentorship, or you pay $49 for an upgraded seat on your flight using a trade you made on an airline stock. Taking money out of your account and spending it on tangible things trains the mind that this is real money and this can be passive income if you create a trading style and plan that you understand, practice and believe in. I'm not suggesting you take all your profits out, keep growing your account but what is all this for if you don't enjoy some of your winnings. If you're interested in joining a community of traders and learning more about these strategies, consider joining Good Kids Trading (GKT) by clicking here .