Ideas and opinions presented on Money Patterns work best when:
1. You are 18 years of age or older.
2. Determine your own risk tolerance and maximum allowable loss (in general and for any single trade).
3. Understand position sizing for your account size.
4. Review the Risk Management section on this website.
5. If you are using Options Strategies, use a margin account. Information on margin https://www.fidelity.com/trading/faqs-margin
6. Talk to your broker to ensure you are setup for trading options strategies. If you need experience, I recommend watching online videos from OIC (Options Industry Council).They are free and your broker knows training provided by OIC. Our favorite strategy is the Credit Spread. https://www.optionseducation.org/videolibrary/credit-spreads
7. You can also search for general options education in the video library on OIC. https://www.optionseducation.org/videolibrary
8. Look at any chart analysis, video analysis, and then make your own opinion to set stops or alerts for exits. You need to know what your exit is when you enter the trade. If you exceed the goal, this is great. If not, you have a reference point for capping losses as opposed to flying blind.
9. Sign up for Instant Alerts. See the"Instant Alerts" tab under the Memberships section or review the Welcome Email once you signup for your membership.
10. Review the “Pattern Day Trader Rule” as defined by the SEC. https://www.sec.gov/fast-answers/answerspatterndaytraderhtm.html
While we may day trade (purchasing and selling same day), we can avoid the PDT rule by using tactics.
1. We hold overnight when possible to avoid the rule, buy today/sell tomorrow is not day trading.
2. We only day trade 3 days per week or less. Preferred days are Monday, Wednesday, and Thursday. The staggered days provide low probability for exceeding the PDT rule. You can day trade any days you like, as long as it’s not more than 3 days in 5 day period.
11. If you need clarification on an order entry/exit, or would request any change to the site, let me know in the Contact Us section. Give your username, the issue, and what fix you see for the issue and we’ll see if changes can be made if applicable.
12. You must have emotional stability. Most options trades will not payout the first day or maybe even the first week (for multi-week strategies). They options strategy may appear to be losing value in the beginning. We must remember we are playing a price pattern, while collecting theta time premium, and perhaps playing a catalyst like earnings. It may take time for all the events to come together for our predicted price target.
13. Some brokerage’s have account minimums in order to place certain options strategies, such as vertical spreads (which is one of our main strategies). Most brokerage’s require a $10,000 account minimum for trading options strategies, which means we really need about $13k-$15k minimum so we don’t get margin calls on our account. If you have trouble meeting the minimum account requirements at your broker, you are still able to play the same exact tickers and strategy (bullish or bearish). You would simply have to keep to the Money Patterns outlined rules for day trading and swing trading, without being classified as a “pattern day trader” by the SEC. If you need help once you become a member, just ask.