Many times people asked me how do you find the right option to trade.

My mentor George Focas(http://www.sharelord.com), taught me to look up the IBD100 (http://www.investors.com).

He helped me set up trading rules.

First ,only trade stocks at with price between $22 – $63(I trade the US market and so prices are in US dollars). Anything outside of this is pointless.

Make sure it is not a pharmacy Stock (company that produces drugs)

Then I look at the graph and make sure it is trending upwards for the last 6 months.

Then I look at the relative strength, EPS rating and the composite rating to make sure it is above 75%.

Put this into my spreadsheet to make sure the profit I will make is acceptable(if you need a copy of my spreadsheet please contact me info@dynamitewealthcreation.com). Then I select the stop (put) level I have in place to make sure if the stock/share falls by the 3^rd Friday of the month. I am then able to put the worthless stock to someone else to minimize my loss.

Then I will place my trade. From time to time I will make sure the stock I have purchased is still above the option I have given someone. I do not want to own the stock by the end of the month.

I have put all this in a system, to maximize my gains and minimize my losses, how cool is that?

This entry was posted on Monday, June 14th, 2010 at 8:19 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.