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 week is the final week in the US if you are trading options. This Friday will be  expiry date.

We brought share (TSL) at $26.00 and put and sold a  “in the money” option at $26.00.

We looked at this stock as saw it trending up for the last 6 months, and considered not to put a stop in. What that means if the stock goes south, (the value of the stock goes down) then  we would be able to pass the stock to someone else.

We put our stop at $23.50.

During the month stocks tend to go up and down, but as long as the shares were above our option of $26.00 on the 3rd Friday of the month. Then the stock will be taken from us.

As Murphy’s law was working our shares finished today at $18.29, so unless a huge market shift… which can happen, we  will be down alot on our investment.

Ahhh you say… and we say too… we have a stop/collar in place at $23.50. So we are now able to give our stock to another person who will pay us $23.50 per share, even though out shares are $18.29.

Yes we have lost a little, but we do not own shares that have “tanked”. And we can go back into the market again, because you have to always persevere, when it comes to learning about the markets, and investing. You will make loses, but you make more profit. This is successful trading!

There are no special skills necessary for making investments in the stock market. As a novice, you can take advantage of the following guidelines if you intend to invest in the stock market.

While making your first investment in the stock market you should be familiar with the fact that the stock market fluctuates in price constantly. Long term records show that stocks generate profits up to 10% per annum over a 3-5 year period. There are two terms most commonly used for stock trends: bullish trend or bearish trend. These are upward (bull market) and downward (bear market) trends in short-term stock investing.

The stock market provides a wide range of opportunities every day, no matter which direction the market is trending. Many new ‘hot’ stocks become available every week and are predominantly in the biotech, energy, financial, communication and healthcare sectors.

Depending on your competence and ability to move quickly, you can generate good financial benefits from trading these hot stocks in a small amount of time. Many qualified day traders believe that trading hot stocks in periods of market uncertainty can lead to better than anticipated profits.

Try to keep things simple in your trading. Choose a strategy, learn the fundamentals and stick to it. Don’t over-complicate your strategy with too much technical data.

And, very importantly, always remember that no matter what the stock is, whether the market has been trending in one direction for a long time or you get the ‘tip of a lifetime’, ALL trading comes with some risk.

Learn how to minimise your risk by understanding the strategy you have chosen. You can never completely remove the risk when investing in the stock market but you can understand what your risk is and take steps to reduce or cap any potential loss. Always learn from a mentor, as they have made the mistakes, you will not have to. To find mentors that will teach you with a program start with getting your free DVD here