Tutorial

This page is intended to provide basic guidance on what to expect as a subscriber, and suggestions for executing trades. Maybe the best way to start is to show an example of an actual trade.

Friday's CRUS Trade

Here is an example of how the CRUS Sell Signal from Friday should have been implemented:

Order #1:  Buy to Open Sep $35 Put @ $1.45  (or, "Market Order"). 

When the above order is filled (should take 30 seconds or less, depending on your online broker):

Order #2: Sell to Close Sep $35 Put @ $2.20 (for 50% gain) 
            or: Sell to Close Sep $35 Put @ $2.90 (for 100% gain) 
Make sure that Order #2 is what is called a "Limit" order, i.e., you will sell the option only at the specified price. That assures you of getting the desired the percentage gain (assuming the option trades at that level). Especially for new traders of the system I suggest starting out targeting 50% gains, at least until you get the feel for how this very simple, but effective trading system works. That 50% could be seen in a matter of days, sometimes weeks, and occasionally months. Even if it is the latter, who cares? Fifty percent is fifty percent.
After placing the above two orders, walk away and let the stock market do all of the heavy lifting. Some traders do not want to risk a trade going to zero (which could happen on any one trade). If that is the case, keep a "mental" stop  at your maximum risk threshold and if you see the option trading at that loss level, then place the order to close out the trade. Never use a resting stop on an option trade.  There are snipers out there who will find your stop and hit it just because it is there. 

TUTORIAL

Overview:

This trading system is based upon trading in the direction of the primary price trend in a basket of stocks, indexes and ETF's. We identify primary trends then lay in wait for an inevitable counter-trend. When price breaks out of that counter-trend and back in the direction of the primary trend, we enter an option trade in the direction of the primary trend.

Trade Management

Upon entering the trade a "Limit Sell" order is placed to close out the trade at a designated profit level, no less than 50%, and as high as 150-200% as per each individual option traders risk tolerance. New traders should set their profit targets between 50-100% until they get a good feel of the system. This profit window provides an ideal balance between percentage of winning trades versus the size of winning trades. 

Stops:

(a) None. Stops have never helped profitability and have only ruined perfectly good systems. So on any one trade, be prepared to lose it all. Based upon our testing, it will happen, but not very often; Many trades will experience a decline prior to reaching targeted profit levels. 
(b) Alternatively, a 75% stop can be employed with some, but minimal degradation of overall results. Anything tighter than about 75% will result in whipsaws out of many trades that go on to triple-digit gains.

 

Daily Routine:

Because trading signals can only be confirmed at market close, all new trades are sent out and should be entered near the open of the next day. All updates and alerts will be both emailed and posted on the Blue Line Subscriber Page. Please note, you will need a login to the website in order to view the trade alerts. If you have not done so already, here is the link to create your login.

Weekend Updates:

Weekend Updates will announce any new trades for Monday and will usually include market commentary on a wide variety of issues, including big picture analysis as well as an occasional special situation trade opportunity that falls outside the parameters of the trading system. 

Getting Started:

Once you have signed up for our trading subscription service, you will receive a welcome email with brief instructions for making sure you have access to the website, billing portal, and trade alerts via automated email. A separate email  invite will be sent from Chargify to manage your subscription/billing through the BILLING PORTAL. Please be sure to take the time to set up your login for all systems!

RISKS ASSOCIATED WITH OPTIONS TRADING

Please be aware of your broker’s requirements for trading options. Before you decide to invest in the options market you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a substantial loss which could total more than your initial investment in a short period of time. Options involve substantial risk and are not suitable for all investors. Options investors may lose the entire amount of their investment in a relatively short period of time. Therefore you should not invest money that you cannot afford to lose. If you have any questions or concerns regarding the risks associated with option trading, you should confer with a trusted and reliable independent financial advisor.

None of the information provided by Blue Line Trading System or AllanTrends, LLC constitutes a solicitation to trade any investment or security of any kind.