Trade Tutorial & Getting Started

Executive Summary

Each day you will get an email notifying you whether or not there are any new trade signals. If so, there will be an option recommendation. Our stops are based mostly on the gain/loss of the option however on occasion we will also have an alternative stock price stop. These stops are seldom hit, but if one is hit is the trade is over. Absent being stopped out, the trade is in effect until you decide to take profits, at 50%, at 75%, at 100%, or more. The lower your profit target, the more often it will be hit. It is highly recommended that even if you exit with a nice profit that you leave some of the position open, a few of these trades go on to make insane gains and even if you only have a few calls or puts still in play, it feels good...damn good. Look at the Trades Table and get a feel for how many trades reach various levels of profitability. Recommend initial parameters are 50%-100% profit targets (leaving some one for further gain) and 60-70% stops. 

Under The Hood - Example

Signal: Sell CRUS

This is how to implement a sample trade. In this case, it is a Sell Signal on CRUS with a recommendation to buy the Sep $35 put. For this example, the profit target is either +50% or +100%. 

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 50-100% gains, at least until you get the feel for how this 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 50%. After placing the buy and sell orders  walk away and let the stock market do all of the heavy lifting. 

Stops:

We find that for for most trades option stops work better than stock stops. If your option drops by more than 75% its a bad sign for the trade, no matter what the stock is doing. We don't have a one-size fits all option stop, but if you chose to use stops we recommend 60%-75% target window. Our stats say no stop works well in the long run due to some very large gains along the way. But taking a few total wipe-outs in a row is disconcerting to say the least and we want you in the game for the long run, a few bad trades or not. If you chose not to use stops at all, try to keep the size of each trade no larger than 10% of your trade account. The chances of having ten 100% losers in a row are nil. Even 5 in a row is very unlikely. I don't use stops because I'm part gambler, part idiot, but most of all, know this system very well and in the end, using stops hurt longer term returns. 

 

Daily Routine:

Because trading signals can only be confirmed at market close, all new trades are sent out near or after the close of trading 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 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.