A Simple Strategy for Consistent Profits
Currency options if you buy them offer you unlimited profits and limited risk – that’s good, but your chances of success are not high as 90% of options expire worthless.
On the other hand, an option seller has a 90% chance of success and if you do it correctly, then you can build huge profits over the longer term. Option Profits Success System
Below we are going to look at a strategy that has the odds in your favour and maximizes your chances of success when selling option premium.
So if the chances of success are so great, why don’t more forex traders
sell options?
This can be summed up in one word – RISK
While the odds favor the option seller when a position goes the wrong way – you will need a good capital base to ride out losses and enough money to trade a diversified portfolio of options.
You have an unlimited risk and a limited gain, but these mount up over time.
Let’s look at how to maximize gains when selling options
Getting 90% + Odds On Your Side For Huge Gains
If you want to use a currency trading system
based around options selling keep the two points below firmly in mind to get the odds even more on your side.
1. Sell Greed and buy fear.
Option premiums become high, when a market is driven by greed and fear.
It is these markets that provide you with the best profit potential. So when premiums move significantly from “fair value” you sell into greed and buy into fear.
The two indicators below are great for spotting these contrary trades and are explained more fully in our other articles.
This is the set up you are looking for: Option Profits Success System
First, look for markets that are very bullish or bearish, check the % Bullish indicator.
Look for readings below 15% bullish and above 85% to isolate opportunities.
Next, look for commercial buying of bear markets and selling of bull markets via net traders positions contained in The Commitment Of Traders Report realized bi-monthly by the CFTC.
Once you have found a contrary trade its time to use your charts to establish entry points and stop levels
2. Get time on your side
When you are buying option premium you want time on your side, when you are selling you want the opposite.
Time decay at the end of the life of an option becomes the major factor in its value, so use it to your advantage and sell options close to expiry.
This is not a game for amateurs
If you want to do a forex trading strategy that includes selling currency options – keep the following in mind:
The above is a simple strategy and it works and takes courage to do.
Selling options means you need to be well capitalized, have strict money management and be prepared to trade against the consensus and majority of forex traders.
Getting the odds on your side
If you can adopt the right mindset, spot opportunities driven by greed and fear and have the courage to trade them, you can trade with the odds of success heavily on your side and build wealth over the longer term. Option Profits Success System
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