I receive a lot of emails that ask often the same question about how I manage to do so well in my trades. The answer is simpler than most investors think. I follow the market direction which is obviously the most important aspect of learning when to commit capital and when to reduce it. I also understand the stocks I trade within including everything from the revenue to their chart patterns and knowing their chart patterns is probably one of the best methods for continually earning profits and rarely taking losses. Investors tend to jump around a lot, moving from stock to stock seeking whatever they deem to be the next great trade. Instead I stay with the same stocks because I know that there are always trades within every stock and I get to know the trading pattern well.
Last year for example, Aflac Stock returned 33%. While it may not match the returns of those investors who seek out the latest hot stock, I will take 33% any year because within that 33% there were no losses, not one. As well the trades were easy to implement, I slept well every night and each one worked out flawlessly. This year the returns are in at 10% year to date so while not as good as last year in Aflac Stock, I may end up earning 20% for the year. That will mean a 50% gain in two years without any stress and again no losses to be concerned about.
I have learned over decades of investing that it comes down to knowing the stock, knowing the pattern that has developed and knowing which strategy to use and when to apply it. For example, yesterday I closed two naked put trades for 5 cents which I had sold earlier for 63 cents and 85 cents. Today another Aflac Stock trade ended that I started on May 29 through buying shares when Aflac Stock bounced off the Lower Bollinger Band. The end of the Bollinger Bands Strategy Trade means capital is released and can be reused for more trades.
The whole concept behind investing is about looking for and taking advantage of opportunities. For example with the end of the Bollinger Bands Strategy Trade and two naked put trades in Aflac Stock other investors might look at some of these trading opportunities.
Aflac Stock – Understanding Opportunity Investing
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