Hi everyone. Today I decided to make a little different video. This question has come up in Kilo Club so many times: I do not think I have enough money to trade options, how do I make some basic income? So today I want to talk for a moment about stock. This is not financial advice. I am not a certified trading advisor and I am not a CPA.
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Here is what I really want you to hear: do not underestimate the power of being able to swing trade stock in your portfolio. This is an overlooked skill. It is not hard to learn, it has the lowest barrier to entry, and anyone can do it. It just takes a little time and patience.
Let me keep the charting as basic as I possibly can, because that is the whole point. On my chart I have the 50 EMA in green, the 100 EMA in red, and the 200 SMA in yellow. I also use two Invest Answers tools, a mean reversion indicator and a confluence indicator with the arrows. They are some of the best I have seen, and I am not paid to say that. I use them because they help me trade better.
I always tell people to know your strength and become the best at it. Mine turned out to be options, but I knew I had to understand technical analysis first. Think of it this way. Fundamental analysis tells you what and why: what stock you should be buying, what the macro picture is. Technical analysis tells you when to get in. It is a timing tool, and a very powerful one.
Two buckets, and I only trade one of them
Before the examples, understand how I split my money. About 80 percent of my portfolio is a bag I do not touch. It grows, and it funds exercising my options two and three years out. Everything I am showing you today is my short-term trading bag, which is only about 20 percent of my portfolio. And I do not take that 20 percent and dump it into one stock at one entry. I scale in. I build pyramids, which I teach in MM68.
I post these trades in Rapid Fire almost every single day. I am not a trade-alert service, but I have found that if I show you a real trade enough times, it finally clicks. So let me show you a handful of real ones.
Real trades, start to finish
AMD. I bought a little at the 50 EMA, more at the 100 EMA, and a lot more when we were down at 445, for an average around 455. When we came back up to the 100 EMA with a five-minute buy signal and a cluster of green confluence arrows on September 3, I bought more. A few days later I sold some at 499 and more at 521. Did I leave a little on the table? Sure, and I do not care. I will never squeeze the last drop of blood out of a turnip. Averaging in at 455 and getting out at 499 and 521 inside a six to eight day window is a phenomenal trade.
Marvell is one of my absolute favorites, and I have traded in and out of it all summer. My entry was August 18, on a green buy signal sitting right on the 50 EMA. And notice you have time here, this was about 16 hours, four bars, to get in, so do not panic that you will miss it. If you are a surfer, you miss one wave and you catch the next one. I sold August 27, right before earnings, when I saw a red sell signal and the earnings marker on my chart. That run went from 215 to 250, a 35 dollar move in nine trading days, more than 15 percent. Then when it sold back off to the 100 EMA, same setup, I got right back in at 215, 220, and 203 to 204, and I have been selling into 230 and 240.
Micron moves like crazy and I love it. On August 24 I bought at 902, right on the 50 EMA with a green arrow on the five-minute chart. I sold some at 950 at the top of the bull flag, more at 1000, and a little more at 1021, and I still hold a small piece.
Nvidia is not the fastest mover, but she is consistent, and I like consistency. On August 24 I bought a pullback to the 50 EMA around 210, with the 100 EMA at 205, support at 195, and major support at 190. All those moving averages were stacked tight together with a wall of support underneath, and earnings were a few days out. I averaged 210 and sold at 229 and 233 a few days later, a 20 dollar move. That is income trading, and notice there are no options involved anywhere in this.
I will be honest with you: not every trade wins. My Google trade is down about 10 dollars right now, a small loser. But the others are 10 and 15 percent moves, and that is the point.
Managing the risk
What derails a system like this? A bear market, the whole market rolling over. When that happens, I lighten up that small trading portion, I wait, and I dollar-cost-average at better levels. I never put every dollar in at one price. I use strategic entries and I build pyramids: I do not load up at the top, I scale in and add more and more as the stock falls to my levels. And I only do this on stocks that are clearly in an uptrend, trading above the 200 SMA, holding above the 100, and holding key support. This is the same entry discipline I walk through in MM55 and MM47.
You do not have to start with options
Here is all I really want to get across today. If you have been telling yourself that you would love to learn to trade but you are just not meant for options, I am here to tell you that you do not have to start there. You can learn basic technical analysis, practice a little, and move forward at your own pace. Every broker and clearing firm has free paper-trading accounts, so you can try it and it costs you nothing. If you try it and do not like it, fine, do not do it. But do not put a mental barrier in your own way. I do not know a single options trader who started on day one trading options. People start out learning technical analysis and stock trading, and then they progress to options. There is plenty of money to be made simply swing trading stock.
Thank you so much for watching, and have a great day.
This one is free. If it helped, come trade alongside me every day:
🔥 Rapid Fire, my real-time market commentary, $69.99/month: https://www.optionsgoddess.com/rapid-fire
🏆 Kilo Club, all 9 courses + community + live Q&As + Market Minutes, $169.99/month: https://www.optionsgoddess.com/kilo-club