Be open to pyramiding, especially when the market is trending positively. Interested in accessing the Optioneering Calculators? Join one of Chuck’s Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade.
- The leverage provided by call options allows you to maximize potential returns on bullish stocks.
- And with targeted trade returns of up to 150% and 3-4 trade recommendations per month, it won’t take many winners to make this strategy pay off.
- Yesterday, we looked at a Daily Price Chart of Murphy USA Inc., noting that the stock has been making a series of new 52-Week Highs recently.
- For this specific call option, the calculator analysis below reveals if WELL stock increases 5.0% at option expiration to 89.03 (circled), the call option would make 45.0% before commission.
- A market in motion tends to stay in motion.
This service is designed for traders who want the thrill of 150% or even higher potential returns, but don’t like the risk of trying to capture these gains in just days or a few weeks. Of course, not every trade in this service will deliver winners. But at Schaeffer’s we use strict trading rules to cut our losses short.
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A power trend will usually end with the 21-day line crossing back below the 50-day. As long as the 1-Month price remains above the 10-Month SMA, the stock is more likely to keep trading at new highs and should be purchased. This crossover indicated the buying pressure for WELL stock exceeded the selling pressure. For this kind of crossover to occur, a stock has to be in a strong bullish uptrend.
We screen for stocks with momentum using our proprietary tools. As mentioned in IBD’s Weekend Stock Market Update, the most recent power trend started on May 8, 2020 and remains intact. One should be open to more aggressive growth names breaking out of PowerTrend sound bases and being open to pyramiding into those positions that are showing progress. If you use margin, this would be the only time to use it. Power trends are the times to play aggressive offense. Aggressive offense still means 100% discipline.
Пополнение счета и вывод средств в Power Trend
Now, since WELL’s 1-Month Price is trading above the 10-Month SMA this means the stock’s bullish rally will likely continue. Let’s use the Hughes Optioneering calculator to look at the potential returns for a WELL call option purchase. Before breaking down WELL’s monthly chart let’s first review what products and services the company offers. Just because a power trend is your opportunity to trade most aggressively, don’t think that means your other rules go out the window.
And with targeted trade returns of up to 150% and 3-4 trade recommendations per month, it won’t take many winners to make this strategy pay off. Using the 1% Rule to select an option strike price can result in a higher percentage of winning trades compared to at-the-money or out-of-the-money call options. This higher accuracy can give you the discipline needed to become a successful option trader and can help avoid 100% losses when trading options.
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Sideways, or rangebound, markets are some of the trickiest times to be an investor. There is still money to be made, but your likelihood of success drops dramatically. Trading stocks is like dancing with a partner who always leads. IBD Market School’s power trend is the aerial flourish to the crescendo of a particularly strong uptrend.
Now, let’s begin to break down the monthly chart for WELL stock. IBD researched the strongest uptrends throughout the trading history of the Nasdaq composite and came up with IBD’s Market School black and white rules to recognize them as early as possible. Rangebound markets earned the nickname, “the chop fest.” Besides losing some money, these are very frustrating for trend-followers. Most circuit breakers are triggered by a break of the 50-day line while the Nasdaq is more than 10% off the most recent high.
Торговые инструменты и платформы Power Trend
A confirmed uptrend is when your real money is made, and this is when you can find a power trend. If you are fortunate enough to be trading during a power trend, this is when you will likely be fully invested because stock market conditions are so favorable. Chuck Hughes has just launched his exciting new trading service program, Lightning Trade Alerts.
The leverage provided by call options allows you to maximize potential returns on bullish stocks. When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price. Receive winning trades delivered to you every week or take advantage of our auto-trade program and have the AI do all the trading for you. A power trend started in October 2020 (1) as the Nasdaq began a four-month advance of about 20%. The power trend came under pressure about a week later (2) and resumed in full strength on Nov. 24, 2020 (3). It was under pressure again on Feb. 25, 2021 (4) until a circuit breaker ended the power trend March 4 (5).
We find options with the potential to bring in big gains. A power trend typically ends when the 21-day crosses back below the 50-day. For this specific call option, the calculator analysis below reveals if WELL stock increases 5.0% at option expiration to 89.03 (circled), the call option would make 45.0% before commission. Welltower Inc., a real estate investment trust and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Yesterday, we looked at a Daily Price Chart of Murphy USA Inc., noting that the stock has been making a series of new 52-Week Highs recently.
When you use the 1% Rule to select a WELL in-the-money option strike price, WELL stock only has to increase 1% for the option to breakeven and start profiting! Remember, if you purchase an at-the-money or out-of-the-money call option and the underlying stock closes flat at option expiration it will result in a 100% loss for your option trade! See the most advanced Artificial Intelligence program for stock options ever offered to retail traders. This cutting-edge technology can bring your accuracy rate to nearly 90% winning trades.