In the video titled “This is How You GROW A Small Account With Options (Safely & Consistently)” by Options with Davis, you will find strategy blueprints available for free download. This content is aimed at individuals with small accounts under $20,000 who are struggling to consistently grow their funds. The video claims to share a highly effective strategy with a 91% win rate and discusses the important role of proper capital allocation and taking a large enough sample size of trades for accurate performance assessment. By using the put Condor strategy, which combines a short put spread and a long put spread, viewers can learn how to construct the strategy on the option chain and adapt it to their account size and risk tolerance.
If you have a small account size and are finding it challenging to consistently grow your funds, the video “This is How You GROW A Small Account With Options (Safely & Consistently)” by Options with Davis offers a strategy blueprint for free download. This strategy, known as the put Condor, has a 91% win rate and allows for no risk to the upside. The video emphasizes the importance of proper capital allocation and taking a sufficient sample size of trades for accurate performance assessment. By following this strategy, individuals can learn how to consistently grow their small accounts under $20,000.
The Importance of Consistently Growing a Small Account with Options
As an individual with a small account, you may be facing struggles when it comes to consistently growing your funds. This can be frustrating and discouraging, but it’s important to remember that there are solutions available to help you overcome these challenges.
One of the main obstacles experienced by individuals with small accounts is the limited capital available for trading. With smaller funds, it can be difficult to take advantage of various options trading strategies that require larger investments. Additionally, the risk of losing a significant portion of your account can be higher, making it even more challenging to grow your funds consistently.
To address these struggles, it is crucial to have a highly effective strategy that is specifically designed for small accounts. This strategy should minimize risks while maximizing potential returns, allowing you to steadily grow your account over time.
The Need for a Highly Effective Strategy
Using the wrong options strategy can hinder the growth of your small account. Many strategies, such as credit spreads, tend to be more directional in nature. This means that they rely on accurately predicting the direction of the market, which can be challenging for individuals who struggle with directional trades.
To consistently grow your small account, it is advisable to use an omnidirectional strategy. This type of strategy removes the need for accurate direction prediction and instead focuses on other factors that can contribute to profitability. By adopting a highly effective strategy that is suitable for small accounts, you can overcome the challenges and obstacles associated with directional trades.
The Benefits of Growing a Small Account Safely and Consistently
Growing a small account safely and consistently offers numerous benefits. Firstly, it allows you to build a solid foundation and increase your capital over time. By consistently growing your account, you can gradually increase your trading size and take advantage of more profitable opportunities in the market.
Furthermore, growing a small account with options provides flexibility in terms of risk management. Options strategies such as the put condor, which will be discussed later in this article, offer defined risk and reward ratios. This allows you to manage and limit potential losses while still allowing for significant profit potential.
Consistently growing a small account also instills discipline and patience, two key attributes for successful trading. By sticking to a well-defined strategy and seeing gradual progress, you can develop a long-term mindset and avoid the temptation to take unnecessary risks.
Understanding the Risks of Using the Wrong Options Strategy
Using the wrong options strategy can have a significant impact on the growth of your small account. One of the main risks is hindered account growth. Strategies that are not well-suited for small accounts can lead to excessive losses, resulting in a reduction of available capital.
Challenges with directional trades are another risk associated with using the wrong options strategy. Predicting the direction of the market accurately is not easy, especially for individuals who are new to trading or struggle with technical analysis. Relying on directional trades can lead to inconsistent results and potential losses.
Incorrect strategy selection can also have a detrimental impact on overall trading performance. Strategies that do not align with your investment goals, risk tolerance, and account size can result in poor decision-making and reduced profitability. It is essential to choose a strategy that suits your individual circumstances and objectives.
Overview of the Suggested Strategy: Put Condor
The put condor is a highly effective strategy for consistently growing a small account with options. It combines two different strategies, the short put spread and the long put spread, to create an omnidirectional approach.
The short put spread, also known as a bull put spread or a put credit spread, involves selling a put option with a lower strike price and buying a put option with a higher strike price. This strategy generates a credit or premium, which helps to offset potential losses.
The long put spread, on the other hand, is a bearish strategy that involves buying a put option with a lower strike price and selling a put option with a higher strike price. This strategy allows for the purchase of protection in case the market moves against the trade.
By combining these two strategies, the put condor offers a higher win rate and eliminates the risk to the upside. This means that even if the market moves significantly in the opposite direction, the potential losses are limited and defined.
Explaining the Risk-Reward Ratio of 1:3 or Better
One of the key features of the put condor strategy is its risk-reward ratio of 1:3 or better. This ratio refers to the potential reward compared to the potential risk of a trade.
In the case of the put condor, the risk is limited to the difference between the strike prices of the options involved in the strategy. The reward, on the other hand, is the credit received from the short put spread. This credit can be significantly higher than the potential risk, leading to a favorable risk-reward ratio.
A risk-reward ratio of 1:3 or better means that for every unit of risk taken, there is the potential for three or more units of reward. This ratio provides a favorable balance between risk and reward, helping to maximize profitability and minimize potential losses.
It is important to note that the risk-reward ratio may vary depending on the specific parameters of the put condor strategy. It is crucial to carefully analyze and adjust the strategy to ensure that it aligns with your risk tolerance and investment goals.
Proper Capital Allocation and Trade Sample Size
Proper capital allocation is a critical factor in options trading, especially when it comes to growing a small account consistently. Allocating an appropriate amount of capital to each trade helps to manage risk and maintain a balanced portfolio.
When trading options with a small account, it is essential to avoid overexposure to any single trade. Allocating a small percentage of your account to each trade ensures that potential losses are limited, even if a trade does not go as planned.
In addition to capital allocation, taking a sufficient sample size of trades is crucial for accurate performance analysis. Trading only a few trades may not provide an accurate representation of the strategy’s true performance. To gauge the effectiveness of the put condor strategy, it is advisable to take at least 100 trades to assess its win rate and overall profitability.
By implementing proper capital allocation and ensuring a sufficient sample size, you can effectively evaluate the performance of the put condor strategy and make informed decisions for future trades.
Constructing the Put Condor Strategy
To construct the put condor strategy, it is important to utilize the option chain and carefully select the appropriate strike prices. The option chain provides a comprehensive view of available options contracts, allowing you to choose the ones that align with your strategy and account size.
When constructing the put condor, it is advisable to start with the short put spread. Look for options with strike prices that are around 15 to 20 deltas. These strike prices should provide a balance between profitability and risk management.
After selecting the strike prices for the short put spread, it is time to consider the long put spread. The cost of the long put spread should be lower than the credit received from the short put spread. This ensures that there is no risk to the upside, even if the market moves significantly in the opposite direction.
It is important to note that the exact strike prices and parameters of the put condor strategy may vary depending on your individual account size and risk tolerance. Adjustments can be made to cater to your specific needs and objectives.
Considering both the option chain and your own risk tolerance helps to construct a put condor strategy that aligns with your account size and investment goals.
Case Studies and Real-Life Examples
Examining successful trades with the put condor strategy provides valuable insights into its profitability and risk management. Case studies and real-life examples help to illustrate the potential of this strategy in growing a small account consistently and safely.
By analyzing the profitability and risk management of past trades, traders can gain a better understanding of the strategy’s true performance. This analysis can assist in making adjustments and improvements to maximize profitability and minimize potential losses.
Drawing insights from practical applications of the put condor strategy encourages traders to consider implementing it in their own trading. Real-life examples often provide inspiration and motivation for traders to explore new strategies and techniques.
Exploring Additional Videos and Resources
For further learning and in-depth understanding of options trading strategies, additional videos and resources can be helpful. These resources provide valuable information, insights, and blueprints that can enhance your trading knowledge and skills.
Suggested videos related to the put condor strategy can complement the information provided in this article. These videos may cover specific aspects of the strategy, provide additional case studies, or offer insights from experienced traders.
Additionally, strategy blueprints available for free download can be a valuable resource for individuals with small accounts. These blueprints provide step-by-step instructions on how to implement the put condor strategy effectively, taking into account various factors such as account size and risk tolerance.
Expanding knowledge on options trading strategies broadens your trading toolbox and increases your ability to adapt to different market conditions. By continuously learning and exploring new resources, you can stay updated and improve your trading skills.
Steps for Implementing the Put Condor Strategy
Implementing the put condor strategy involves several steps that help ensure its effective execution. These steps provide a systematic approach to trading and help minimize potential risks.
Identifying suitable market conditions is the first step in implementing the put condor strategy. Assessing the overall market trend, volatility, and potential catalysts helps you determine whether the strategy is suitable based on current market conditions.
Selecting the underlying asset is the next step. Choosing assets with high liquidity, options availability, and a solid understanding of their price behavior is crucial for successful implementation of the strategy.
Analyzing options for strategy implementation is the final step. This involves evaluating the option chain, strike prices, and potential risks and rewards. Careful attention to detail in this step helps construct the put condor strategy with optimal risk-reward dynamics.
By following these steps, traders can systematically implement the put condor strategy and increase their chances of success. Each step plays a crucial role in ensuring the strategy’s effectiveness and aligning it with your individual trading goals and preferences.
Risk Management and Contingency Planning
Risk management is an essential aspect of options trading and should not be overlooked. Without proper risk management, even the most effective strategy can lead to significant losses and hinder account growth.
Implementing stop loss orders is a key risk management technique. This involves setting predetermined exit points for trades to limit potential losses. Stop loss orders help protect your account from excessive drawdowns and can be adjusted based on market conditions and individual risk tolerance.
Evaluating potential downsides and scenarios is another important aspect of risk management. By considering various market scenarios and their potential impact on the put condor strategy, you can develop contingency plans and be prepared for unexpected market movements.
Preparing for unexpected market movements is crucial in options trading, as the market can be volatile and unpredictable. Having contingency plans in place helps you react to changing market conditions and make informed decisions.
Conclusion
Consistently growing a small account with options is an achievable goal when the right strategies are implemented. By adopting the put condor strategy, individuals with small accounts can overcome the struggles associated with directional trades and limited capital.
The put condor strategy offers a highly effective approach, combining short put spreads and long put spreads to create an omnidirectional strategy. With a higher win rate and no risk to the upside, the put condor strategy provides safety and consistency in growing a small account.
Proper capital allocation, sufficient sample size, and careful strategy construction are crucial components of successfully implementing the put condor strategy. By utilizing the option chain, adjusting for account size, and considering risk tolerance, traders can optimize the strategy to suit their individual circumstances.
Real-life examples, additional videos, and resources further enhance understanding and knowledge of options trading strategies. By continuously learning and exploring new resources, traders can expand their trading skills and adapt to changing market conditions.
Risk management and contingency planning are essential aspects of options trading that should be incorporated into your trading plan. By implementing stop loss orders, evaluating downsides, and preparing for unexpected market movements, you can minimize potential risks and protect your small account.
In conclusion, consistently growing a small account with options is possible when a highly effective strategy, such as the put condor, is implemented. By following the steps outlined in this article and monitoring the results, traders can achieve steady account growth and long-term success in options trading.