Finding great trades is very doable, but it helps when you have the right tools and the right guidance. I am going to share one of my favorite trading tools below, but I also want to give you a link that will help you get that guidance that can make all of the difference. I put together a very quick video I want you to see that shows the best way to wipe out the trading hurdles that plague so many of us. Check it out here.
Take a look at this example of a trade I just spotted. Finding great bargains that are overbought or oversold doesn’t have to be as hard as it may seem. Let me show you what I noticed on a chart of ConocoPhillips (COP).
Be sure to check out the update on a previous trade at the bottom of this message.
On the chart below, I included the Channel Commodity Index indicator which I use to help me spot powerful reversals that are setting up. If you want more information on the CCI click here.
On the CCI at the bottom of the chart you’ll see highlighted areas that look like fins. These tell us there is a high likelihood that the price is changing directions. When that happens, it creates a great trading opportunity.
In this example we want CCI on COP to go up to create a clear fin shape. We also want the price to go up to at least $118 before entering a trade. The first target would be $120.
To buy stock shares of COP today, price would be approximately $117.69. If price went to $120 you would make about $2.31 per share.
That said, option trading offers the potential of a smaller initial investment and higher percentage gain even when price is expected to rise or fall. Let’s take a look.
If you bought one Call option contract covering 100 shares of COP’s stock with a Sept 15th expiration date for the 120 strike, premium would be approximately $2.43 today, or a total of $243 per contract. If the stock price rose the expected $2 the premium might increase approximately $1.00 to $343 per share on your 100-share contract. This is a 41% gain over a couple weeks.
Options can offer a win, win, win trade opportunity. They often offer a smaller overall investment, covering more shares of stock, and potentially offer greater profits.
I love to trade, and I love to teach. It is my thing.
Past potential trade update:
Last week we discussed buying ABBV calls. On 8-9 the Sept 15th 160 call was $ .60. On 8-11 you could have sold for $ .73, a 22% profit.