The 4 Step Approach
I want to share with you how I generate trading ideas, and how I then take these ideas and turn them into a trading strategy.
When developing a new trading strategy, I typically use a 4 step approach to this method.
How I Get Started Finding Trading Ideas
First I identify a potential trade. I then try to determine what I can do with the trade determine whether or not it will even work.
After that, I have to test this idea, and I’m going to show you exactly how to do that in this article.
Step number three, this is where I develop the exact rules for the trade.
I like to develop very clear-cut rules. I do this so that I know exactly what to do and when to do it.
Developing clear-cut rules also ensures that this actually matures from an idea into a strategy.
I then start step number four, developing the tools. As a trader, having the right tools available makes my life so much easier.
Now, you may already know that I have several tools at my disposal.
For example, when selling put options, I use my Put Options Calculator. When I use the PowerX Strategy I have the PowerX Optimizer.
