​Something that I see on an ongoing basis is retail traders diving full-on into a new strategy, immediately failing, and then hopping onto ANOTHER new strategy and repeating the experience. Instead of having ten years of experience in trading, most retail traders get one year of experience ten times, and it’s not additive. 
 
It’s frustrating for the trader since they never seem to get anywhere. Sound familiar? It should, I went through this exact pattern myself. I knew dozens of different options strategies, could employ about a hundred different technical indicators, and knew how to scan through thousands of stocks. I knew a little about a lot of things. Trouble is, I wasn’t making any money. 
 
And then I did something which was to become the tipping point for me - I stopped trading everything. I closed every open position and hit the big red “reset” button. 
 
I resolved to do NOTHING until I could define ONE chart and ONE strategy that I would master. Just one. If I could not get one strategy to work on one chart, then multiplying the complexity would not help. 
 
And it worked. In no time I had settled on the SPX chart and the iron condor; this combination seemed to give me the best chance for success, and it wasn’t but six months later that I turned in my two-week notice. Once you really get behind something and go deep, I found that I had no choice but to burn my bridges and go solo. 
 
So if you have already found your “one thing,” then how do you go about “earning the right” to ramp up your capital? 
 
Something that I advise new members of the Daily Target 100 trading room is to start out with a simulated trading environment. Learn the MECHANICS of the trade; how to enter, how to defend, and how to exit. If you can’t get this to work in a sim environment, then wasting live money won’t help. Commit to perfect mechanics before you move on to live capital. 
 
And when you go live, consider just trading one contract. Even if you have a larger account, and ESPECIALLY if you have a larger account. Create a business plan for yourself and identify performance metrics that you must meet before you increase position size. 
 
Earn the right. Be methodical. Find your one thing and specialize in it. That’s the only way that I know of that actually works. 
 
In your corner…Doc Severson

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One of the questions that I get all the time in our live trading rooms is: “When you are confident of your income strategy, when and how do you scale up in contracts?” It’s a great question and a sign that someone is progressing on their path to financial freedom, but there’s a number of ways to do it right…and several more ways to do this wrong!
 
First off, I caution investors that there seems to be an unwritten rule in the universe that “the very first trade that you scale up will be a loser.” I’ve seen this same thing happen to me in the past, and I think I know why this occurs…it’s because you get much more cautious when you’re carrying a larger position and you tend to trade not to lose instead of trading to win. Someone will conduct themselves in a markedly different manner when they are confident and expect to win a small trade, versus the tentative and fearful steps that someone takes when they are scared of loss. You’re not used to the heavier risk element of the larger position and it affects your behavior. 
 
So how should someone scale up if they’re doing well? The first answer is to have a money management plan that shows your position size based on your available capital for that strategy. Take the guesswork out of the challenge and map it out. 
 
And this is required for a sophisticated money management strategy like “Fixed Ratio Money Management.” This is a strategy that can lead to hockey-stick like performance graphs IF you have a positive expectancy strategy, AND you can follow a plan. I will be adding this strategy to the Daily Target 100 course by year’s end. 
 
But I think that the TRUE answer for most retail traders is not to scale up too far with aggressive strategies; find your comfort level (size-wise) and trade UP to that point in your plan. Once you hit that level, celebrate your success and then SWEEP that capital down to slower and more conservative strategies that are focused on long-term goals. 
 
And then build up your aggressive account again using money management strategies!
 
The more that you make this an easy plan to follow, the better you’ll do. As always, let us know if we can help fill in the blanks for you. 
 
In your corner…Doc Severson
 
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​I remember the exact moment that I committed to being a trader. 
 
I was returning home from a quarterly meeting of our local “inner circle” group in town. These were the most committed and talented trading students in town, hand-picked from a pool of hundreds by our local mentor. It was an honor to be selected to this group, by invitation only. The initial feeling of being selected was that you had “made it” since you were that much closer to a millionaire’s advice. 
 
But to the majority of the students in that group, it didn’t work out that way. Good intentions and optimism are not enough; I was to find out later that they lacked commitment. 
 
In the quarterly meeting, everyone went around the room and spoke to their goals for the upcoming year. The problem was that these were not really GOALS, they were more like WISHES. There is a big difference between the two, and you could see it in everyone’s eyes as they presented their list. And I fell right in line by presenting my list of “wishes” in the same overly-hopeful tone. Everyone nodded and golf-clapped when I was finished. 
 
Driving home, I was seething with rage and frustration. I KNEW that I had just mailed it in. I was fighting with the two sides of myself: 
 
Aggressive dude: WHY CAN’T YOU JUST COMMIT AND MAKE IT HAPPEN?!
 
Cautious dude: “ Oh I really wish I could but what happens if it doesn’t work out? What would you do then?”
 
There I was driving along, internally debating between the two sides of this argument, almost as a spectator, when I got the two sides to agree and hit the point of COMMITMENT. 
 
I WILL TURN IN MY NOTICE AND MY LAST DAY WILL BE JANUARY 29TH. 
 
I WILL MAKE THIS WORK BY APPLYING EVERY OUNCE OF EFFORT THAT I HAVE. I WILL LEAVE NOTHING ON THE TABLE. 
 
I AM ABSOLUTELY COMMITTING 100% OF MYSELF TO MAKE THIS WORK. 
 
I’m literally yelling at the top of my voice in my car as I pulled into my driveway. I was pumped up and strangely, felt completely at peace for the first time in a while. The debate had been settled; I had finally COMMITTED to a course of action. 
 
Did I have all the skills necessary to trade for a living at that point? Probably not, but I could not have made the leap had I not committed on that day. That put everything into motion and the momentum carried me through some tough days to come. 
 
Am I recommending that everyone quit their jobs and trade for a living? No. What I usually tell people is that “a good job that you enjoy is a trader’s best friend.” It takes the pressure off of HAVING to win the next trade just to put food on the table. At the minimum, have a few different income streams to keep the NEED out of your trading results. 
 
What I AM encouraging you to do is for you to find YOUR ONE THING and commit to it! You and you alone know exactly what you are supposed to be doing right now. 
 
COMMIT and get after it!
 
Doc 

It's very hard to time markets and it is also very hard to see a bear coming or a bull starting - especially when you are in the thick of things.  When you zoom out after the fact, there are always some great lessons to learn and that can help you in the future.

I didn't time the bear market that started in January 2022, but I was prepared for a change in the market trend.  My Fractal Energy Indicator was telling me something was up.  In fact, in my annual Year in Review webinar for students, I predicted a large sideways to down market.  If you zoom out and look at things over the last 12-15 months, that is exactly what we are in.  

But, I still was trading deep out of the money puts and put spreads because they had been so effective for the last several years.  When the market did fall preciptously, some of my positions were caught in the drop causing me to have to roll then out and move positions lower.  I still have some left to manage as I write this, especially in tech, but so far, I am managing the challenge of them and mitigating losses.  I fully expect that it will take into 2023 to unwind some of these.  I've had it happen before and will just methodically work through them.

One thing I did share at the beginning of 2022 with my students and started doing in mid-Janaury was to pivot to selling wide, out of the money Iron Condors on shorter time frames (5 and 20 days out).  My reasoning was that if we were going to be in a sideways to down market, adding trades beyond a month out would have a better chance of being attacked and I could achieve a higher velocity of money by turning my cash over faster with smaller returns that would add up to larger returns.  I created two new strategies:  Target 100 and Double Double.  The goal of Target 100 was to achieve 2% returns on capital risked each week and the goal with Double Double was to create a 4% return on capital risked each week selling further out.  In contrast, my typical return on risk per trade prior was 12-20% - so it was a big pivot.  But, if you do the math, 2% per week on capital risked is a 100% return per year and 4% is 200%.  Now, I'm a realist and know that not every trade will work out as planned and some weeks may just be risk off weeks, but if I am able to achieve 40-50% (basically half of the targets), I would be happy, especially in a bear market.

After trading the strategies for 5 months, I am excited to say that my students and I have not had a losing trade yet.  We have had a couple that we had to manage pro-actively, but have been able to consistently win with the strategies.  These strategies work well because of the higher volatility we have in the markets right now, so there will probably be a day when they are not as effective, but that would mean I can go back to my other strategies and trade them as they work well in low IV environments.

The important lesson is that "You cannot trade the market you want, you have to trade the market you have."  This means that you have to recognize when it is time to pivot.  This doesn't mean that you throw away your strategies or abandon them for new ones.  I am still selling options like I've always done.  It does mean, that you need to be realistic in trading what is working in the markets for the type of markets you have.  You will still find opportunities for your different strategies, some just may trade easier than others depending on the type of market you are in.

Ask yourself, how can I pivot or adjust my strategies to maximize my success in the markets in front of me?  Then go to work and figure out how to adjust them.