Yesterday I sent an article entitled “Oversold Not a Reason to Buy.”
After the article went out, we got flooded with responses over one line in particular…
“ Full Disclosure: Options360 just closed a bullish position in Capital One Financial (COF) for a 47% loss.”
Within minutes the smart alec emails came flying back…
“Holy Toledo, Steve admits to a losing trade?”
“I can’t believe Options360 finally admitted to a losing trade.”
And there were some questions that might have been legitimate, like…
“If you lost 47% of your money on a single trade, why would I want to join this service?”
So let me address the smart alecs and the legitimate questions right here and right now.
First about my track record claims.
More than 90% of the times that I mention our track record I give you are overall ROI for the year or YTD. That number includes winners and losers.
Occasionally I share a single trade win or loss – but a single trade is not a measurement of how the service is doing as a whole…
Giving overall results (including winners and losers) over a longer time frame is far more accurate.
So when I say that we had an 82% ROI in 2021, that means we started 2021 with a $10,000 trading account and ended with $18,200 in the account. That includes winners and losers.
Same with 2019 when we were up 77%.
Jan 1st 2019 = $10,000 in the model portfolio, Dec 31st, 2019 = $17,700 in the model portfolio.
Same in 2015, when we did 125% ROI
Begin with $10,000 and end with $22,500.
You get the point I hope.
I reset the model portfolio to $10,000 every year, so we can easily keep track of the yearly ROI.
You can follow the trades by scaling them for the amount of your portfolio.
So if you have $100,000 earmarked for Options360, you can trade 10 times the positions I recommend.
If you have $5000, trade half the position sizes.
Either way, you can mirror ROI for the Options360 model portfolio just by scaling.
Now to the question of losing 47% of the model portfolio on just one trade…
We didn’t. We lost 47% of THAT trade – however, we only had $734 at risk.
If you thought that we lost 47% of our model portfolio on a single trade, then I am begging you to learn about position sizing.
I would NEVER put 100% (or 50% or 25% or even 10%) of my entire allocated trading account on a single position. To do so would be stupid on my part and rise to the level of malpractice for my subscribers.
So even though we took a serious haircut on that particular position – we are still in line for a fantastic year.
I have said it before and I will say it again…
I expect 2022 to be one of, if not THE, best year ever in Options360.
It’s time you found out why…
Click here and claim your trial subscription now!
To Your Success,
Steve