July 28, 2008

Option trading - " The formula tells them ”and defines investment action (or lack of it) in terms of their own portfolios and investment objectives.

In addition, it has” as we shall see”built-in safeguards against the indecision that tends to afflict almost every investor at some time, the temptation to become over-reckless or over-conservative, and even the imperfections of the formula itself. The primary objective of a formula is to place the investor in a permanent and continuous profit position. It is gauged to produce profits”over a period of time”whatever happens in the market. When stock prices rise, his portfolio shows a profit. When they fall, he steps up his purchases at bargain levels. At intermediate points, he relies on the indications given by the formula 'to continuously strengthen his profit position.

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