Options 105: Money Management

Broke Millionaires

We all know of millionaires that are broke, physically, relationally and spiritually.  What good is my money if I’m overweight with diabetes, have high blood pressure or cancer?  If I’ve lost my wife, my kids and most of my friends, can my money replace them?  The Holy Scriptures say “what does it profit a man to gain the whole world but lose his own soul”?

When I first started trading options, I was trying to build a large portfolio and account.  I made the classic mistakes of not taking profits, not cutting losses short and staying in trades too long.  I would get a nice account built up and then one or two losses would set me back to where I was.  I did this over and over until my wife lost confidence in me but worse yet, I lost confidence in myself.

It took me many months of paper trading, (practice trades), and encouragement from a good friend to get me back on track.  I had to re analyze what my purpose originally was.  It wasn’t to get rich but to enable me to make a good living from trading.  Also in that initial purpose was to be able to teach my Daughter and Daughter-in-law a system of generating money from home so they could afford to home school my grand kids.

After months of testing in both up and down markets I am confident the system I outline in Options 101 thru options 104 can do just that.  If a person is willing to take the time and effort to absorb these few simple to implement steps, they can create a weekly income from $300 -$1,500 with controlled risk and very little time involvement.

Following are my points to money management using this system:

  • Initially trade only ½ of my account.
  • Each Friday withdraw only ½ of my profits.
  • Pay a tithe (10% to church or charity) on that half.
  • Place 10% of that half in a secure savings account.
  • Use 80% of that half for bill paying, something fun as a reward or groceries, etc.
  • Leave ½ in my account.
  • Always leave enough in my account to cover 2-3 losses in a row.

The worst thing that can happen to trader initially is to suffer a couple of losses and no have the backup to stay in the game.

 

Published by Dennis Detweiler

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