Alright, in this video, I’m going to share with you my proprietary method for entering into the market and finding trades without the need for chart patterns or indicators. I call it the Unlimited Income Trading Method. It’s a simple yet effective approach that solely relies on price levels. The idea behind this method is to constantly have multiple positions in the market generating income. Most traders opt for horizontal diversification, putting on a single position across different stocks, but this method can be problematic during market crashes. The better approach is vertical diversification, where multiple positions with different strategies, strikes, and dates are placed on the same underlying asset. I’ll explain how to use an income grid to determine when to enter a neutral, bullish, or bearish strategy based on price levels. I’ll also provide examples of trades using this method on the IWM stock. The takeaways include the benefits of diversifying by price levels, dates, strikes, and strategies, as well as the flexibility to customize the method to suit individual preferences.
1. Introduction to the Unlimited Income Trading Method
Welcome to the Unlimited Income Trading Method! In this article, we will delve into a proprietary method for entering the market that does not rely on chart patterns or indicators. This method offers a simple yet effective approach to trading options using price levels alone.
1.1 Proprietary method for entering the market
The Unlimited Income Trading Method is a unique approach to entering the market and finding trades. It eliminates the need to analyze chart patterns, candlestick patterns, or rely on indicators. Instead, it focuses solely on price levels as a key factor in entering trades.
By using this proprietary method, traders can have a more objective and systematic approach to their trading decisions. It removes the subjectivity often associated with analyzing various factors and provides a clear framework to enter trades.
1.2 No reliance on chart patterns or indicators
Traditionally, traders heavily rely on chart patterns and indicators to make trading decisions. However, the Unlimited Income Trading Method takes a different approach by completely removing the need for these elements.
Chart patterns and indicators can often be subjective and may lead to analysis paralysis. By eliminating their use, traders can have a more streamlined and efficient trading process. This method provides a clear and straightforward way to enter trades without getting overwhelmed by excessive analysis.
2. Focus on Diversification
Diversification is a critical aspect of any trading strategy, and the Unlimited Income Trading Method places a strong emphasis on it.
2.1 Importance of diversification
Diversification involves spreading investments across different assets to reduce risk. In the context of trading, diversifying your positions can help mitigate potential losses and protect your capital.
By constantly having multiple positions in the market, the Unlimited Income Trading Method aims to generate income while reducing overall risk. This approach allows traders to have exposure to various assets and strategies, rather than relying on a single position.
2.2 Horizontal diversification
Horizontal diversification, commonly employed by traders, involves putting on a single position across multiple stocks. This strategy aims to reduce risk by spreading investments across different companies. However, it may have drawbacks during market crashes when all stocks are affected.
2.3 Drawbacks of horizontal diversification
During market downturns, horizontal diversification may not provide the expected level of risk mitigation. When all stocks in a portfolio are affected by market volatility, the diversified positions may still face substantial losses. This limitation calls for alternative methods to achieve a more effective diversification approach.
2.4 The concept of vertical diversification
To overcome the limitations of horizontal diversification, the Unlimited Income Trading Method introduces the concept of vertical diversification. This approach involves putting on multiple positions with different strategies, strikes, and dates on the same underlying asset.
By diversifying not only across different assets but also across various strategies, traders can better adapt to different market conditions. Vertical diversification allows for a more comprehensive risk management approach by spreading investments across a wider range of trading strategies and dates.
3. Utilizing an Income Grid
The Unlimited Income Trading Method incorporates the use of an income grid, which serves as a valuable tool in determining trade entries.
3.1 Understanding the income grid
The income grid is a visual representation of price levels on a chart. It enables traders to identify specific levels at which they can enter trades. By drawing lines on the chart representing these price levels, traders gain a clear understanding of potential entry points.
3.2 Determining neutral, bullish, and bearish strategies based on price levels
Each price level on the income grid offers an opportunity to enter a trade using different strategies. Traders can choose between neutral, bullish, or bearish strategies based on their analysis of the market at that particular level.
Neutral strategies, such as iron condors or strangles, can be employed when the market is expected to remain range-bound. Bullish strategies, such as bull put spreads or jade lizards, can be utilized when the market is deemed likely to rise. Conversely, bearish strategies, such as bear call spreads or bearish strangles, can be applied when the market is anticipated to decline.
3.3 Using consecutive levels to determine market direction
The income grid also allows traders to identify consecutive price levels and utilize them to determine the overall direction of the market. By analyzing the movement of these consecutive levels, traders can gain insights into the market’s momentum and make informed decisions on their trading strategies.
3.4 Resetting the levels as needed
Market conditions are ever-changing, requiring traders to adapt their strategies accordingly. The Unlimited Income Trading Method allows for the resetting of price levels on the income grid as needed. This ensures that traders are continuously evaluating and adjusting their trades based on current market dynamics.
4. Examples of Trades using the Method
Let’s explore some examples of trades using the Unlimited Income Trading Method, focusing on the popular IWM stock.
4.1 Trading the IWM stock with the Unlimited Income Trading Method
Suppose you are interested in trading the IWM stock. Instead of placing a single position on the stock, the Unlimited Income Trading Method encourages multiple positions with different strategies.
4.2 Strategies employed: strangles, iron condors, J lizards, short put spreads
Using the Unlimited Income Trading Method, you can employ various strategies on the IWM stock. Strangles, iron condors, J lizards, and short put spreads are examples of strategies that can be utilized to take advantage of different market conditions.
By diversifying your strategies on the IWM stock, you can navigate different price levels and profit potential, maximizing your opportunities for income generation.
5. Benefits of Diversification and Customization
Diversification and customization are key benefits offered by the Unlimited Income Trading Method.
5.1 Diversifying by price levels, dates, strikes, and strategies
The method enables traders to diversify their positions, not only across different assets but also across various price levels, dates, strikes, and strategies. This multifaceted diversification approach helps spread risk and provides opportunities for income generation in different market scenarios.
5.2 Flexibility to customize the method based on individual preferences
The Unlimited Income Trading Method also allows for flexibility and customization. Traders can tailor their approach based on their individual preferences, risk tolerance, and market outlook. Whether it’s by adjusting price levels, selecting specific strategies, or choosing different assets, the method provides a framework that can be tailored to suit individual trading styles.
6. Conclusion
The Unlimited Income Trading Method offers a proprietary and effective approach to entering the market without relying on chart patterns or indicators. By focusing on diversification and utilizing an income grid, traders can take advantage of various opportunities across different assets and strategies.
The vertical diversification approach, coupled with the flexibility to customize the method, allows traders to better manage risk and adapt to changing market conditions.
Through the examples provided, we have seen how the Unlimited Income Trading Method can be applied to trades involving the IWM stock, utilizing strategies such as strangles, iron condors, J lizards, and short put spreads.
Overall, the Unlimited Income Trading Method offers a comprehensive and practical approach to trading that can enhance your trading results and enable consistent income generation.