The Ultimate Guide To The PowerX Strategy

The Ultimate Guide To The PowerX Strategy | Coffee With Markus | Episode 129 Intro: 0:00 What Is A Trading Strategy?: 3:04 Entering A Trade - Indicators: 7:41 Exiting A Trade: 22:30 Calculating Stop-Loss & Profit Target: 30:28 Stop-Loss & Position Sizing: 37:36 The PowerX Strategy: A Powerful strategy for stocks and options: What is a trading strategy? 1) What to trade? 2) When to enter? 3) when to exit With a profit With a loss -- Stop loss Challenges of trading strategies: Too Complicated Too Discretionary Don't have clear cut rules (like the previously mentioned 3) A trading strategy: 1) Easy to understand & execute 2) Needs to be Mechanical -- with indicators 3) Clear entry and exit rules 3 ways stock can move: 1) Up 2) Down 3) Sideways We need to know: When to buy? When to Sell? When to not trade? ENTERING A TRADE Indicators: for a rising market: 1) RSI - Relative Strength Index. Osilates between 0 - 100. Look over the RSI over the past 7 days to see if it is above 50. If so, the stock is more likely to go up. One indicator can give false positives, so it's a good idea to use more than one. 2) Stochastics (14, 3, 3) also want this to be above 50. If so the stock is more likely to go up. 3) MACD (12, 26, 9) If above the signal line, the stock is more likely to go up. Indicators: for a falling market: 1) RSI - Relative Strength Index. Osilates between 0 - 100. Look over the RSI over the past 7 days to see if it is below 50. If so, the stock is more likely to go down. 2) Stochastics (14, 3, 3) also want this to be below 50, if so the stock is more likely to go down. 3) MACD (12, 26, 9) If below the signal line, the stock is more likely to go down. Black Bars: When you see black bars, this means that only two of the three indicators are pointing in the right direction. MEANS MARKET IS MORE LIKELY TO GO SIDEWAYS. EXITING A TRADE Limit your losses. 2% rule - Never risk more than 2% of your account on any given trade. Profits. When to take profits? Golden Rule- 1:2. You take 2x the amount you risk as profits. You can be wrong half of the time & STILL make money. SRC Profits Systematic Repeatable Consistent How to calculate stop-loss & profit target: For Stop loss: ADR = Average Daily Range (7 days) Entry Price minus 1x's ADR = Stop loss. For Profit target: Entry price + 2x's ADR = Profit Target "Nobody ever went broke taking profits" Stop Loss and Position Sizing: Stop Loss (ADR) = $0.40 per share ($0.40 just an example) Overall Risk = $200 (2% based on a $10K account) Position size: how many shares should we trade? Overall Risk / Stop Loss 200 / 0.40 = 500 shares Recommended Videos: The PowerX Strategy Playlist:    • The PowerX Strategy   The Options Wheel Strategy Playlist:    • The Options Wheel Strategy   Options 101 Playlist:    • Options 101 - A Beginner's Guide To Tradin...   Options Income Trading Strategies:    • Options Income Trading Strategies   The 5 Biggest Mistakes New Traders Make:    • The 5 Biggest Mistakes New Traders Make   Generating SRC Profits - Here's How To Do It:    • How to Generate Systematic, Repeatable, an...   ================================================================================ ✅ First, subscribe to my channel here so you never miss a new video: https://bit.ly/3aLKLDz 📈 Watch My Daily Trading Routine Here (that takes me less than 15 min/day): https://bit.ly/2ICZkgX 📕 Get a FREE Hardback Copy Of My New Book “The Wheel Options Trading Strategy”: https://tinyurl.com/bvxjjz7k 💻 Need a broker? We prefer trading using Tradier! Sign up here: https://bit.ly/3uw3RaG 🌍 Outside of the U.S.? We suggest Interactive Brokers for all our international traders: http://rockwelltrading.com/ibkr ☕️ Start your morning just like Markus, with the MorningBrew Newsletter: https://bit.ly/32Xs6Uu ================================================================================ tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with Rockwell Trading Services, LLC whereby tastyworks pays compensation to Rockwell Trading Services, LLC to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Rockwell Trading Services, LLC by tastyworks and/or any of its affiliated companies. Neither tastyworks nor any of its affiliated companies is responsible for the privacy practices of Rockwell Trading Services, LLC or this website. tastyworks does not warrant the accuracy or content of the products or services offered by Rockwell Trading Services, LLC or this website. Rockwell Trading Services, LLC is independent and is not an affiliate of tastyworks.