Ride the bull market with confidence! The strategy is known as the Bull Trade, and it’s a powerful, profitable, and simple trading strategy that capitalizes on the passage of time in addition to natural price movements. In this video, we will walk through 3 months of trading this strategy where we had a combined return of over 50%*!
Click here or in the video below to discover why the Bull is one of our all time favorites!
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What is the Bull Trade Strategy?
The Bull Trade strategy is designed to profit from both bullish and neutral market conditions, and it can even perform well in sideways or occasionally even bearish markets. This strategy has a spectacular record when trading fully non-subjectively but is even more effective when executed with little context appropriate subjective timing on entries and exits.
Here’s a breakdown of how this strategy works in a fully non-subjective context:
- Target Market: This strategy is intended to be traded on the Russell 2000 index. However, the IWM (the ETF tracking the Russell 2000) maybe used to create smaller sized positions.
- Entry Rules: On the Wednesday closest to 65 days until expiration, enter a 10-point wing bullish vertical spread. You should aim for a credit of more than $2.50 per contract. This involves selling a put option and buying another put option at a lower strike price, creating a vertical spread.
- Management: Check the position daily, but only if the market is down significantly. If the market is up, there’s generally no need to monitor it.
- Exit Rules: There are two conditions for exiting:
- If the position drawdown exceeds the initial credit received (e.g., $2.50 per contract) at a predesignated checkpoint time.
- When the next monthly trading cycle (or weekly cycle if trading weekly options) reaches 65 days to expiration.
- Capital Requirements: For trading the Russell 2000, you’ll need a minimum of $750 in total capital. For IWM, it’s $75. Your profit target is the maximum credit received, with an exit loss trigger set at approximately 33% of the planned capital (e.g., $250 per contract).
A Practical Example
Let’s walk through a real-world example of how this strategy performs over a few months.
Example 1: June 21, 2024 Expiration
- Initial Trade: We enter the trade on April 17, 2024, at 65 days to expiration with a 10-point wing bullish vertical spread. Suppose we receive a credit of $3,280 for this spread. The actual capital in the position is $6,720.
- Result:
- Profit of $2,812. We exit this trade and prepare for the next cycle.
Example 2: July, 2024 Expiration
- Initial Trade: For the July cycle, we aim to achieve a credit close to $2,500. We end up with a with a credit of $2,870.
- Result:
- Loss of $1,437.50.
Example 3: August 24, 2024 Expiration
- Initial Trade: For the July cycle, we aim to achieve a credit close to $2,500. We end up with a with a credit of $2,830.
- Result:
- Profit of $2,512.
Performance Review
In reviewing the results from these trades:
- Trade By Trade Returns: Approximately 37.5%, -19.2%, and 33.5%*.
- Overall Gain: 51.8% of the planned capital in roughly 90 days.
The Bull Trade strategy demonstrates that simplicity can yield substantial profits. With just six straightforward trade executions (three entries and three exits), this strategy provides a compelling way to achieve significant returns while managing risk effectively.
Final Thoughts
The Bull Trade is a testament to how effective high-probability options trading can be when executed with precision and discipline. It leverages time decay and market movement to its advantage, allowing for a high probability of success in a large variety of market conditions.
If you found this breakdown useful, please like, share, and comment on our content. Your feedback helps us continue to provide valuable insights. And as always, I’m here to answer any questions you may have about this or other trading strategies.
Happy trading, and may your trades be profitable!
LEARN THIS TRADING STRATEGY!
The Bull is one of four simple trading strategies that is taught in the Fundamentals in Trading or FIT Library which is available to all GO and PRO members.
This rule-based strategy has a minimum capital requirement is $750 and takes about 5 minutes a day to manage (We also teach a version you can trade with as little as $75 in the FIT Library).** Click here to learn more!
FOLLOW THIS STRATEGY!
A winning trade is very common with the Bull trade. Become a GO or a PRO member to follow this trading strategy on the Options Trading for Income by the Guidelines weekly webinars. This trading strategy is for Trading Success Blueprint traders in Stage 1 and above to focus on.
SEE OTHER BULL WINNING TRADE EPISODES!
Episode 125 – The Bull Trading Strategy
Returns of this trade: The January trade returned about $2,350 or 31.3% of planned capital and the February trade had a profit of about $730 or 9.5% of planned capital. For a combined total 40.8% of our $7,500 planned capital in about 60 days.*
Episode 111 – Bull Trading Strategy
Returns of these trades: The June trade returned about $512, the July trade returned about $2,060 and the August trade it returned about $1,512. For a total of about $4,084 for the 3 trades or 54.4% of our $7,500 planned capital in 90 days.*
Episode 48 – Bull Trading Strategy
Returns of these trades: For the January expiration the trade returned about $2,410 or approximately 8.8%, for February the trade returned about $1,810 or approximately 6.6%, and for March the trade returned about $1,710 or approximately 6.2%.*
Episode 32 – Bull Trading Strategy
Returns of this trade: This trade earned about $1,840 profit or about 7%* of the planned capital in 28 days.
Episode 15 – Bull Trading Strategy
Returns of this trade: This trade earned about $1,700 profit or about a 6% return on our planned capital of $27,500 in approximately 30 days.*
Episode 3 – Bull Trading Strategy
Returns of this trade: This trade earned about $1,700 profit or about a 6% return in about 30 days.*
*The result shown is from real-time, hypothetical trades such as those shown in the Options Trading for Income weekly webinar. Simulated trades are believed to be represented as accurately as possible, however, live results may have been different. The result is shared as an example for educational purposes ONLY.
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