Hi Trader

Welcome to your second issue of “The Genie Journal”.

In this issue we cover the topic:

“But What if I Lose on My First Trade? “

If this happens to you, and let’s face it, it is quite possible, what do you do?

Well, we would never tell you what to do with your money. But we can however share with you what we do when we lose.

When we have a losing trade, we go back to the Genie Rules and almost always there is something there we missed or did wrong.

Other times, it is just the market and there really is nothing we can do.

Losing is part of trading. And you must learn to accept it as just an aspect of the game. Because trading is just probabilities.

Like us, you will lose. No question about it.

But what matters is that when you win you win more than when you lose.

The proportion of wins is not what is important. It is the size of your wins compared to your losses.

However, if we lose three trades in a row we stop and take a break from trading for a few days.

Some common mistakes that you might be making if you have a losing trade are listed below.

Avoid the 12 Most Common Mistakes!

You can avoid the most common option trading mistakes if you follow these guidelines: 1. don’t limit your strategy to calls - buy puts also and overcome the bullish bias 2. correctly determine the trend - up for calls, down for puts; sideways for covered calls 3. buy enough time - at least 4 to 6 weeks 4. exit with 2 weeks to expiration 5. avoid OTM options 6. don’t underestimate the effect of volatility 7. don’t over commit your funds - you can lose 100%, so limit your exposure 8. don’t put all your eggs in one basket - diversify over several stocks and use both calls and puts 9. don’t trade without first determining a target profit and exit point 10. never try and strike it rich from one trade 11. don’t use market orders and don’t trade at opening or closing time 12. consider the next expiration month if you can’t find a suitable trade in the current month.

It is wise to remember the following issues when trading options.

1. they have their own risk/reward 2. time depleting asset 3. higher leverage 4. less liquidity 5. can have wide bid/ask spread 6. slippage in fast markets 7. not all brokers deal with them 8. higher brokerage

But on the upside here some reasons why we still prefer to trade options.

Options Benefits 1. they are cheap to buy 2. flexibility - can trade both up and down trends 3. versatile strategies 4. limited risk - can’t lose more than you have put in 5. leverage 6. can use them to hedge 7. limits number of stocks to review 8. can generate good cashflow 9. puts have less risk than short selling.

With covered calls there are a couple of particular problems to avoid: o don’t buy small cap stocks - they can suddenly drop in value o don’t become overextended on margin o if the stock price drops beyond your stop loss, exit your position and sell the stock.

We follow these rules and it helps cut our losing trades.

By the way, have you checked out the Genie Insiders Club yet?

If not, go here right now: www.stockmarketgenie.com/insiders While you still have a chance to get in for the special introductory rate.

Remember, for less than the cost of a muffin and a coffeee you can get one-on-one support plus extra tips and tricks. You also get to see inside our trading room. Learn what and how we trade.

That’s all for this issue, we look forward to talking to you again soon.

Until then take care and trade well.

Regards David Chandler www.StockMarketGenie.com/course support@stockmarketgenie.com

PS I forgot to remind you that the Genie Insiders Club also gives you feedback on your own trades. So you can improve your trading skill.

So, check it out here: www.stockmarketgenie.com/insiders

Remember, we are not providing you with financial advice. We are simply sharing with you what has and hasn’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Regards

David Chandler StockMarket Genie StockMarket Genie 43 May Road Torbay AUSTRALIA 6330