The 10 Secrets of Trading






More from the Editor of Cabot Options Trader

 

Stock Market Analysis Video

 

In Case You Missed It

 

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Unlock the Secrets of Options Trading

 

Announcing Cabot Options Trader, our newest publication,
which will help you leverage your investments. Get top options trading picks
each week that can help you make money in any market. The first issue will be
released this Monday, June 7–don’t miss it! Click below to order now.

 

http://www.cabot.net/info/cot/cotki04.aspx?source=wc01

 

 

We recently introduced you to our newest newsletter,
Cabot Options Trader, and last week, I introduced you to the editor, Rick
Pendergraft. I recently interviewed Rick so you can get to know him, just like
you do all the Cabot editors. Enjoy!

 

(You can read last week’s issue here: http://www.cabot.net/Issues/CWA/Archives/2010/05/Options-Trader-Editor.aspx)

 

Question: What can readers expect in Cabot Options
Trader?

 

Answer: With the test issues we have put together over
the last few months, I have come to appreciate the idea of the Cabot Options
Trader even more than I first anticipated.  As we continued developing the concept, I realized it was
more than just option recommendations. 
I think what we have put together is more comprehensive than any other
options newsletter I am aware of.

 

Each week, readers will get a summary of the previous
week and they will get my take on the overall condition of the market.  I may make a recommendation that
investors lower their equity allocation if I think the overall market is headed
down or I may suggest they increase their equity exposure if the market looks
like it is due for a rally.  We
also include a proprietary market indicator that I developed over the last
couple of years called the Cabot Options Trader Barometer.  The readings will move back and forth
into positive and negative territory, but what we are looking for is extreme
levels in the readings.  In 2009,
there were three times that the indicator went over 75- March 4, July 10 and
November 2.  If you look at a chart
of the S&P and look at what happened following these extreme readings, I
think you will see the value of the Barometer.

 

Another item in the newsletter each week is an economic
calendar.  My personal opinion is
that you have to be aware of when important economic reports are coming out and
you also need to know what the market expects since that is what the reports
will be to be measured against.  I
will also give my opinion on certain reports if there is something that doesn’t
make sense.

 

Finally, readers will get one or two put or call option
recommendations each week.  These
recommendations come from my proprietary systems that I mentioned earlier.  I look for stocks that make my bullish
or bearish list and then select ones that have performed the best after
previous readings.  Between the
recommendations and the barometer, subscribers should get their money’s worth.

 

Question: Who is best suited for Cabot Options Trader?

 

Answer: With the way the newsletter is laid out and the
instructions that we give, I think any investor can use the Cabot Options
Trader.  As I mentioned earlier, I
have been trading options for over 20 years and I try to explain things in very
easy to understand language.  A
very experienced trader will benefit most from the recommendations and the
barometer.  A beginning trader will
benefit by getting an education on the economy and the market and of course the
recommendations and the barometer as well.

 

One thing we have done for subscribers is develop a
special report on options that will teach the basics to beginning option
traders.  We have also developed a
report on how to make the most of your subscription.  We want subscribers to understand what they are getting each
week and how to use the information to protect and grow their portfolios.

 

Question: What are your top investing rules?

 

Answer: You’re giving me a layup here.  I’ve actually made a list of trading
rules that I try to live by and I call them “10 Secrets of
Trading.”  Here they are:

 

1) Stick to your guns

2) Be Diligent, but Not Rigid

3) Trade Both Sides of the Market

4) Avoid Personal Attachments

5) Keep it Simple

6) Do Your Homework

7) Trade What You SEE

8) Breathe In, Breathe Out, Move On

9) View Each Trade Independently

10)  Don’t
Follow the Crowd

 

Question: What is your favorite investment book?

 

Answer: This is a much tougher question than the previous
one.  I have so many books that I
like, but I would have to say my three favorites are “Reminiscences of a
Stock Operator,” the original “Market Wizards and Sun Tzu: The Art of
War for Traders.”  I am sure
you have heard those first two on numerous occasions, the “Art of War for
Traders” is probably a little more unique.  I have always been a fan of Eastern philosophies and have
several versions of the original “Art of War,” but when I saw Dean
Lundell’s version for traders I had to have it.

 

One book that I have to say that isn’t about investing
that I love is Bruce Lee’s “The Tao of Jeet Kune Do.”  While the book is about martial arts, I
have found there are some very sound principles that can be applied to trading
as well.  I actually have
approximately 30 pages of notes that I wrote about the book and how the lessons
can be applied to trading.  So who
knows, one day you may ask a trader/investor for their favorite book and they
may answer, “The Tao of Jeet Kune Do for Traders by Rick
Pendergraft.”

 

Question: Any final words?

 

Answer: I would just like to say that I am happy to be a
part of the Cabot family and I look forward to working with subscribers on
helping them protect and grow their money.  Hopefully they will learn to read the market better, to
become better options traders and most importantly make money from my
recommendations. 

 

I hope you enjoyed getting to “meet” Rick!

 

If you want to learn more about how Cabot Options Trader
can help you profit in any market, please click below.

 

http://www.cabot.net/info/cot/cotki04.aspx?source=wc01

 

 

And now for today’s Stock Market Analysis Video with
Cabot Market Letter and Cabot Top Ten Report Editor Michael Cintolo.

 

Mike says that the market is a mixed bag right now: The
indexes are down, but some leading stocks are doing very well. The market had a
15% correction from top to bottom, but many growth stocks resisted the damage.

 

So Mike is advising you to do a little buying IF you
raised cash a month ago. However, if you’re still fully invested, you should
probably look to sell some of your stocks. Mike recommends having a Watch List
of stocks that have held up well and select from it when you do any buying.

 

http://www.cabot.net/Videos/Stock-Market-Analysis-Video/2010/CWR-060410.aspx

 

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Timing is Everything

 

From the bear market bottom in 2003 to the bear market
bottom in March 2009, subscribers to Cabot Market Letter made a stunning 94%.
Compare that to the S&P, which LOST 18% over the same period!

 

If you’re a Cabot Market Letter subscriber, this will not
be surprising. You know how Michael Cintolo helps readers conserve cash when
the market is unsupportive and to invest aggressively when the market trend is
up. But if you’re not a subscriber yet, you owe it to yourself to take a look
at the Cabot Market Letter.

 

http://www.cabot.net/info/cml/cmlkb02.aspx?source=wc01

 

 

In case you didn’t get a chance to read all the issues of
Cabot Wealth Advisory this week and want to catch up on any investing and stock
tips you might have missed, I have links below to each issue.

 

Cabot Wealth Advisory 6/1/10 – Welcome to the Wireless
Future

 

On Monday, Chloe Lutts wrote about the dramatic shift
away from landline phones and toward smart phones. As these devices become ever
more popular, they are affecting many aspects of society, like poll results.
Chloe also discussed a stock that could benefit from the growing smart phone
movement. Featured stock: LG Display (LPL).

 

http://www.cabot.net/Issues/CWA/Archives/2010/06/Wireless-Future.aspx

 

 

Cabot Wealth Advisory 6/3/10 – When Should You Average
Down?

 

On Thursday, Timothy Lutts discussed why you shouldn’t
average down in growth stocks, but why it’s perfectly OK to do it when
investing in value stocks. Tim discussed his views on the current market
situation and a leading stock, that’s holding up despite the correction.
Featured stocks: Netflix (NFLX), Archer Daniels Midland (ADM), Research in
Motion (RIMM) and Akamai (AKAM).

 

http://www.cabot.net/Issues/CWA/Archives/2010/06/Averaging-Down.aspx

 

 

Until next time,

 

Elyse Andrews

Editor of Cabot Wealth Advisory

 

P.S. Don’t miss the very first issue of Cabot Options
Traders, which will be released this Monday, June 7. Get started with us right
from the beginning with our Charter Subscription rate!

 

http://www.cabot.net/info/cot/cotki04.aspx?source=wc01

 

 

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