It is! and this is what my friend has just done. And this is how he did it with 3 trade only:
Bought a PUT option 4700 on the DAX for at 7, £10 a point. A day after the Dax lost 3% and the option was 40. 33 points = £330.
Last Friday he opens a short position (£4 a point) on the Dow with 100 points stop loss and 50 points profit target. The Dow almost touched his stop but changed direction and he got the 50 points or £200 profit.
Yesterday again on the Dow he went short with £5 per point and got 120 points or £600 profit.
All together £1030 profit and with the £70 the balance is £1100.1471% profit in 10 days. Amazing but…
I don’t think this is the right way to trade. In fact, I think my friend did all the mistake he could… but he has a lot of luck. The way he trades is more like gambling when you may have a good strike but in the end the Casino most of the time wins.
Mistake number 1:
Trade on all the money in the account. It is ok when you have only £70 in your account to trade on all. But when your account is more than £1000 it is not wise. One bad trade and you are out.
Mistake number 2:
Thinking that only the £70 is his money. He always says I don’t mind losing – it is only £70. What I try to explain to him is that was £70. Now it is £1100 and it belongs to him. He can take it and put it in his bank account.
Mistake number 3:
No strategy. He opens positions according to guts feelings. He follows the market quite long and he has the experience, but he is not using technical analysis to back up his instincts.
Today he opened a new position on the Dow. This time it is £15 a point with 75 stop loss and 100 points profit target. Again this is a mistake because the ratio between potential loss and profit is to low. You should always aim for 2:1 at least.
I do hope for him that it will go well for him but I don’t recommend you to follow this method. Although with 1471% profit some will be tempted.
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