Your Questions About Successful Trading Strategies

Charles asks…

Best book on “trading options” (equities)?

I have a basic understanding and experience of options, but would like to know strategys. I am looking for a book that doesnt just tell you the various spreads, strangles and various put and call variations. I am looking for the details to look for when these various strategies are most likely to be successful. Thanks in advance.

John answers:

Larry McMillan’s “Options As A Strategic Investment” is the most comphrensive resource that I’ve found. It’s about 900 pages long and it’s not a book that you have to read all at once. I refer to it frequently to familarize myself with specifc strategies. I’ve also heard Larry speak at seminar’s and he one of the best option trader’s around. I make most of my income trading options and have learned a lot from the book.

The book is expensive (around $75) so check him out before you buy the book. To get a feel for what he does, you can go to his website: There are also some free newsletter trials on the website.

Laura asks…

In practice, how would a united Palestinian state survive?

We treat Palestinians as a group. In reality, there are two very different kinds of Palestinians. There are Palestinians who live in the West Bank and East Jerusalem, and Palestinians who live in Gaza.

Both hate Israel as the Jewish occupier. But there is a big difference in radicalization.

The Palestinians of the West Bank and East Jerusalem have seen considerable improvements in their lives since the Oslo Accords. They’ve seen freer trade, freer movement, more autonomy and money and development, more international prestige, and a better quality of life. This is all because of one thing – Arafat’s renunciation of tactical violence.

For example, these Palestinians are much less likely to support attacks against Israeli civilians. 25 per cent of them support it, compared to 60 per cent in Gaza.

The international support Palestinians have had since the Oslo Accords is overwhelmingly because of the public relations campaign of Arafat and his successors.

The Palestinians of Gaza are blockaded and impoverished. We can blame this on Israel or the United States or Mubarak, but in reality it’s because they elected and are ruled by a group that refuses to give and take or renounce tactical violence at any cost – Hamas.

The I.M.F. said that the Palestinians have passed the threshold necessary to run a country, developed infrastructure, blah blah – but they said this for the P.L.O. Where is the P.L.O.? The West Bank and East Jerusalem. Who came up with the whole successful state-building strategy? Salam Fayyad. A Fatah man.

September 2011 at the Security Council/General Assembly is almost exclusively organized by the W.B./E.J. Palestinians.

Suppose a Palestinian state is recognized on the 1967 borders – you would in practice have two Palestines, very different in views.

Hamas and Fatah (the P.L.O.) are unable to reconcile to any degree. They fought a civil war, for God’s sake. The solution was a cold peace – Hamas rules in Gaza and the P.L.O. rules in the W.B. There are no Fatah men left in Gaza, and the P.L.O. harshly persecutes Hamas remnants in the W.B. and E.J.

It is two completely different platforms. The Gazan Palestinians support an Islamic fundamentalist platform. The P.L.O. supports a secular, Arab nationalist platform. The P.L.O. is more autocratic and corrupt – but its Palestinians have seen the benefits of its policies.

Hamas is still considered a terrorist group by the U.S. and E.U. Its development of Gaza is massively backward. The Gazan government and people are nowhere near the minimum ‘threshold for running a country’.

The W.B./E.J. also have a much larger Christian population than Gaza. If you’ve noticed, all of the few Palestinian Christian leaders, are either Arab Israelis or W.B./E.J. Palestinians in the P.L.O. The P.L.O. has managed to still have a bit of a Christian presence and appeal, because it has avoided Islamism.

Apart from (a) the huge ideological differences and (b) the huge developmental disparity, there is still the geographical consideration. I can’t think of any country that has survived in two halves. The United Arab Republic (Egypt and Syria) collapsed in under 3 years. East and West Pakistan fought a civil war that killed 3 million people. East Pakistan became Bangladesh.

I’m saying we should recognize the two very different groups of Palestinians on the ground. If ‘Palestine’, whatever this country is, becomes independent, it will almost immediately split into two, if not officially, then at least in practice.
I think you need to read the question to understand it.

John answers:

I should prompt you to read your question again. You have answered it. There can not be any “united palestinian state” because the only thing over which Hamas and Fatah are “united” is that Jews should be killed and driven out of Israel, Judea and Samaria.
Except this, there is nothing that unites them – but there are the numerous irreconciliable contradictions between them which make any unit impossible.
If this is so – and it is so- then why should we lose so much time on the creation of something which all the same will not survive?

Sandy asks…

Option trading question.?

Hello, I understand that first of all we need to know how the future price of the Underlying security is going to be bullish or bearish or neutral…..Then after finding out the trend we have to select the strategies…..I am really having trouble here in really correct trend…..

If you are successful option trader How do you come to conclusion that you are going to bet the price of security is bullish or bearish or neutral?What Kind of analysis you do?Do you use put/call ratio like something as a Indicator for confirming the trend?Please share your ideas How to Jump to conclusion to bet that product’s price will be bullish or bearish or neutral?Please explain to me in simplae and clear way……I do not have trouble in selecting the strategy after find the trend ie, bullish or bearish or neutral……I need some experienced Option trader’s confirmation for the basement of selecting the trend?

John answers:

Elliot Wave theory is one way. There is a thousand different theories out there, but if they really had the answer they wouldn’t be selling you their
secret. That is unless they wanted to move a security or option. Playing the option market is tough, First you have to know that you may lose all your money and accept that before even starting. The Risk/’Reward ratio is great if you have the stomach for it. I look at the stock and get an indication on the direction of the stock. I watch The P.E./ The number of Puts sold, The number of calls and ect. Then and only then do I make my selection. I never go longer that 4 months out, that way if I’m wrong, i can try to average down.
Good Luck

David asks…

What investment strategy do you use and how successful has it been for you?

If you don’t know how to start trading or investing in stocks, you’re not alone. There are so many stocks to choose from, each with their own unique characteristics. You need to know what product or service the company produces, whether the management is trustworthy, and whether the stock is a good deal. Share your investment stories with me.

John answers:

I went for penny stocks, couple of them. Before deciding on which to buy, I’ll look at their fundamentals and some ratios, cash flow, cash balances whether healthy or not, their performance over at least 3 years should be trending northward, the risks that the business takes and how calculated it is. Check who are the directors like for eg… Mediaring whose director has proven past performance so is a can-buy. Never listen to brokers and friends who try to give you the latest “hot-tips” cos these “burn”! Always do your own research and once you are convinced, you’ll be ok.

Richard asks…

Forex market?

Does anyone play the forex market? and what strategies do you have to reading the charts. i can never figure it out. Can someone help me to make a trade based on the current chart situation, and what factors do i need to look for in order to make a successful trade? Thank you in advance.

John answers:

I’m trading forex.
I think all your interesting questions are disclosed in those books:
Technical Analysis by Jack D. Schwager;

Comprehensive Course on The Wave Principle by A.J. Frost and Robert Prechter;

Candlestick Charting Explained- Timeless Techniques for Trading Stocks and Futures by Gregory L. Morris;

Trading Chaos – Applying Expert Techniques to Maximize Your Profit by Bill Williams;
New Trading Dimensions by Bill Williams

Read it and you discover how useful those are. Than you be able to create your own trading technique accordingly to your available funds, time and character

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