WHEN THE STOCK MARKET blasts higher, nobody wants the fun to end. And the higher it goes, the more exhilarating it becomes. While some pundits will always declare an end is near or here, changing course is a topic of conversation many analysts would rather avoid. But ultimately, no matter how smart we think we are, we don't get to choose what happens next. Fate does.
Whether you're trading stocks, options, futures, or forex, or which direction you choose, your priority is to manage risks. What matters is you apply strategies that bring you the highest chance of success in any condition --up, down, or sideways.
As an option trader, you may have many strategies to choose from. But how do you know which one to use when you're not sure if the markets are too toppy or are ready to bounce back after a slide? In our feature article "Toppy Markets and Heavy Bottoms" on page 14 we look at three strategies you could use that have some upside potential but limit your risks.
Market conditions change and you need new trading ideas. Where do you get them from? The article "Three Steps from Idea to Trade" on page 18 points you to an approach you could incorporate into your daily trading routine. It'll help increase your market awareness, a necessity if you wish to elevate your trader status. A saavy trader isn't going to spoil the party.