When I first started trading over 14 years ago, I experimented with hundreds of strategies and different permutations of each. Trading is an incredibly individual endeavor with unique inclinations, natural gifts, approaches, etc. For myself, I learned early on that my skill lies not in correctly assuming direction but thinking through portfolio and trade management. The most successful strategy for myself to date is the naked short put. I started with under $5K at 16 and have traded and saved to mid-7 figures at 30. I’m not that smart and am average by most accounts. I came from a single mom that struggled to make ends meet and lived in debt until I was able to make my way and help. I was lucky to find a mentor that was willing to help me on my path and I’ve been doing what I can to pay forward the time he spent with me. My success is a direct reflection of his effort and subsequent planning.
I regularly trade different permutations of the strategy: naked short puts and cash secured put to covered strangle being the most common. The reason naked short puts rose to the top of the list was the ability to access leverage (especially with portfolio margin). I find that deploying leverage to be essential in outpacing the market. I have slowed down the amount of leverage I take on because my goals have shifted over time. However, when starting with little capital, if the goal is to truly accelerate returns and develop an account before you’re 60+, it’s critical to save and learn. Once you are confident in your ability to deploy, then it comes down to taking calculated risks. Risk and reward are directly correlated.
I share this because I know many are looking to find their way. It’s possible and it doesn’t need to be overly complicated. Mastery of the basics goes a long way. Keep on the path!
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.