Trade Options with a 90% Probability of Success by Kerry W. Given ...

It is common to see web site banners or other advertisements similar to the title of this article, touting the benefits of options trades with probabilities of success of 85-90%. Technically, these trades indeed have a high probability of success, i.e., if you placed a trade with the same parameters every month of the year, you should see about 10 or 11 trades per year be successful and one or two be losers. And the longer you traded in this way, the more likely your results would conform to these averages.

The underlying probability calculation assumes that the stock price movements are random events, like throwing dice. Of course, stock price movements are not purely random, but are affected by news, rumors, crowd psychology and many more factors. But it isn’t a bad approximation for the reality, especially when averaged over many stocks and over long periods of time.

The essence of the problem derives from the old financial adage, there’s no free lunch. If you were to establish trades with these probabilities, the returns will be rather small, of the order of 7% to 10%. But the losses would be huge, of the order of 90% to 100%. The bottom line is that the one or two losses each year would be large enough to wipe out all of the gains for the year. Thus, there is only a small probability of a losing trade, but when it happens, it will be a devastating loss.

Some traders will readily acknowledge that these high probability trades don’t make sense, and will sell the idea of so called “low risk” trades, where the potential loss is small, hence the label of low risk. These trades are simply the mirror image of the high probability trade. The low risk trade is characterized by a huge potential gain, of the order of 200% or more, but there is a very small probability of that successful outcome. In this case, one would lose a small amount on the trade 10 or 11 months out of the year and then have 1 or 2 large gains. The problem is that the large gains would not compensate for the large number of small losses.

In either case, the outcome is the same, a small net loss, especially after commissions and other costs of trading. So is options trading inherently a losing game? No, not necessarily, there are many examples of successful, long term options traders. They succeed by paying attention to two critical factors: 1) keeping one’s ratio of winning trades to losing trades as high as possible, and 2) minimizing the losses on the inevitable losing trades. But those topics require a much more extensive treatment than can be done in a short article.

One’s choice of either the high probability trade or the low risk trade is not a financial issue – neither is inherently superior. Neither trade will be successful long term without other considerations. One’s choice of the high probability or the low risk trade is primarily a matter of matching one’s trading style and risk tolerance with the right trade.

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Phases of the hCG Diet by Jeff Denzel - ArticleCity.com - Free ...

The human chorionic gonadotropin (hCG) Diet contains three separate phases. These phases differ only slightly depending on which of the two HCG weight loss programs you are following. These two programs are Dr. Simeons’ “Pounds and Inches” program and Kevin Trudeau’s “The weight loss Cure” program. Phase 1 of Dr. Simeons’ program requires the individual to binge eat for two days prior to starting the hCG Diet. The purpose of this two day binge is to add fat to the storage areas in the individual’s body so that the hCG can perform properly and also to help prevent hunger and headaches that are sometimes associated with the program. Typically, the individual is either given hCG drops or injections two days prior to starting the Diet. The act of binge eating for those two days helps the hCG to enter the system. Two days after receiving the hCG, the individual will begin to follow a 500 calorie Diet in Phase 2.

Phase 1 of Kevin Trudeau’s Diet with hCG requires the individual to go through a thirty day period of cleansing before starting the two day binge eating period. The cleansing process is designed to remove impurities and toxins from the body. It is recommended that the individuals receiving cleansing treatments only eat organic foods to help promote the effects of the cleansing. Some cleansing processes included in Trudeau’s hCG program are colonics, heavy metal cleanses, candida cleanses, liver cleanses, and parasitic cleanses. There is a list of products that the individual should avoid during the entire process available within the article “The weight loss Cure.” Some individuals have experienced results when they have combined elements from both versions of the hCG Dieting program.

For those who are following Dr. Simeons’ program, the second phase involves starting the actual Diet with the use of liquid hCG. During this phase, individuals eat only those foods that have been approved for use in the hCG Diet. A list of the approved foods can be found in the “Pounds and Inches” manuscript and also on various websites. This phase lasts between twenty-six to forty days depending on how much weight the individual has lost and how long the individual wants to Diet. The individual will continue taking hCG for most of this phase. Three days prior to ending the 500 calorie Diet, the individual will stop taking hCG. Trudeau’s Phase 2 is similar to Dr. Simeons’ Phase 1.

The third phase of Dr. Simeons’ hCG Dieting program is intended to allow the hypothalamus to reset. Dieters go into a ‘maintenance’ phase where they can eat what they want while watching their weight. The goal is to stay within two pounds of their new weight. Phase 3 of Trudeau’s version is to actually start the hCG Diet using the list of approved foods from Dr. Simeons’ manuscript. These foods should be organic and hormone free. This phase also requires the individual to use hCG Dieting supplements.

My Weight Loss Transformation: 40 Pounds in 4 months!!!