Actor Harrison Ford had skills as a carpenter and handyman prior to his huge success in film, and it’s a good thing. What would have happened had his acting skills bombed out? Fortunately, we can surmise he’d have something to fall back on to help him through life.
Wannabe actors that put their entire focus into a single dream while ignoring the development of other skills can easily put themselves on the fast-track to failure.
Well, it’s essentially not wise to become a one-trick pony – there are simply too many obstacles that can derail the future.
The same is true in trading – it’s not wise to focus only on a single strategy.
One strategy may be the focus initially to get you started, but, over time, adding additional trading strategies and techniques will benefit you. After all, let’s be honest, no single trading strategy works every time and under all circumstances.
The logic of having a basket of trading strategies and skills has benefits similar to conglomeration companies.
Have a diversification in companies is wise because if one portion of the conglomeration struggles, there are others that can contribute to the overall success.
The same is true for a conglomeration of trading strategies – when one strategy is temporarily struggling, others can be utilized to pick up the slack.
Let’s talk about some of the trading strategies available for you to develop a skill in, which can lead to a conglomeration of strategies, which in turn can bolster your overall trading success.
Benefits of Corporate and Trading Strategy Conglomerations
First, let’s start with what it means to conglomerate.
A corporate conglomeration occurs when one company buys another company (or more) as a means of seeking diversification. You may not own a variety of businesses, but you can develop a conglomeration of trading strategies as a means of diversifying a trading account.
You’ll also find the benefits found in companies that merge together are similar to the benefits of having multiple trading strategies.
Just as conglomerate companies have the benefit of increased investment opportunities, learning multiple trading strategies will increase your own trading opportunities.
Also, companies reduce risk when they belong to conglomerates due to diversification. Similarly, when market conditions change, diversified trading strategies can reduce risk since some strategies are more appropriate than others as market trends and volatility change.
Let’s talk about option strategies that can form your conglomeration.
Now, there too many option combinations to list here, but let me give you an idea of just some of the different types of strategies you might learn about to build your trading strategies conglomeration.
- Single Long Calls
- Single Short Calls
- Straddle Option Strategy
- Bullish Vertical
- Bearish Vertical
- 1-3-2 Butterfly Trading Strategy
The list of opportunities seems limitless, but learning some or all of the trading strategies listed above can allow you to participate with trades in any market environment.
There’s no need to apply all of them at the same time, because the purpose of having a conglomeration of trading strategies is to allow you to apply the appropriate trading strategy to the appropriate conditions.
It’s not always easy to know what the market and volatility conditions are, so that’s where my proprietary software comes in handy.
The Power of My Proprietary Software
Over the years, I had a NASA-grade team of software engineers build me a proprietary software system which enables me to apply rules-based trading guidelines to a variety of market and other conditions – and I’m passing the results of my software on to my readers.
I want to apply the proper option trading strategy based on the situation, as I’m sure you are. Here are 5 areas where different trading strategies can be applied:
- Trend
- Statistical Probability
- Seasonality
- Volatility
- Contrarian
You’ll find there will be times when conditions favor being an option buyer whereas other circumstances may favor selling options.
And, after you’ve been around options long enough, you’ll know there are a wide variety of option combination trades that might be applied based on conditions.
My software is used to identify trades based on different market, trend and volatility conditions.
At times my software searches will find trends where buying calls or puts might be appropriate. Other searches may point to statistical probability opportunities, which informs us of the odds a pattern might repeat itself.
Some trading opportunities present themselves based on the time of year, or seasonal patterns. Other times, depending on market conditions and events, volatility patterns may be the forefront reason for taking on a specific trading strategy.
Finally, my software is capable of identifying what the “herd” is doing, wherein we’re able to utilize a contrarian approach as a means of strategy diversification.
You won’t find me worrying too much about headline news and the emotions associated with those headlines. The reason: I’ve developed a conglomeration of trading strategies to apply to the various market and other conditions, which are changing regularly.
I think it’s simply more important to take the stoic approach to trading. In doing so, my readers can apply the appropriate trading strategy to the present conditions.
I’m sure you’re fully aware that conditions change, and given that circumstances vary, it’s important to apply the best strategy to those circumstances.
It’s a great reason to create a conglomeration of trading strategies and reap the benefits.
Be sure to look below at my conglomeration of trading publications.
Until next time,
Tom Gentile
America’s #1 Pattern Trader
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