What I’ve learned from the consistency of $2K SAJ

Good morning,

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I’ve been reflecting on how I could bring that success to Lightning Alerts.

Everything in $2K SAJ is well thought out and consistent. From the starting balance, to the type of trade (bull put spread) to the 5 diversification benchmarks and very clear guidelines. It’s all well thought out and I think if Mark Douglas were alive, he’d say we have a true edge in the market with this service. I’m proud of $2K SAJ and it brings me a lot of peace.

Journey A: $11,215 +461% or +$9,215

Status: TSLA bear call

Allocation: benchmark 3 or 25%

Journey B: $2,866 +43% or +$866

Status: Cash

Allocation: Benchmark 1 or 100%

We just started Journey B and it’s already up to $2,866. All trades alerted before entry and exit. If you haven’t subscribed, I strongly recommend going about your trading in this fashion. Click here to subscribe.

Benchmarks:

1. $2K-$5K 100% allocation to get the account up in value fast

2. $5K-$10K 50% allocation (2 $2.5K-$5K trades open at a time)

3. $10K-$20K 25% allocation (4 $2.5K-$5K trades open at a time)

4. $20K-$100K 15% allocation (7 $3K-$15K trades open at a time)

5. $100K+ is 10% allocation (10 $10K trades open at a time)

Guidelines:

• Tickers: best co’s in world, earnings winners, strong guidance

• Order type: bull put (neutral to bullish i.e. good co’s tend to go up)

• Target entry: 1-2 strikes below price and defined by technical analysis (sell below big support to boost odds)

• Entry (credit) goal: 30% of the spread width i.e. $10 wide = $3, $5 wide = $1.50

• Exit (debit) goal: 30% if achieved on day 1-2, otherwise 50% of the credit

• Stop loss strategy: defined by sold strike (conservative) or bought strike (liberal)

• Allocation: starts at 100% and works through 5 benchmarks to diversify risk as the account grows

• Expiry: 2-3 weeks from expiration (conservative) or 5-7 days from expiration (fastest rate of decay)

I’m not trashing Lightning Alerts, but if Mark Douglas was alive, I think it’d be hard for me to explain to him what our edge is. My trading here is all over the place and it’s stressing me out.

Don’t get me wrong, I teach a lot of great stuff in Lightning Alerts. That $400,000 run I had back in March was exhilarating. But giving it back, INFURIATING! Right now Lightning Alerts just isn’t organized and defined like $2K SAJ. I suspect that’s why everyone is raving about Journey.

I think Journey is awesome because I’ve simplified everything by being crystal clear on what you can expect. If I’m being honest, it helps me just as much as subscribers, by keeping the train on the tracks.

So let’s apply a similar structure to Lightning Alerts and see where it takes us. Since this is the start of a small-cap bull market, now’s a great time to get focused.

Here’s a framework that I’d like to get put in place for Lightning Alerts.

I’m going to go back to trading a $100,000 balance and ONLY small-caps. I believe I perform best when I start with a set amount of money and have a goal to grow it. I love buying options, but I feel like I’m literally a jack of all trades in Lightning Alerts and master of none. I prefer to master one thing and think I take on too much in this service, often at the detriment to my performance and mental health.

I will keep the same journal as I do in SAJ so a Google sheet. By slowing down my trading it should be manageable.

Guidelines:

• 30% allocation up to $500,000

• Rebalance at the start of each year to $100,000

• 2.5% draw Friday’s at the close

• Small-caps so under $2 billion market capitalization

• Swing trades so 1-4 holds

• Profit goal is 5-20%

• If a profit is made on day one of the trade it should be taken

• Stop loss is defined by the chart pattern (see cheat sheet)

• No more being chained to the computer

11-years into my full time trading career I’m starting to truly see the benefit of doing less, but doing it well. I’m a fierce competitor and want to be great at everything, but am coming to find that in trading, that can be very destructive. Sometimes when we step back, we actually move forward. If you like small-cap swing trading, now’s a great time to join Lightning Alerts.

Wish me luck,

Jason

P.s. I’ll expand on these guidelines as we go. Journal will be up Tuesday.