‘Stalwart Strategy’ Outpaces ‘Buy The Dip’


Simpler Trading Team

Aug 06th 2021  .  3 min read

Where is the opportunity in the continuously dip-and-rip volatility of this market?.

Trading for profit isn’t as easy as “buy the dip” and check the bank account. Opportunities aren’t always easily revealed on the computer screen and trades may not be simple to execute.

Having a “stalwart strategy” – reliable and hardworking – gives traders a focused target for expanding the opportunity to improve to the next level of trading. This helps develop more consistent trade setups that can outpace proponents of dip buying.

This week’s “Friday Feature” provides insight into such a stalwart strategy among Simpler’s traders. This at a time when market volatility and uncertainty are at an all-time fervor.

At Simpler Trading, there is nothing more valuable than supporting our people – even in volatile markets. 

This week’s highlight of the newsletter features training designed to reveal serious money in the market… using a popular tool.

Anytime you’re chatting in the trading room with our team, you’ll regularly hear about the “butterfly” or “butterfly spread.” This is a fitting tool in a choppy market that hasn’t given way to strong directional momentum.

Butterfly setups are intended to reduce risk and minimize loss while targeting profit in a set range. In a baseball analogy, the goal is a profitable win – a single or a double – but not a homerun.

What makes this setup attractive in trading options is that traders applying butterflies with experience and skill can develop consistent cash flow.

Butterflies target options to finish at expiration near the starting price and are not a “big win” play. Risk is limited along with profit potential.

This combination of minimized risk and steady profit potential is a welcome prospect in this  market with choppy direction.

Using butterflies strategically, traders can develop a style and plan that creates more consistent success on a regular basis. This is at the heart of “Bulletproof Butterflies,” a course from Simpler Trading.

“Bulletproof Butterflies” is the foundational strategy of one of our senior traders who has been trading for 30 years. The goal is to set the trade, let it work, and then come back a short time later and take the gains.

When you’re searching for certainty in an uncertain market, consider butterflies to take your trading to a new level. The strategy may seem more complicated, but when there is a veteran trader with proven success at the helm the possibilities can open up even in a volatile market.

Imagine how one trade a week consistently adding hundreds of dollars to a trading account would affect the annual bottom line.

We Saw: New job numbers explode, market gets choppy –

  • Gas prices rise further as travelers hit roads
  • Robinhood struggling for a stock rally
  • More companies postponing employees’ return to offices

We’re Watching: Today is the next day in “one more day” market –

  • Price strength, stability in bonds
  • Mixed losses, rallies in “pandemic” stocks
  • Mixed setups in bonds, U.S. dollar, gold, wild stocks