Tricks of the successful trade : entry, exit, price, position size, risk , upside and strategies

[pandeyathotmail]

Cross posted

@marcus335

You think owning a stock is speculating, and trading options based on unusual activity is fine?

The quickest way is look at top options activity and compare it to the average for that option. Some will pop with at least 10x normal activity.

Did I say owning a stock is a speculation?

Anything (even the safest asset) can be speculation or an investment depending upon the understanding of two things:

1. Safety of Principal
2. Rewards/Risk Ratio

Speculating or investment is not the character of an asset but of the thinking that goes behind the money paid in to acquire that asset.

For example, if 9/10 startups fail, can investing in a startup be a speculation? But, it can also be rewarding. Can it be investing then?

What about the options? What about the penny stocks? What about the junk bonds?

Position sizing is important in situations like these. The amount and possibility of risk (loss) vs the amount and possibility of the gain.