Questions Regarding the Blueprint and RadioActiveTrading Methodology

Question: I have watched with interest all of your you tube stuff, read the sketch, done some independent research. I have been searching for a way to generate reasonable income for the day comes when I have to live on my retirement account. I have seen it all, read all the decent books (McMillan etc.) and tried various techniques using stocks and options with what I call my “learning account”.

Have had some pretty bad experiences like yourself due to following the advice of others, so I am now convinced I have to go it alone, with my own education and experience. Even after doing this for about 8 years now, I got burned by something I should have known about, but never saw it coming, a rights subscription on short stock that went against me and nearly wiped me out. So, here I am again, searching and testing but still in the game. Sure, I’d like to check out your “blueprint” after all, I have blown a lot more on various other systems… But perhaps you can convince me to spend the $300 by honestly answering the following:

1.) Most of your examples and income method show are based on rising stocks or ones that seem to follow a up then down then up pattern. As we all know, hind sight is 20:20. Does some of your income methods deal with putting on the trade and having the stock tank nearly immediately. What I mean by “deal with” is either a.) get out of the position with a small or no loss or even better, a profit.

2.) Can the system truly be managed by someone who does not ( or wants to be) tied to monitoring the market all day, each day. I travel a lot and I can’t tell you how many times i missed opportunities to adjust positions for profit that turned in losers cause I didn’t “catch it”.

3.) How timing dependent are these income methods? For example, if the underlying moves favorably within a few weeks, you can take advantage of that disproportionate long ITM put delta on the upside, but that will hurt you on the downside and even worse either way if nothing happens for say a couple of months. Do you have a “bail out” time-frame for after you put on the position.

4.) I am not a fan of individual stocks for the reasons you cite (earnings surprises, downgrades, gaps etc.) so I like to trade ETF’s or Indices. Can you trade these successfully with your systems at similar expected profit opportunities as stocks, or do should you expect diminished returns with ETF’s etc. I know the married put concept contains risks associated with the unpleasant things stocks can do, but do you just have to live with that using RPM because volatility (esp. upside) is a requirement to move the stocks vs. ETFS.

5.) Do you have an income method for sideways stock movement where diagonal spreads are usually favored?

SO… MY advice is to get good returns and roll ‘em first by protecting your downside and leaving your upside open… THEN look at laddering bonds or other income producing instrument for “a reliable stream of income.”

Okay, on to the questions you asked…

1) Yes, the initial setup is intended to FORCE money management principles while leaving the upside open. Looking at your “pretty bad experiences”… you must have had a few good ones too or would be out of the game by now. Now consider this question: If looking back, you were able to keep the wins, but all your losses were single digit percents instead of what they really were, would your experience be a better one? Of course it would… and that’s where RT begins. The so called “Income Methods” are really adjustments that may turn a losing trade into a winning one, or lower the loss, or even lock in a gain and making your position “bulletproof”, meaning that it can continue to gain but cannot lose.

2) Yup. I don’t watch the market all day, why should my pupils? This is the POLAR OPPOSITE of day trading. If there are opportunities you are looking for, e.g. you are waiting for a price move that will allow you to bulletproof a position… you might set a GTC limit order for when that condition manifests, or even use one of these services that ping your email, cell phone, or blackberry.

3) Hmm. Not sure I understand the question. I’ve had an ESRX position in place for a couple of months, which is now doing what I wanted it to do. Of course, my put option has me protected at the desired level until 2011. Not a lot of time decay or delta entering into the picture just yet. That’s why I choose further out puts when available: to give my position all kinds of breathing room.

4) I’m in ETF’s all the time. I’m kind of flattered by the fact that I do okay with them because they are so heavily traded and the options are most efficient. Right now my QQQQ position is bulletproof; it CAN continue to go up… but CANNOT fail to return less than 5.5% of my invested capital, on top of dividends. DIA was recently closed at a profit plus dividends as well. Yup, I like ETFs.

5) Yes! Income Method #8 (the RadioActive CONDOR) is designed for sideways stock movement… but is TOLERANT if your stock goes up. That means you still have unlimited upside but limited downside if your stock breaks out of the ideal trading range for the condor. If it breaks down, your loss is limited and predefined… if it goes sideways you realize the total premium and that reduces your cost basis… it the price breaks to the upside you still have unlimited potential. I LOVE it.

I Hope I’ve given you a thorough and complete answer. Hey, consider picking up a copy of The Blueprint and telling a friend about it too. You can expect great things, plus support after the purchase. Bye for now… gotta check on a stock that may be ripe for “bulletproofing”.