Framework Level 1

Framework Level 1

Before any investor or trader can take a step forward, they will need to first map out a plan of action. This plan of action we can the “Trade Framework”. The creation of this systematic approach will allow us to eliminate a large portion of our personal emotions that we will inevitably encounter. Second it will allow us to see where improvement is needed.

So, let first of all map out the framework the we will work from throughout your education.
In the image below you will see part 1 of building the basic framework for trading.

Basic Framework for Trading Figure 1

In the image below, you will see the need to study the function of options before trading.

Option Functions Figure 2

In the image below you will see that every trader will need to decide what their personal trade approach will be for each trade. The Options market has a lot of choices.

We will need to decide if we are placing a trade because we feel the stock might have the potential to move in a single direction.

Or on the other hand we might feel that guessing the direction of any stocks is difficult and may not be a proven method that will stand the test of time.

Personal Trade Approach Figure 3

Exiting a trade can be difficult without have Guidelines in place before ever placing the trade. The two emotion we will face with any trade can be managed with two simple views.

Greed would suggest that a good trade with great profit might have a little more room to grow.

Hope would suggest that the trade might work out if we just give it one more day.

Trade Exit Figure 4

Framework Flow figure 5


Download Intro to Framework Level 1 PDF

Intro to Framework Level 1 – Test of knowledge Quiz