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The Way to Trade: Discover Your Successful Trading Personality by John Piper

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Chapter 17: SOME POINTS OF PRINCIPLE

The Trading Manual (TM), the first book I wrote, suggested a strategy of writing balanced positions (both short puts and short calls) which did not take into account any perceived future directional move. This is a valid strategy but my experience of trading this strategy over many years suggests that there is a better way to do it. This is simply to take directional positions, i.e. either short puts or short calls (not both) or indeed straight futures.

I know that some readers become confused by the expressions “long” and “short,” so I will spend a few lines dealing with this. In the markets a “short” position means to sell the market, a “long” positions means to buy the market. Similarly a “short” options ...

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