Options 101

[NoMoWork]

Tom, I enjoyed the RR trade discussion in the Options 101 class, but would really like to see how you would handle a RR that goes against you. I'm not very good at predicting market direction

 

[status1]

Of course the simple answer is to flip the trade but by then you probably locked in a loss
As you said the key to this is market direction
Scott is pretty good at predicting the market direction but even if not he has other trades around it that will make money in the opposite direction to kind of hedge off the RR losses before flipping the trade or adjusting it
Perhaps we will get more answers in the next class about advanced RR

 

[Marcas]

Yep the key is market direction. You don't put RR willy-nilly. This is not a trade to be put on every month on and off. You use your market reading as a guide, if you do you have a chance to learn on mistakes. I also look at existing positions (or planned ones) to see how RR cooperates with them.
Flipping the trade is not the same as locking in loss - unless you take trade off completely. Locking in loss happens mostly in trader's mind.