A:  The 1% Rule is Point #4 in the The Market Guys’ Five Points for Trading Success.  Specifically, refer to Chapter 12 which deals with applying the 1% Rule to your risk management plan.

Q:  With The Options Oracle, will it be suitable for a trader that only have level 2 option level approved on his or her account?

A:  With an E*Trade Level 2 account, you will be able to execute some of the trades, but it is recommended that you apply for Level 3 for full participation.

Q:  Is your radio show available online?

A:  You bet!  Just click on the Podcast tab above!

Q:  What’s wrong with taking a bit more risk by allocating more than 20 percent to stocks?

A:  We suggest allocating no more than about 20% of your portfolio to active trading.  You may allocate more than 20% to stocks overall.  There are a number of factors that will affect your overall portfolio allocation including risk tolerance, goals, how long before you need the money and current income.  Remember the point we made in the webinar:  every reward comes with its own attendant risks.  Your responsibility is to manage the risks as best as possible.

Q:  If you’re only trading 20% of your money, where do you have the other 80%?

A:  That will be unique for each individual but it may include index funds, real estate (both direct and securitized, such as REITs), cash or cash equivalents, fixed income and commodities or precious metals.  You should consult a financial planner to assist you in your overall allocation for your specific needs.