The Art Of Learning Any New Investment Strategy, Concept Or System

new investment strategy
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Six months after having our baby girl my wife is running her first half-marathon.

It's been a long time goal of hers and what better way to get back in shape after a baby than train for a half-marathon. Like she needed it anyway, she's way more athletic than I am and played collegiate volleyball.

But she's been super smart about starting. . .

The first weekend she didn't go out and run 13.1 miles. She did 2 miles instead.

Then she took a break for a couple days and went back out and did 2.5 miles. Each time is slowing working up to 13.1 and increasing her distance.

It's no wonder that this program she's using to train will help get her in shape for the big race. It uses the same principles that we can all apply in our pursuit of knowledge in any area (namely options trading success for our purposes).

Why You Can't Run A Marathon Tomorrow!

Like many investors (both new and experienced) we try to wake up one day and go run a marathon.

We spend hours trying to consume as much information as humanly possible in one full swoop in hopes that at the end of our data-binge we have everything we need.

But come on. . . We know it won't happen like that. We do it anyway.

Whether it's tutorials on options trading, finance, second languages, crafting, whatever. We look for the quick fix to all our problems.

Intuitively we know this is wrong but how do we go about creating a system to learn in stages?

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The "1 Day Seminars" Are Worthless To You

Let's first consider the most widely used program to learn in the world of investing and options trading.

The "1 Day Seminar" is a great, yet horribly ineffective, example. We've all been to at least one and if you haven't you need to go just to see how ridiculous they can get.

Investment Seminar Scam

So you get there and in 1 or 2 days you learn "everything you need to know" about XYZ concept, system, etc. Franticly you take as many notes as possible and vow to do the required steps afterwards.

A week later, all the notes and workbooks from the seminar are still sitting on your kitchen table - sound familiar.

Even if you try to pick them up later on to get working, you'll find yourself lost in your damn notes! Unaware of where to even begin you quit and start searching for another quick fix.

Here's the solution. . .

Building Up To 13.1 Miles Takes Time

Just as my wife didn't run 13.1 miles the first day, we also need to break down our learning into manageable chunks.

This is because we don't learn in linear form. We learn in stages of development and progressional building of concepts; from basic to advanced.

Let's say you want to learn everything about all the different option trading strategies for example. Here is how you might break this huge topic down into chunks (or miles) in your journey:

  • Week 1 Learn about the basic structure of puts and calls
  • Week 2: Difference between buying and selling options
  • Week 3: Combining two options as in credit spreads
  • Week 4: Advanced strategies; butterflies, iron condors, etc.
  • Week 5: Super-Advanced strategies; diagonals, broken wing butterfly, etc.

Notice that I didn't put Day 1, 2, three, etc. because there are so many more sub-topics within each week. So for one whole week you focus on just that strategy (or strategy concept) and dive deep into those.

learning with lessons

The next week ads some more complex layers but continue to maintain your focus on not expanding outside your schedule.

Back to your running example, if you are supposed to run 4 miles in week 2 don't run five because you "feel good" enough to keep going. There is a reason we need to stop and take breaks.

This gives our brain proper time to digest and process the overload of information we are giving it. Move too quickly and you risk completely forgetting everything you've learned to that point.

Add A Comment And I'll Personally Help You Learn Something New About Trading

By now you see why learning anything you want is very easy. The hardest part is determining how to break down the big concept into chunks or stages.

Add a comment in the section below and let me know what major topic you have been dying to learn about options trading and I'll reply back personally recommending a course of action for you.

For anyone who asks "How do I make money?" I will politely respond with "Search in Google and have a nice day" because that's not what I teach here.

Here's A Quick Bonus Video Tutorial

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But do you have a fear of how to correctly place an earnings trade?

If so. . . This quick video tutorial is for you because we’ll go step by step through 3 different earnings trades in MON, COST and YUM including how we selected our strike prices and contract months.

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About The Author

Kirk Du Plessis

Kirk founded Option Alpha in early 2007 and currently serves as the Head Trader. Formerly an Investment Banker in the Mergers and Acquisitions Group for Deutsche Bank in New York and REIT Analyst for BB&T Capital Markets in Washington D.C., he's a Full-time Options Trader and Real Estate Investor. He's been interviewed on dozens of investing websites/podcasts and he's been seen in Barron’s Magazine, SmartMoney, and various other financial publications. Kirk currently lives in Pennsylvania (USA) with his beautiful wife and two daughters.