A Plan to make $3k Monthly on $25k with Short Term Trades with Dan Sheridan

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Introduction

Short-term trading can be a lucrative endeavor, especially with a well-structured plan. Dan Sheridan, a seasoned options trader, has crafted a method to generate $3,000 monthly from a $25,000 investment. This guide will walk you through his approach, highlighting the key elements of his strategy and how you can apply it.

Who is Dan Sheridan?

Background and Expertise

Dan Sheridan is a veteran options trader with over three decades of experience. He is known for his practical and educational approach to trading, helping thousands of traders improve their skills and profitability.

Why Follow Dan Sheridan?

Dan’s strategies are based on real-world trading and have been tested and refined over years. His methods are designed to be accessible and effective, making him a trusted figure in the trading community.

The Core Strategy

Setting the Foundation

Dan’s plan revolves around a few core principles: consistency, risk management, and strategic trade selection. Let’s break down these elements.

Initial Capital Requirement

Why $25,000?

Starting with $25,000 provides a solid base to manage trades effectively and absorb potential losses. It allows for diversification and proper risk management without over-leveraging.

Identifying Short Term Trades

Selecting the Right Assets

Dan focuses on options trading, specifically targeting high-liquidity stocks and indices. These assets offer the flexibility and volatility needed for short-term trades.

Using Technical Analysis

Chart Patterns

Identifying reliable chart patterns such as bull flags, pennants, and head and shoulders can signal potential trade opportunities.

Indicators

Key indicators like moving averages, RSI, and MACD help in making informed trading decisions.

Risk Management

Position Sizing

Calculating Risk per Trade

Dan recommends risking no more than 2% of your capital on a single trade. For a $25,000 account, this means risking $500 per trade.

Setting Stop Losses

Placing stop losses is crucial. Dan suggests setting stop losses based on technical levels, such as recent support or resistance points.

Trade Execution

Entry and Exit Points

Precision in Timing

Entering trades at the right time is essential. Dan uses a combination of technical signals and market conditions to pinpoint entry points.

Exiting Trades

Exiting at the right time ensures profits are locked in and losses are minimized. Trailing stops and predefined profit targets are useful tools.

Types of Trades

Credit Spreads

Bull Put Spread

This involves selling a put option and buying a lower strike put option. It profits if the stock stays above the higher strike price.

Bear Call Spread

This involves selling a call option and buying a higher strike call option. It profits if the stock stays below the lower strike price.

Iron Condors

Iron condors are designed to profit from low volatility. They involve selling a put spread and a call spread on the same asset.

Monthly Income Target

Achieving $3k Monthly

Trade Frequency

To reach the $3,000 target, Dan recommends placing multiple trades each month, ensuring that the total profit from all trades meets the goal.

Consistency

Consistency is key. Regularly reviewing and adjusting the strategy ensures continuous improvement and adaptation to market changes.

Tools and Resources

Trading Platforms

Using reliable trading platforms with advanced charting tools and real-time data is crucial for executing Dan’s strategy effectively.

Educational Resources

Dan offers a wealth of educational resources, including webinars, courses, and community forums, to help traders understand and apply his methods.

Real-Life Examples

Case Study: Successful Trades

In one instance, Dan executed a bull put spread on a high-liquidity stock. The trade yielded a 15% return within two weeks, demonstrating the effectiveness of his strategy.

Case Study: Managing Losses

Another example involved an iron condor that initially moved against Dan’s position. By adjusting the spread and using stop losses, he minimized the loss and maintained overall profitability.

Common Challenges and Solutions

Market Volatility

Volatility can disrupt even the best plans. Dan emphasizes the importance of staying adaptable and being prepared to adjust strategies as needed.

Emotional Discipline

Emotions can lead to impulsive decisions. Following a structured plan and sticking to predefined rules helps maintain discipline.

Conclusion

Dan Sheridan’s plan to make $3k monthly on $25k with short-term trades is a structured and disciplined approach to trading. By focusing on risk management, strategic trade selection, and consistent execution, traders can achieve significant returns.

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