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Review and Experience with Dan Passarelli’s Market Taker Mentoring Program

Market Taker Mentoring Program Overview

Learning options trading with the Market Taker Mentoring program got me one of the best veteran options traders to be my private coach for 9 weeks.  Having an industry professional like Dan Passarelli as a mentor meant I  had access to his 16 years of professional experience, tools, and techniques that you just don’t get with some self-made mentors.  There are risk management techniques and discipline that professionals adhere to, or their risk managers supervisors enforce, that give them a much better chance of continued success.  I came in to the program with over a year of stock trading experience and had my own trading style (i.e. specific types of trades I preferred) already figured out.  However, prior experience isn’t exactly that important.  Dan has worked with people of all skill levels and had made a point about personalizing the mentoring program for your unique conditions.  Also, know that many professional trading firms prefer training and hiring people with limited market experience because new traders have less market “baggage” or preconceptions of what they should do versus what is actually the right way to trade.  So, as long as you’re determined to learn options trading this mentoring program should help you become the best options trader you can be.

All mentoring students get a personalized 9-week one-on-one mentoring sessions as well as Dan’s book “Trading Options Greeks,” live webinar class access during the mentoring sessions, and archives webinar and website content access for life.  Studying “Trading Options Greeks” as soon as you receive it helps prepare you for the mentoring sessions.  Also, the book is a great resource to refer back to.  The webinar classes is the same weekly webinars offered on the Market Taker Mentoring website.  The webinar lesson plans for each month are usually focused on different topics.  For example, one month may be focused on vertical spreads only, with each week concentrating on a different aspect or strategy concerning vertical spreads.  Focusing on one topic per month ensures students learn each topic well.  Each month usually begins with an intro class about the basics of that month’s topic, followed by analysis and application of various strategies, finishing up with advanced explanations of how the options markets work from the inside so students can think and trade like professionals.

Program Impression

While I signed up for a one-on-one mentoring, the full benefit of the program was actually a holistic one.  Meaning, the importance was the whole and the interdependence of resources offered:  one-on-one sessions, studying Dan’s “Trading Option Greeks“, and taking his weekly webinar classes.  Indeed, the program was like an advanced college or graduate course with “Trading Options Greeks” as the textbook.  Also, a simple but important road map is the Market Taker Trading Path in which Dan states in a couple steps how to build your trading plan.

The weekly webinar classes is the lecture where Dan teaches the concepts and methods from his book, but in an interactive learning environment reinforcing the ideas from various provocative angles of analyzing each concept or strategy.  As a former CBOE (Chicago Board of Options Exchange) instructor, Dan has trained all kinds of people including retail (individual) traders, institutional (professional) traders, money managers, market makers, and investment advisors in both the U.S. and Canada.

The one-on-one mentoring sessions is the important time to put it all together with Dan beside you.  It’s when you learn to correctly put things into practice.  Just as with school, things you study and learn about are great foundation but the actual application in the real world is a bit cloudy.  It takes experience to get it right.  Dan helped go through ideas with me, challenged me, and helped me see things with trades I’d never think about on my own.  My learning curve was exponential.  As Mark Douglas talked about in “Trading in the Zone,” there are many things you’ve won’t think about simply because that concept doesn’t exist in your “world” yet.  As many people know, I’m allergic to just about everything.  So, people can go on talking about the different types of chocolate for hours, but I won’t understand a thing because the taste of chocolate doesn’t exist in my world.  The same goes for trading as well as anything else we’ve ever experienced.  Often, you just need a mentor to introduce that idea to you.  When we started extrapolating beyond the basic methods, and actually tracking trades and how these things played out in reality, that’s when the lessons really solidified my understanding of options.

Because Dan wrote the book and personally does the webinars and mentoring sessions, learning across these three mediums is comfortably integrated.  Unlike in college, you won’t have to read a textbook by some author, then be taught differently in class by your professor, then have followups by a Grad Student that also has a different approach.

The Mentoring Experience

The great thing about Market Taker Mentoring is that it’s personalized to each student’s experience, knowledge, and goals.  So, the following is just a basic review of how my mentoring sessions generally played out.  Aside from the very first session, which was an assessment and discussion session, the lessons were conducted online through GoToWebinar with which both Dan and I could share our desktop with each other.  Thus, it was completely hands on and interactive.  Rather than just explain to me what he might do to research and analyze a trade, I could see exactly what he was doing on his desktop.  We used tradeMONSTER’s platform quite a bit for analyzing trades, considering war-game “what-if” scenarios for preparation, and comparing the options greeks for different strike prices and options combinations.  For volatility analysis, we often used the free website version of LiveVOL (which you can get with the “try it” button).  Dan stressed early on the importance of analyzing volatility, which is a cornerstone of options but something that isn’t mentioned nearly enough by most options traders.

There was an earnings trade in Adobe (NASDAQ:ADBE) that I did not take but wanted to analyze after the fact.  Dan was able to use his OptionsVue software, which I did not have, and replay the trade from before the earnings announcement.  we were able to look at all the options greeks and volatility and consider all the possible options strategies to find the one that would be the most profitable.  While the ADBE trade had passed, I learned how to analyze potential trades.  More importantly, I understood why each options strategy produced different results and why a particular strategy was the most profitable.  Unlike stocks, options are multi-dimensional and a completely different animal.  A stock may move exactly as you predicted and you would’ve profited, but you may not have made money on the stock’s options or even have taken a loss.

Each week we progressed to discussing slightly more complex ideas or considering more in terms of the edge in a trade, the opportunities, the risks, and creative ways to design the best strategies.  As mentioned in the ADBE example, many options strategies may be profitable for your outlook on a stock.  Still, you want to devise the most favorable strategy to give yourself the best chance of success.  Many sessions we found great trades and designed strategies that profited nicely.  However, one of the best sessions was one where none of the stocks on my watchlist were good options plays.  We couldn’t design any strategies that would give me an edge and favorable circumstances that warranted taking the risks for that trade.  It was great having experienced eyes by my side, helping to take apart different strategies, and explaining why each strategy was not worth while.  I was able to finally see for myself what bad trades look like so I know to avoid them in the future.

Why Mentoring?

Some of the best things Dan spoke to me about were his experiences as a market maker on the trading floor. The things he preaches come from years of surviving on the floor, losses he took, professionals he’s seen fail, and risk managers who watched over him to make sure he stayed out of trouble.  Many of these details we as individual traders never think about.  Even if we realized the problem, we probably wouldn’t know what to do or how to do it right.  It was wonderful for Dan to pass some of these “trade secrets” down to me, some of which was passed down to him, such that I didn’t have to reinvent the wheel.  Rather, I can focus on how to make it roll better.  Reinventing the wheel may be an honorable endeavor, but most of us do not have the time nor the money to do it.