You're listening to the Option Alpha Podcast from Option Alpha.com where we show you how to make

smarter trades learn how the stock market really works and generate consistent monthly

income. Now your host and head trader at

option alpha.com Kirk depluses.

Hey everyone this Kirkier again at option alpha.com working every single day to make this the most popular

investing podcast offered online and in iTunes because it's based on one thing and one thing

only and that's helping you guys make smarter trades. So thanks so much again for

tuning in today. On today's show we are going to be talking about how market direction

becomes irrelevant when you average down and I'm not necessarily talking about averaging down in the price

that you pay for a contract or the credits that you collect.

It's really this concept of averaging down and around wherever the price of an underlying

security goes and increasing your trade frequency which means that market

direction over time becomes more meaningless to you.

So let's take one step back even before we kind of jump into what I'm talking about on the

option side and just talk holistically about why trade frequency and high probability trading is

so so critical and I think the idea that people miss time and time again is this idea of sequencing risk. It's this idea

that we don't know even in a high probability system when we are going to be

faced with a sequence of either favorable trades or not favorable

trades.

In fact, a lot of times people will ask and they'll say, Kirk, I want to see your last 10 trades

or I want to see your last 100 trades and I will decline that and say it's irrelevant

because the last 10 or 100 or pick a random number besides all of the trading

...