Most trading method / system require a certain degree of bias to predict the market trend or direction in order to make money from the market. If you have been trading long enough you will know that this is very difficult no matter how good you are or how complex your software is. Predict where the market will trend is a difficult task for many of us. On the other hand predict where the market will not go is a much more easier task. Non Directional Trading is about making money predicting where the market will not go.
Which is easier?
To predict where the market will go or to predict where the market won’t go?
Non directional trading generally do not predict nor anticipate where the market will go.
Making money weather the market move up, move down or sideways after the position has been initiated
We have heard of term making money in up and down markets, you can make money in up or down markets provided you correctly anticipated where the market will go before you initiate the position. Once a position has been initiated you can only make money if the market head your ways. As a Options Seller you can make money in Up, Down and Sideways market even after you have initiated the position.
Be wrong and still able to profit
You can be totally wrong as a Options Seller and you are still able to profit. You can be selling far out of money put because you are bullish on market direction. You can be wrong and market go against you but you can still be making money as long as the options you have sold did not go in the money by expiration.
Making money predicting where the market will NOT go
We have stress and emphasis on this one again and again. We can now make money predicting where the market will NOT go instead of where the market will go. It is easier to predict where the market will NOT go and extremely difficult to try to anticipate where the market will go.