John Carter: The Simple Options Trading Setup That Made $18.2 Million Profit in 1 Year

Mastering the Markets With Simpler Trading

John Carter, author of Mastering the Trade and founder of Simpler Trading, has been a full-time trader since the 1990s. Known for his structured approach to options trading and risk management, he’s built a reputation for spotting high-probability setups and maintaining the right mindset in volatile markets.

His ability to adapt to market conditions, develop proven trading strategies, and teach others has made him a respected figure in the trading community. Let’s dive into his journey, trading philosophy, and key lessons.

“The market will always be open tomorrow. Stay patient and wait for your setup.”

John Carter

How John Carter Got Started in Trading

John Carter’s introduction to trading came in high school when he overheard his father and friends discussing stocks. His first trade was in Intel options, turning a summer job’s earnings into a quick profit.

This early win hooked him on trading, leading him to spend years refining his strategies. However, the path to success wasn’t linear, Carter experienced multiple boom-and-bust cycles, including a devastating $150,000 loss right before purchasing a house.

This painful lesson taught him the importance of risk management, a principle that later became the foundation of his trading strategy.

Key Lessons from Carter’s Early Years

John Carter’s Trading Strategy: The Squeeze Setup

One of Carter’s most well-known strategies is the Squeeze, a volatility-based setup that identifies price compression before a breakout. This strategy allows traders to position themselves before significant market moves, increasing their probability of success.

What is the Squeeze?

The Squeeze setup is based on the concept that low volatility leads to high volatility. When a stock moves sideways and compresses in a tight range, it builds up potential energy.

Once that energy is released, the stock typically makes a large directional move.

• When Bollinger Bands contract inside Keltner Channels, it signals a squeeze (low volatility).
• A red dot appears on Carter’s Squeeze Indicator, indicating a high-probability trade setup.
• Momentum helps determine if the breakout is likely to be bullish or bearish.
• When the Bollinger Bands expand and the squeeze “fires”, the price explodes in one direction.

Identifying the Best Squeeze Setups

Not all squeezes are worth trading. John Carter looks for high-probability setups by combining multiple factors.

How John Carter Trades the Squeeze?

John Carter avoids chasing breakouts by getting in before the move happens. This allows better risk management and positioning for big asymmetric gains.

1. Best Entry Point: During the squeeze, on a pullback to the 21 EMA.
2. Confirmation: Momentum shifts in the expected breakout direction.
3. Secondary Entry: After the squeeze fires and price retests breakout levels.

Entering before the squeeze fires by placing limit orders near the 21 EMA requires strong conviction and a tight stop-loss. Early entries allow for maximum gain potential with minimal risk.

Entering after the first breakout candle that closes with strong momentum also has less risk, but sometimes you miss part of the bigger move.

When taking profits, John Carter will scale out into strength.

• First target: +2 ATR (Average True Range).
• Second target: +3 ATR, take partial profits.
• Final target: Hold a portion for the bigger move.

If the squeeze fails to fire or momentum weakens, he exits early.

John Carter’s Trading Examples

John Carter has executed many high-profile trades, but three stand out due to their massive profits, smart risk management, and precise execution.

Tesla – a $14 million trade

Carter’s Tesla trade in 2020 is one of his most famous, netting him over $14 million in profits.

The Setup

• Tesla had been consolidating after a big run-up.
• Carter spotted a Squeeze forming on the daily chart, signaling a potential breakout.
• The stock had strong bullish momentum, supported by stacked moving averages.

The Trade

• Instead of buying shares, Carter used deep-in-the-money call options to leverage the move.
• He entered long call spreads to reduce risk while maximizing returns.
• His position size was large, but he had strict risk controls in place.

Symbol: TSLA
Company: Tesla, Inc.
Date: 2020

Click on the chart above to make it bigger.

The Result

• Tesla exploded upward as expected, and Carter scaled out of his position gradually.
• He secured $14 million in profits, cementing this as one of his biggest wins.

Amazon – a post-earnings squeeze

Amazon is one of Carter’s favorite stocks to trade, and in 2018, he executed a textbook Squeeze setup after earnings.

The Setup

• Amazon reported strong earnings, but the stock didn’t immediately react.
• A Squeeze appeared on the 30-minute chart, showing that a breakout was imminent.
• Carter noticed that implied volatility was still high, making options trades more expensive.

The Trade

• He sold put credit spreads to take advantage of Amazon’s expected move upward.
• By selling spreads instead of buying calls, he collected premium while limiting his downside.
• His risk was predefined, and his stop-loss was set just below the breakout level.

Symbol: AMZN
Company: Amazon.com
Date: 2018

Click on the chart above to make it bigger.

The Result

• Amazon surged higher, breaking out of the Squeeze.
• Carter closed the trade for a six-figure profit within a few days.

Netflix – catching a major reversal

Carter’s Netflix trade in 2019 was a perfect example of buying the dip at the right time.

The Setup

• Netflix had been in a strong downtrend and was approaching a key support level.
• Carter saw institutional buying activity (based on volume spikes).
• A Squeeze appeared on the 4-hour chart, signaling a potential reversal.

The Trade

• Carter bought long call options, anticipating a bounce.
• He used a small position size because he was trading against the trend.
• He set a tight stop-loss just below support to control risk.

Symbol: NFLX
Company: Netflix, Inc.
Date: 2019

Click on the chart above to make it bigger.

The Result

• Netflix rebounded sharply, validating his thesis.
• He scaled out of his position, locking in profits as the stock climbed.
• The trade generated over $500,000 in profits in just a few days.

How Carter Manages Risk in Trading

John Carter is known for his ability to take calculated risks while keeping his trading capital protected. He understands that risk is unavoidable in trading, but controlling it is what separates successful traders from those who blow up their accounts.

His risk management approach revolves around position sizing, portfolio hedging, trailing stop-losses, and scaling out of trades.

John Carter’s Approach to Risk Management

By following these principles, Carter stays in the game long enough to capitalize on the best market opportunities.

Handling Market Volatility Like a Pro

John Carter thrives in fast-moving markets where big price swings create massive trading opportunities. But with high rewards come high risks, and Carter warns that traders must learn how to handle volatility to avoid emotional decision-making and major losses.

Market volatility can lead to huge gains if managed properly, but it can also wipe out accounts if traders don’t have a plan. Carter has developed specific strategies to stay disciplined, protect profits, and capitalize on wild price movements.

Surviving 2020’s Wild Markets

In 2020, John Carter’s account skyrocketed thanks to aggressive Tesla trades. However, his equity curve had wild swings—he was up 300% one month and down 33% the next.

To manage volatility, he:

For traders looking to navigate unpredictable markets, these strategies can help turn chaos into opportunity while protecting capital for the long run.

Final Thoughts: Keys to Long-Term Trading Success

John Carter’s trading journey offers valuable insights for traders at all levels. His biggest takeaways include:

• Master your mindset – The market will test your discipline; staying unemotional is crucial.
• Risk small, win big – Proper position sizing and hedging prevent catastrophic losses.
• Follow the setup, not your emotions – Stick to a structured plan.
• Market cycles matter – 2020 was exceptional, but high-probability setups happen every year.
• Extract profits regularly – Trading isn’t a game; secure your gains.