Dykstra: You Gotta Believe!

Here's a key part of my system: You must have confidence that the deep-in-the-money calls system works in order for it to work for you.

Last week, we racked up some monster wins. However, they required some intestinal fortitude. All told, I rang the register eight times for a total of $30,340, following five wins for $15,700 the week before.

Essentially, my system calls for adding to positions that are sinking in order to lower the average entry price of a pick. By doing so, it allows me to lower my good-till-cancel (GTC) sale price. When the option bounces, I can grab a quick victory.

I've written about staying patient before -- having nerves of steel -- but that is sometimes easier than it sounds for those that are new to my system.

In my May 14 column, I suggested that readers purchase 10 January $30 (MSAF) calls of Morgan Stanley (MS Quote - Cramer on MS - Stock Picks). The pick required an initial investment of $17,600. The investment bank then proceeded to fall further.

We hit a rebuy level. We added 10 more contracts, this time investing a total of $17,200 more. The stock continued to fall. We hit another rebuy level, this time putting down another $14,000.

When all was said and done, we had 13 rebuys and more than $150,000 locked into this position -- a hefty sum for many investors. I got emails from many readers asking whether it was time to bail; they thought Morgan was too deep underwater and it was time to cut and run. They got nervous about the investment dollars laid down. This is where faith in the system comes into play.

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