Each morning, the blog releases new Silver and Gold Treasure Maps.
The title of the blog post will look like the following –
“__#__ Active, ___#__ Triggered – Trade Updates – Date” – each morning access the blog by looking for them in your email or going to the site directly.
They are a description of some of the charts I am looking at, as well as trades I have to set up to trade each morning.
- When the instrument name is GREY, it is on a watch list
- When the instrument name is BLUE, it means that I am active in the trade
- When the instrument name is ORANGE, it has an action event trigger – it means that I have a trade set to execute
- All my trades are limit trades, or limit long or limit short –
- I recommend strikes at the money, but if you look at the option chains and the volume is light, the spreads will be wider and it is far less likely that I trade using the options if the spreads widen
- I take trades of long stock is the trade is long, as well as calls, short puts, or short put spreads –
- Beside the BRIGHT BLUE BOX (to its right), it shows the trade I have set out to execute based on price.
- I DO NOT ALLOW TRADES TO FILL IF THE CHARTS ARE GAPPING IN EITHER DIRECTION– using limit, and limit long or limit short orders preserves this process
- If I have a trigger set and it does not fill, it may mean that the chart did not come into my entry space. I will not chase trades
IMPORTANT ENTRY CONSIDERATIONS
I am telling you what the choices I see as viable to me at the time: the choices I make for myself. I am never telling you what to do, only what I do.
- Review options chain volume.
- Low volume means big spreads.
- Big spreads mean bigger risk.
- The bigger risk from bigger spreads means a likelihood that volatility will affect profits.
- Use stock, if option chains are light
AS YOU PREPARE TO
- Realize first targets are very reliable, and when markets shift through trending and non-trending patches, it is a good place to always take profits
- In general, in non-trending spaces, I will remove 50% of my position at 1st target, 25% at 2nd target, and I use a trailing target from there
- Trailing stops are useful after first and second targets have been met
- Stops are hard for the swing trading portfolios
- Trades will execute at the time price presents during regular trading hours
EXAMPLE OF RECENT CLOSED TRADE
This trade opened on 11/23/15 after I put an order out before the market opened. The trade closed 12/4/15
- I had two entries – one short at 92.4 and another at 92 –
- I was short stock, long puts – I did not take the spreads – I rarely do
- I was filled at the stock levels and long puts for $2.45
- The chart moved rapidly into the first two targets and a trailing stop was set on 12/4 for the remaining ( I should have left the trail much wider)
- The options were closed at $4.01, and the stock was covered at 89.7
a) If you enter prior to my entry, or days after my entry, there is a higher likelihood of failure.
When in doubt, stay out. If you cannot understand the rationale for the trade, disagree with the trade, or cannot conceptualize the trade parameters, do not take the trade
There are some very important rules that each trader should carefully hold to in general -here they are
1) NEVER USE DIVERGENCE TO GET INTO A TRADE WITHOUT PRICE GIVING YOU THE CONFIRMATION
2) IF MOMENTUM IS STRONG, CHARTS WILL NOT OFTEN RETURN TO THEIR BREAKOUT/BREAKDOWN LEVELS
3) IF MOMENTUM IS WEAK, CONFLICTING ACROSS TIME FRAMES, OR ABSENT, A CHART WILL ALWAYS RETEST ITS BREACH LEVELS OF IMPORT
WATCH YOUR POSITIONS CAREFULLY