Real-time options education and strategies
In the past I’ve highlighted many times the importance of the 8 and 20 SMA bands for analyzing price action. I’ve just recently introduced you to the 1.5 standard deviation 20 SMA Bollinger Bands. The Bollinger Bands can add another dimension to your analysis because many of the strongest directional moves occur well away from … Read more
Lots of traders like to day trade. Some like to swing trade. Most don’t know how to decide between the two. So here’s a thought; how about I let the price of the underlying instrument determine that for me? How’s that work? Read on and you’ll find out! On that risk profile (above) of day … Read more
This post is going to demonstrate how I use Call Condors to initiate longer-term (typically 3 months to 1 year) positions with relatively little directional risk when the trade is first placed. It is a trade that is designed to profit from a trending stock. If you look at the Thinkback chart and risk profile … Read more
The 30 minute chart with the weekly high, low, and half-back (50% retracement) lines automatically drawn. For TOS users here’s a link for that chart setup: https://tos.mx/CKQburZ. Everything is explained on the two charts. If you have questions or comments you can contact me through the twitter feed.
The SPY was showing signs of weakness on Wednesday even as the daily candle was forming a large 2u candle. Market profile helps expose the internal structure of the daily candle and allow for a look ‘under the hood’. The emotional buying on Wednesday led me to tweet this observation. Below is the actual chart … Read more
Before I go into the specifics of these trade scenarios using the SPX daily chart I want to make the point that I use the same strategy with the same parameters on charts on all time frames. The levels referenced in this post are based on the prior candle so the same analysis applies to … Read more
The first step in my process of initiating a new option position is identifying a promising chart setup. I’ll consider setups on various time frames anywhere from the 65-minute charts all the way up to the monthly charts. My typical trades originate from the daily and weekly charts but I’m always looking for the best … Read more
One of the most reliable chart patterns for an upcoming directional trend is the consolidation range. Below is the daily chart of MU. Price experienced a strong 45% rally from the beginning of November thru December 4th. Since then price has moved sideways in a $5 range between ~69.50 and ~74.50. Since a range like … Read more
There are two key ingredients in any successful options position. The first is trade location. This is the most difficult step even for experienced traders. Just look at most any price chart and it seems like a series of random moves in either direction. I have spent many years trying to interpret those price moves … Read more
For the purposes of this post I be focusing on the longer-term charts, primarily the weekly chart. The weekly chart is particularly useful for finding entries into option positions with 3+ months of duration. Of course they can be used for shorter-term trades but a balanced option portfolio will be comprised of bullish and bearish … Read more