Real-time options education and strategies
Below is the SPX daily chart showing the move from the ATH in Feb to the 4/7 low. Following waves 1 down and 2 up the expected target based on the Fib extension was around 5000 which was near the 123.6% ext. Price actually dropped below the 138.2% ext. but reversed strongly there. That turned … Read more
If I handed you a book and said that it had information in it that could potentially make you a great deal of money I’ll assume you’d open it with great anticipation. You might think “I’ll just read the book and start making money right away, what could be easier than that?” You open the … Read more
Some traders may use the SPX short Call Diagonal simply as a way to collect premium and focus less on the potential directional implications of that trade. That isn’t the way that I trade them because I have certain directional expectations based on chart setups. On the chart (below) I show 2 setups. There are … Read more
Let’s say I’m looking at the daily candlestick chart of Apple (AAPL). The IF/THEN of chart analysis goes something like this: IF the prior candle is bullish THEN price should find support at or above the Fib support zone of that prior candle. IF price opens the following day below the Fib support zone THEN … Read more
Below is a description of how I traded Tesla this week. This post, as well as all of my other posts on this blog, are for educational purposes. They aren’t trading advice. You should never risk your capital based on how someone else trades. Learn from others then develop your own trading style which suits … Read more
Sometimes things aren’t what they seem to be. That’s especially true when looking at charts! You need a method for identifying where buyers and sellers reveal their true intentions. Fibonacci levels can provide the framework for that method! Below is a Tesla (TSLA) weekly candlestick chart from the past. At the time of the most … Read more
Before I get into the details of this post it’s time for another reminder that all posts on this blog, and all of my posts (tweets) on the VegaOptions Twitter account, are for educational purposes only. They are not trading advice! I know that’s a standard disclaimer but it’s something to take seriously. Don’t just … Read more
Over the past couple years on this blog I’ve shown countless option strategies and chart setups with the goal of educating traders on ways to reduce risk in trading. Still, there are many, actually I’d say most, traders who are confused and suffering from information overload and I may be guilty of adding to that. … Read more
This will be a short post which I will revisit and add more content if/when I have time. The topic is the short Diagonal which is a Credit spread. Being a Credit spread means that the short leg is closer to ATM (at-the-money) and the long leg is further OTM (out-of-the-money). Credit spreads have a … Read more
I use Fibonacci retracements & extensions (Fibs) extensively in my trading. Fibonacci sequence numbers (1,3,5,8,13,21,34,etc) have a fascinating relationship with growth rates in nature but that’s not why I rely on them for my trading. The fact is that many (if not most) trading algorithms are programmed to trade Fib levels as both retracements of … Read more