• To create weekly cash flow
• To generate long term wealth
• To gain technical competence in the market
• To have a better understanding of how financial markets work
• To create a consistent source of income through trading
• For the love of the game
• In an effort to build mental toughness

Standard Swing Trades:

I’ll have a technical approach, establishing positions in symbols with a daily Squeeze near the mean (21 EMA Daily) while attempting to maintain a theta positive portfolio.

Directional calls/puts will give you the best movement per dollar with the underlying, but if we assume that time is going to continue to move forward we must consider the importance of maintaining a theta positive portfolio.

I’ll focus on swing trading BULLISH equity options on stocks in strong sectors that have Weekly – 4D – 3D – 2D – Daily Squeezes. The market is an investment apparatus that rises. Since 1942 which is the last 78 years (including 2019) the market (S&P 500) has been up 62 of those 78 years if you include dividends, which, of course you do. Even further, the average return for an up year was 19.3% and the average return for a down year was -12%. So, this magical apparatus not only wins 80% of the time, but when it wins it does so larger than when it loses. Losing money in the stock market long-term, at least in the past, has actually been hard. The biggest impact on returns is simply fear. We tend to get fearful as stocks go down and sell at the bottom. We tend to get fearful of missing out as stocks go up and buy at the top. If either of those behaviors is curtailed, it can just be one of them, then in the last 78 years, yes, “losing” would have been difficult.

Source: https://twitter.com/OphirGottlieb/

Pinning Trades:

I’ll look for stocks that trade tons of volume. At least 10 million shares on a daily average.

I’ll look for stocks with large amounts of open interest around “big round numbers”, aka key psychological levels. $50, $100, $500, $1000 are good examples of these.

I’ll establish theta positive positions 1 – 10 days before expiration and manage for 20 – 80% gains, or be willing to hold into, but not through, expiration for potential pins.

• Pinning trades tend to work best during witching expirations: MAR, JUN, SEP, & DEC. Second best performance comes from monthly expirations and third weekly expirations.

My favorite spread strategies for these pins are Unbalanced Butterflies and Iron Flys.

• The biggest decision on Unbalanced Flys vs Iron Flys is whether you have a directional bias. With an Iron Fly you will always have one short contract in the money. With the Unbalanced Fly you can trade more with the trend, focusing on keeping the short put either at the money, or ideally out of the money.

Elephant Trades:

• I’ll start with the foundation of a weekly Squeeze and look for a nested Squeeze on the 4D – 3D – 2D – Daily – 195m and 130m charts.
• I’ll look for companies with a smaller market cap, usually between 5 – 10 billion.
• I’ll open options trades with at least 100 DTE around a delta 0.20 looking for a 5x return prior to expiration.

15 Minute EOD Squeeze Trades:

Anchor yourself to daily charts. Find a chart you want to buy because of the setup on the daily chart. This could be off a major 0.618 retracement, daily symmetry, or a major Voodoo Line.

Then look for a 15 minute Squeeze (generally a Standard Compression Squeeze) that has not fired into the close. The idea is that the compression of the Squeeze can’t resolve during the cash session it was created in, and then releases that energy on the next open.

I will take this trade with short puts/spreads or long calls.

• Long calls are easier to take earlier in the week, when time decay is not as prevalent. Later in the week I prefer put spreads that can decay very quickly as they get closer to expiration.

Post-Earnings Continuation Trades:

• Must be bullish
• Look for earnings results that move the stock 2x (or more) the expected move.
• Sell at the money or out of the money puts for the following week.

Continued compound growth.

If I make more than $987 a week, the difference is added to the account balance.

Withdraw 1/2 my remaining trading profits on DEC 31.

If the account has $150k in it, withdraw $25k and leave the remaining $125k, upping the weekly withdrawal if you like.

Tastyworks Account:

This was started with the intention of “growing as much as I could”. More notes on this to follow.

• Weekly cash withdrawal.
• To create a bullish equity curve while promoting a relaxed state of mind.
• To swing trading equity options with zero emotion. To look at options trading like playing chess. With strategy instead of reaction.
• Meditation is helpful in this pursuit. I’ve created a YouTube playlist that traders may find helpful if unsure where to start. https://www.youtube.com/playlist?list=PLPlT0NAszgF86UifXoqXlPS_Py-hhnNvB

Equity Options that have Voodoo Lines with a focus on CML Pro stock picks.

Weekly – 4 Day – 3 Day – 2 Day – Daily – 390m – 195m – 130m – 78m – 39m – 15m These intraday time frames are all divisible by 390. There are 390 minutes in the cash session, so this makes for very clean swing based analysis.

• Standard Squeezes

Begin by evaluating IBD Ratings.

• Focus on names with high composite ratings and group leadership.
• Focus on stocks within 10% of 52 week highs and within 20% of lifetime highs.
• Nested Squeezes
• Fibonacci Clusters
• High Short Interest Direction + Implied Volatility into Earnings (“Run Into Earnings”)
  • This trade can be put on anywhere from 1 day to 21 days prior to a company’s earnings report.
  • This trade setup is most always bullish, or at least the bullish ones tend to provide the best results.
  • Call options should be purchased in the same series as the earnings report. Traders may vary their delta depending on what kind of move they’re expecting. This is one of the few times I’ll consider delta 20, sometimes delta 10 options. Out of the money options will pay better if the stock has a significant move. In the money options will hold their value better if we trade more sideways.
• Implied Volatility into Earnings
• IV Crush for Earnings
  • Delta Neutral
  • Bullish
  • Bearish
• Elephant Trades
• Pinning Trade
  • Does the chart agree with the chain?

• Build swing based trades by adding at the 21 EMA until a full position has been established.
• Look for a close above the High Of the Low Bar on weekly or daily timeframes to establish a bullish position.
• If you have a Fibonacci cluster or a Voodoo Level you’d like to buy, look for the HOLB confirmation on a 15 minute chart.

Exit Rules:

There are 4 Fibonacci based targets that I’ll consider when setting up a swing trade. The first is the previous high. The other 3 are extensions of the previous high using the coefficients 1.272%, 1.414%, and 1.618%. You may also consider the 2.618 and 4.236.

Voodoo Lines may also be used for exits, focusing on levels of significance greater than a Skyline. (Fireline, Treeline, Snowline, etc)

HOLB/LOHB – If I want to try to let a position run, I’ll look to weekly and daily charts looking for these signs of reversal.

If a position closes below the 21 EMA, I have to consider the proximity to the 50 SMA as that’s generally the next moving average I’ll look to for support.

• If the 50 SMA is too far away (generally more than 2%) I’ll close the position.

Get better at selling at the high. Examples like WORK.

Stops – How will I define my risk?

100% of risk is calculated prior to entering a trade. No position should ever lose more than 5% of my account and more commonly should not exceed 2-3%.

• Download Fibonacci chart images.

This is a good habit, but I don’t do this as much anymore. I really just run my own Fibs on symbols I’m already interested in.

• Run a scan for Nasdaq 100 Squeezes.
• Run a scan for Squeezes inside “Henry’s 21” stocks.
• Run JC’s pre-market scan for any stand out volume/activity (http://bit.ly/hg_jcpremarket)
• Run a scan for Squeezes with 10% of 52 week highs (http://bit.ly/hg_squeeze10)
• If I’m up early enough with good coffee, see what’s happening on the IBD homepage.
• DO NOT LET THE NEWS DICTATE YOUR DECISIONS.

Make notes on entry signals.

Ensure any losing positions still fit within the criteria of the setup.

Set profit targets, conditional entries, and exits for the next trading session.

• Review symbols that come through daily updates via Chaikin Analytics along with best in class rankings via the web platform.
• Review the setups Carolyn (The Fibonacci Queen) is watching.
• Update the IBD 50 & IBD Innovators list monthly.
• Analyze Top 10 holdings inside primary Sector SPDRs – Update Monthly or Quarterly.
• Reference Simpler Trading scanner looking for Daily Pop Squeeze Candidates and MTFA Squeezes.

• Simpler Trading Scanner This is an excellent resource if you don’t have Think or Swim. If you do, most of the scans that I like can be set on the platform. If you don’t, you will benefit from using the web based scanner.
• Tradervue
• Chaikin Analytics
• Investor’s Business Daily
• CML Pro
• CML Viz
• Wingman Tracker
• Estimize
• Earnings Whisper
• Handwritten Journal
• Techsmith’s Snag It (Image logging software)

• Mastering the Trade – 3rd Edition
• Fibonacci Trading – How to Master the Time and Price Advantage
• Stock Trader’s Almanac Forward test new trade ideas with 2 contracts. 2 contracts allows you to take a quick, small % gain on the first lot, simultaneously taking half your risk off the table, making it easier to try and maximize the final contract. Expand into multiple accounts/brokerages – No less than 2 – No more than 5.  Having at least 2 brokerages is vital, should one have technical problems and you can’t access your account. No more than 5, as I’ve found above this level promotes a lack of discipline in management.

• I won’t buy a market when it’s up more than 2% on the day. I won’t short a market when it’s down more than 2% on the day. Exceptions to the 2% rule includes 2x Earnings Moves and Index Flush trades.
• When the 10 day SMA of the $PCVA closes above 1.0 I won’t pursue directional, bearish equity positions. This is also worth watching intraday for potential reversals.
• Practice Daily Meditation Articles in favor of meditation: https://www.insider.com/morning-meditation
• Practice Daily Yoga: https://youtu.be/o8DNxR90g6o