Evening readers! Today was a bit rough due to having court. Challenge started off well but ended up a bust. All in all we had the right idea and plan only thing was sticking to it.
Started with $500 today for the challenge and if I stuck to strategy it would’ve been between a 10-50k day and below I explain the day in and out.
My first thoughts was this is a head fake just luring shorts into a clean bear trap. So I didn’t jump quickly I waited.
9:37am (Riding the bus 10mins until arrival) First trade 1 contract 2580p in at 1. here price kept seesawing. So I told myself to wait because usually ill close out for 5-10% gain which isn’t much on 1 contract so I held. Price hit 1.25 high so here I started watching calls based off Fib screenshot below.
10:02am (still on train) Bought 1 contract 2700c at 1 to hedge my puts.
10:32am. Added to my puts added 3 cons at .55 to average down
10:42am. (just arrived at court) added 2 more cons to my calls.
Here was were I messed up. I meant to close my puts when they reached .90. By this Tim when puts were valued at .90 calls where trading at .20 ask which would’ve allowed me to buy $300 worth of calls which would now make a total of 18 contracts. valued at .24 per contract. Distractions Distraction. Sitting there and watching it play out target was at least 500% from that bottom. Instead while I walk to elevator price is jumping so now my 3 cons are trading at 1.80 each which then my team alerted me when 2 was on the bid but by the time I got notice it went back down.
12:59pm. Opportunity missed. 2.20 high then races back down to .15
2:12pm: Price is now hit .65 then came down to .05
3:45pm. Price hits high .60 which is 1000% from the lows of these calls
This was the reload to going all in one last time. Which didn’t happen because of course distractions distractions court and greed. But this would’ve been a clean challenge possible 500 into 10-20k.
Best part is I know what that my plan would’ve worked if I stuck to it .
WILL BE RE ATTEMPTING THIS CHALLENGE NEXT WEEK MAYBE SMALLER TO KEEP FROM BEING GREEDY! NO DISTRACTIONS AND BETTER REACTIONS.
What are Keltner Channels?
Keltner Channels are volatility-based envelopes set above and below an exponential moving average. This indicator is similar to Bollinger Bands, which use the standard deviation to set the bands. Instead of using the standard deviation, Keltner Channels use the Average True Range (ATR) to set channel distance. Read more here->(Credit: stockcharts
Why not use Bollinger Bands instead?
Personally i’m not against them or any technical indicator traders rely on. This is what best works for me and thats what matters.. Kelts give me a clearer signal to where price can end up in any given time frame. I use it as my support and resistance indicator. This plus 14+30sma = 3 Ladies. This ill come back to very soon.
What settings do you use?
I like to keep things “SIMPLE”.
My Preferred Settings(below) tweak to your comfort..
What do you look for?
Confirmation! By this I look for closes on a certain channel. For example below my favorite is Middle Kelt. Below I detail each time frame.
Chart 1. 4 Hour
- Held middle kelt then bounced off it. Here I seek next target upper kelt.
Chart 2. Daily
- Bigger time frame. closed right at middle kelt. look for middle kelt to form support.
Chart 3. Weekly
- middle kelt acted as support . target weekly upper kelt.
If this has helped you’ll donations are welcome or even better share this blog 🙂
What is the Candle Combo?
Created by me ThetradingNinja, I developed this pattern when I started to see it often on specific time frames frequently. Its a continuation setup that consists of “Two candles” with the combination of the Middle Keltner Channel.
Picture 1. $SPX 4hr Chart:
This is an actual chart used in chat as our trade signal to go long $SPX with calls.
When does it occur?
This candle setup usually occurs after a downtrend or can be spotted in an uptrend. It happens either during or right before crossing the Middle Keltner channel.
Where can I spot it?
Mainly spotted on the 4 hour time frame. Also can be on shorter time frames like hourly and longer Daily and Weekly. Look for follow through.
Picture 2. $SPX 4hr Chart: 2/26
First let me start off by saying many traders have asked me NINJA you have some serious balls or are very patient. Or I need to be patient like you. I tell them im already out with profit I just leave one foot in the door just incase opportunity happens to represent itself again. This gives me the advantage to sell as close as I can to the top without the constant. FML I missed out on on a 10 bagger (1,000%).
Here’s a trading strategy that allowed me to be more profitable in any market conditions. This I developed over time going from trying the 50% rule (which made no sense until I saw I was barely locking in profit). Hopefully this helps Traders learn to take profits without having to question should they sell. Also can be applied to stock traders. Below I break it down for you .
The Break Down:
This is just an example. Amount shown is used for educational purposes. Apply it as you see fit.
$155 cash( amount using as example)…
- Buy 3 contracts @.45 + commission =$151.41
(If stock goes up 100% )
Reduce 75% of position( or more than half of position in this car 2/3)
- Sell 2 contracts @1.00(100%) =$195
(Now you’ve made back $151.41+profit locked in which now you are FREE riding with 1 contract )
“If” remaining 25% or 1 contract goes higher let’s say stock price jumps or runs higher now your premium is up another 1-200% of top of that. This is your opportunity to maximize profit.
Now option price goes to lets say 2.20×3.97
- “If” sell last 25% or 1 contract @2.97+ commission =$290
(75%)$195+(25%)$290-(initial investment)$151.41=Realized Profit(328.59)
*REMEMBER* Its not always about playing with big sizes. Keep your positions small and you will always be profitable.