To enter a long stock trade, I look for Chaikin signals, on Very Bullish rated stocks. I prefer Money Flow Buys and Relative Strength buys, the only signal I tend to avoid is Momentum Breakouts, as the move has typically already happened. In addition to Chaikin Signals, I look for a few additional technicals - decent volume ( 100K + shares traded per day) positive money flow and the 10 day SMA above the 40 day SMA . I will not initiate any new positions within 30 days of earnings announcements.
I will set a 20% trailing stop from the point of entry. A 20% stop should give stocks enough room to move without stopping out prematurely, while at the same time defining my risk in each position. I will close any position, where the power gauge rating changes to Bearish or Very Bearish.
I will also trade some option strategies, including Bear Call Spreads, Bull Put Spreads and Diagonals. All of these Options strategies are covered and allowed in IRA accounts.
Underlying's on Bull Put Spreads must be bullish or Very Bullish, Positive Money Flow, above a 200 day moving average, and trending up without earnings in the next 30 days.
Underlying's on Bear Call Spreads must meet similar criteria. Bearish or Very Bearish, declining 200 day moving average, flat to negative money flow and without earnings in the next 30 days.
In order to enter any credit spread, return on risk must be greater than the probabilities of success,
I will hold credit spreads until 50%-75% of max gain achieved or until the spread loses 3x's credit received.
On rare occasion I will purchase Long option premium on stocks with low implied volatility.
On those rare occasions, I'll hold long options until I reach 50% max gain or option value is drops to 30% of purchase price or 7 - 10 days prior to expiration.
There's a brief explanation of the rules I use to find, enter and exit long stock and simple options spreads.
Please feel free to comment below, i would love to hear from you.
Happy Trading!
I will set a 20% trailing stop from the point of entry. A 20% stop should give stocks enough room to move without stopping out prematurely, while at the same time defining my risk in each position. I will close any position, where the power gauge rating changes to Bearish or Very Bearish.
I will also trade some option strategies, including Bear Call Spreads, Bull Put Spreads and Diagonals. All of these Options strategies are covered and allowed in IRA accounts.
Underlying's on Bull Put Spreads must be bullish or Very Bullish, Positive Money Flow, above a 200 day moving average, and trending up without earnings in the next 30 days.
Underlying's on Bear Call Spreads must meet similar criteria. Bearish or Very Bearish, declining 200 day moving average, flat to negative money flow and without earnings in the next 30 days.
In order to enter any credit spread, return on risk must be greater than the probabilities of success,
I will hold credit spreads until 50%-75% of max gain achieved or until the spread loses 3x's credit received.
On rare occasion I will purchase Long option premium on stocks with low implied volatility.
On those rare occasions, I'll hold long options until I reach 50% max gain or option value is drops to 30% of purchase price or 7 - 10 days prior to expiration.
There's a brief explanation of the rules I use to find, enter and exit long stock and simple options spreads.
Please feel free to comment below, i would love to hear from you.
Happy Trading!
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