TRADING SYSTEM SIGNAL - OPEN DEC POSITION
Our "window of opportunity" is beginning to open up and it's time to initiate our December position. The Market tried to correct in early November but didn't get very far before the buyers swarmed back in. So we enter our December position with the risk of a major correction still hanging over us. However, markets consolidate through time by moving sideways or through price by pulling back. At this point there is no way of knowing which route this market will take. So like good soldiers we trade on. We want to continue our hit-and-run Guerrilla Trading tactics as the VIX (volatility) is still a little too high for comfort. That makes Calendars and Butterflys ideal for this environment.
We are in a Market Structure Stage 3 with a slight uptrend bias on the Daily Chart, and a Stage 3 consolidation occurring on the 30m Chart. This month we'll start trading with multiple contracts to accommodate more hedging and adjusting possibilities. So we'll set up shop with a Calendar Spread at the 111 strike:
Calendar Spread:
Open - 6 Jan/Dec 111 SPY Call Calendars at about $0.98 each
Hedge the Calendars:
Open - 1 Dec 105 Put at about $0.96
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- TheOptionMentor
- My B.A. Degree is from the University of Arkansas. I've been trading since 2002 and teaching options trading since 2006. Learn to trade Option Income Spreads like a Pro! Email optionmentor@gmail.com for more about The Option Mentor Program.
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Trading the Market Structure
Trades are set up using the "Trading the Market Structure" method. It is derived by taking the most common trading methods, Delta Neutral Trading, Swing Trading, and Trend Trading, and combining them into one system. By combining them in this fashion they offset each other's weaknesses, thus creating an unusually effective strategy.
To begin to understand the simple technicals behind this Trading System set up your Weekly, Daily, 30 minute, and 10 minute charts with these links:
Market Structure/Entry Points/ Weekly Chart/ Daily Chart/ 30m Chart/ 10m Chart
To begin to understand the simple technicals behind this Trading System set up your Weekly, Daily, 30 minute, and 10 minute charts with these links:
Market Structure/Entry Points/ Weekly Chart/ Daily Chart/ 30m Chart/ 10m Chart
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