Dave Taylor
Rex kwan Do
As some of you know my passion is day trading. I completely understand that 90% or more fail at this but I also realize that the few who succeed generally succeed big. I am nearing the few, but it's been a long and painful road. I believe that90% fail because they "gamble". I'm guilty of it. I've had a couple options trades that brought in $15k in a day all while giving it back on another trade because I got greedy. I've blown accounts, lost money, made money but I will never give up. I'll analyze below but I basically only trade options ODTE on indices and weeklies stocks. I also trade futures. Before I go any further, trading is risky, use your own judgement. At the same time it can be very rewarding. I'm sure some financial guys will chime in here and they aren't wrong but there is also a reason they are still working. I'd like to be part of the few that do it well enough that I do not have to work. I also understand this may never happen but to be content at a 9-5 job will never be me.
Here's what I have learned. You can make tons of money via SPX, SPY, QQQ etc if you realize that generally the markets are designed to go up. I've learned that if we are in an uptrend overall(like the current state) you can simply buy when a major support breaks down and then recovers. Example, SPX breaks below 5800 support and hits 5750. It may sit here a day. or two but once it recovers 5800 you can generally expect it to retrace higher, most likely all time highs. Shorting indices is fine intraday and very rewarding when it works but very difficult to do on a longer term basis as SPX is designed to go up. The reason shorting works so well when you do hit is the premiums are generally very low on put options when market is at ATH.
Futures trading can be very rewarding with the false breakdown that I mentioned above but you need to understand 2 things. Futures are the easiest way to get over leveraged and blow your account so account size and # of contracts is very important. With SPX trading level to level(typically 5-30 pts/level) you need to run your stops big enough to go the opposite direction and test a previous level without getting stopped. Using micro size contracts can help with this but I typically won't trade futures with anything less than a $10k account. The more contracts you add the more day margin you need so the more contracts you add the closer you get to having your account liquidated. Use caution.
What has worked best for me is trading 1 day out index options and weekly(1-3 weeks out) stock options. I have a futures account that I only trade in on more calculated days when we reclaim a lost support. Stock options I trade two ways. Either buy them when you feel a multi day/week trend is coming via 2-3 week OTM calls/puts or trade thurs/fri when weeklies expire with small "lose it all" amounts as typically Friday is a hero or zero trade. TSLA has had 2 great Friday trades off there hourly 8ema in the last 4 weeks and seeing returns of 400-1700% is very rewarding and only takes 1 or 2 contracts to see a big return. 11/22 350 calls I bought at 1.20 and saw a high of 7.75 an hour or two later. I only bought one but $120 risk for $500+ return is pretty good and it's not gambling completely if you can understand how a stock reacts off certain levels. 11/8 TSLA 3/10s also rewarded nicely. I used the 8ema once again on a Friday and bought two 310 calls at $.48 each for $96 total investment. I expected a retest of the previous hourly candle (310 area and stock opened at $296 area. I took one off the table at $1.80(almost 300% return ) and let the other run until the stock hit 310. This actually ended up giving me $600 on one contract. Little did I know that TSLA would later hit $328 that day and had I held each contract would have been worth over $2k at some point. But it's Friday and you need to let it be a lotto or manage risk.
I typically like to screen for stocks using finviz.com. I use about 10-15 parameters to find trend, strength and volume. 1: 200SMA above, 2: 50SMA above, 3: 20 SMA above, 4: avg volume over $500k 6: relative volume over 1 7: current volume over 1 million 8: market cap "mid cap+" 9: price "over $20" 10: change "up" 11: option/short "optional". I like to confirm what I want to trade with the 8ema being above the 21ema(I do this in the Webull and TOS desktop apps). Buying my positions typically when the hourly as above the 8ema but a very small candle just above.
Disclaimer: I understand this could have been a reddit post. I also understand there are many haters on here. I also understand that many people are willing to learn, try different things and grind through adversity to become better at something. Cyclists are a great example of this. Please feel free to share, hate, learn, disagree with etc.
Here's what I have learned. You can make tons of money via SPX, SPY, QQQ etc if you realize that generally the markets are designed to go up. I've learned that if we are in an uptrend overall(like the current state) you can simply buy when a major support breaks down and then recovers. Example, SPX breaks below 5800 support and hits 5750. It may sit here a day. or two but once it recovers 5800 you can generally expect it to retrace higher, most likely all time highs. Shorting indices is fine intraday and very rewarding when it works but very difficult to do on a longer term basis as SPX is designed to go up. The reason shorting works so well when you do hit is the premiums are generally very low on put options when market is at ATH.
Futures trading can be very rewarding with the false breakdown that I mentioned above but you need to understand 2 things. Futures are the easiest way to get over leveraged and blow your account so account size and # of contracts is very important. With SPX trading level to level(typically 5-30 pts/level) you need to run your stops big enough to go the opposite direction and test a previous level without getting stopped. Using micro size contracts can help with this but I typically won't trade futures with anything less than a $10k account. The more contracts you add the more day margin you need so the more contracts you add the closer you get to having your account liquidated. Use caution.
What has worked best for me is trading 1 day out index options and weekly(1-3 weeks out) stock options. I have a futures account that I only trade in on more calculated days when we reclaim a lost support. Stock options I trade two ways. Either buy them when you feel a multi day/week trend is coming via 2-3 week OTM calls/puts or trade thurs/fri when weeklies expire with small "lose it all" amounts as typically Friday is a hero or zero trade. TSLA has had 2 great Friday trades off there hourly 8ema in the last 4 weeks and seeing returns of 400-1700% is very rewarding and only takes 1 or 2 contracts to see a big return. 11/22 350 calls I bought at 1.20 and saw a high of 7.75 an hour or two later. I only bought one but $120 risk for $500+ return is pretty good and it's not gambling completely if you can understand how a stock reacts off certain levels. 11/8 TSLA 3/10s also rewarded nicely. I used the 8ema once again on a Friday and bought two 310 calls at $.48 each for $96 total investment. I expected a retest of the previous hourly candle (310 area and stock opened at $296 area. I took one off the table at $1.80(almost 300% return ) and let the other run until the stock hit 310. This actually ended up giving me $600 on one contract. Little did I know that TSLA would later hit $328 that day and had I held each contract would have been worth over $2k at some point. But it's Friday and you need to let it be a lotto or manage risk.
I typically like to screen for stocks using finviz.com. I use about 10-15 parameters to find trend, strength and volume. 1: 200SMA above, 2: 50SMA above, 3: 20 SMA above, 4: avg volume over $500k 6: relative volume over 1 7: current volume over 1 million 8: market cap "mid cap+" 9: price "over $20" 10: change "up" 11: option/short "optional". I like to confirm what I want to trade with the 8ema being above the 21ema(I do this in the Webull and TOS desktop apps). Buying my positions typically when the hourly as above the 8ema but a very small candle just above.
Disclaimer: I understand this could have been a reddit post. I also understand there are many haters on here. I also understand that many people are willing to learn, try different things and grind through adversity to become better at something. Cyclists are a great example of this. Please feel free to share, hate, learn, disagree with etc.
