WELCOME!!
Disclaimer: Any investment idea or strategy posted by any "Board Member" is not a recommendation to enter into the investment or any sort of guarantee that strategy may work, nor is he/she qualifed to give investment advice in any shape or form. This disclaimer generally goes for any poster on this message board unless they explicitly disclose otherwise.
Option and Stock Trading with sdh
Thanks for visiting my board. The primary focus of this board is for discussion of stock, option, or ETF plays. We look for breakout/breakdown setups which allows us to play them intraday, daily and weekly time after time. We are looking for technical indicators that tell us when to enter and exit these plays. The plays should have good liquidity to allow easy enteries and exits.
We are also interested in any plays that have news, earnings or have other catalyst events that make them attractive plays.
What we are not interested in:
- Any posts on OTC/Pink stocks will be removed.
- Bragging about trades you made or are currently in is totally unacceptable. We're happy you're making money but really we don't give a shit.
- If you come to this board to promote yourself, your website, or whatever it is you're doing, then sdh will give you a swift boot and delete your posts. Again, we just don't give a shit.
Finally, we appreciate visitors and members who are willing to put technical information at the top of their list when sharing trades with others. The goal is to help new and experienced traders find solid, consistent, good returns plays and technical information to help them enter/exit those plays. Please take a look around and enjoy!
Daily Options Traders:
Board Favorites:
AAPL
AMZN
BIDU
FAS
GMCR
GOOG
LNKD
NFLX
PCLN
Options Screeners, Leads & Tools:
Unusual call/put volume: http://www.schaeffersresearch.com/streetools/filters/volume_exp.aspx
Half Hour High Volume Report: http://www.cboe.com/data/HHVolumeReportEquity.aspx
Earning Calander: http://www.earningswhispers.com
High Short Float Stocks Sreener: http://finviz.com/screener.ashx?v=131&f=ind_stocksonly,sh_avgvol_o500,sh_price_o10,sh_short_o30&ft=4&o=-shortinterestshare
Option Screener: http://finance.avafin.com/options
Option Calculator: http://www.cboe.com/framed/IVolframed.aspx?content=http%3a%2f%2fcboe.ivolatility.com%2fcalc%2findex.j%3fcontract%3dE28820B4-0B9C-45FB-B060-F955A530518C§ionName=SEC_TRADING_TOOLS&title=CBOE%20-%20IVolatility%20Services
The Smart Trader - Charts and Info: http://t.co/l8pOIeyj
Assessing premium risk versus reward
Premium risk on a high priced option can take profits away from you if an expected large movement in the stock is priced in. When price doesn't move enough, share price can go up but opton price can go down. A quick formula to assess premium risk is:
Premium = Option Price + Strike Price - Share Price
This should be less than the expected movement in share price during the options time fame.
ETF Exchange Traded Funds
Exchange traded funds are a great way to start understanding the value of options without having to play them and is a great way to leverage any non-option trading account. These funds will allow you to work on your timing from the bulls markets to bears bear markets and back again and also allow you to be actively trading when the market is a bear run. These ETF will also allow you to play some of the major sectors that tend to cycle up and down with event like oil, financial, gold and silver to name a view. With the way they are setup if a sector moves up 1% a 2x will move 2% and a 3x will move 3%. Let say oil has a bull move of 5% then the bull 2x oil ETF 2 would move apporxamatly 10% and the bull oil 3x would move 15%. Now the inverse move would happen on the bear oil funds. The oil bear 2x would be down 10% and the 3x would be down .
Like any investment please take the time to understand them and their powers. Charting will be very important in making sure you are on the side of the during a bull or bear fund. Take the time to watch them or paper trade them to help you get a better understanding of how they work and the risk/rewards they can have.
To know more about ETF's check the ETF link below and for more information on each individual please use your search engines to find out more about them and what they are based on.
ETF: http://en.wikipedia.org/wiki/Exchange-traded_fund
Other ETF funds: http://3xetf.com/
Market ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| SPY | BGU | BGZ | 3X | Low |
| SPY | TNA | TZA | 3X | High |
Energy ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| XLE | ERX | ERY | 3X | Low |
Financials ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $XFI | FAS | FAZ | 3X | YES |
Gold ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| GLD | UGLD | DGLD | 3X | N/A |
| $GOLD | DGP | DGZ | 2X | Low |
Gold Miners ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $GDM | NUGT | DUST | 3X | Low |
Housing ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $RMG | DRN | DRV | 3X | Low |
Natural Gas ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $XNG | GASL | GASX | 3X | Low |
Oil ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $XOI | UCO | SCO | 2X | Low |
Silver ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| $SILVER | AGQ | ZSL | 2X | LOW |
| $SILVER | USLV | DSLV | 3X | N/A |
Tech's ETF | Index Charts | Bull Funds (Up Trends) | Bear Funds (Down Trends) | ETF Ratio | Options Available |
| XLK | TYH | TYP | 3X | Low |
Trading w/Technicals (Some setups based on technical analysis used by board members) Generally the idea is to use a sound chart setup to enter into a leveraged position using options or an ETF. Time frame matters:
1. Use a 10 min timeframe or less for intraday trading (weekly options.)
2. 60 min for multiday hold
3. daily chart for positions lasting a few days to a week or more (monthly options.)
This in not intended to a detailed discussion on technical analysis, but some setups use susscessful by traders on this board are discussed below:
Inflection Pattern Intraday Trading
The inflection is a general candle pattern where for a top the high of the middle candle is higher than the highs of the adjacent candles and the low of the middle candle is higher than the lows of the two adjancent candles. Visa versa for a bottom. You can extend to 4 candles, but that might be dangerous and lead to subjectivity. There is a decent probability this marks a turn according to Cycle News and Views. While you can trade both ways during a run, it makes sense to stick with uppers during an up trend and downers during a down trend (In the example below may be wise to skip the one downer signal.)
With day trading, it's a good idea to have a tight stop, but a mental stop, e.g., you need to watch and not show the market with a stop order. If the inflection is compramised, a good indication that the inflection was not true you and you should stop out (along with any other preferences one might have for a stop loss.) This comes from Perfect Stock Alert (no longer out there so perhaps no so perfect...) They like to add a penny or two to the stop.
Putting these two together is my bread and butter SPY intraday trade. Suppose you can apply this to any stock to trade options, but I believe it works best with the SPY and QQQ.
I generally like to play this using a 15 minute chart. Occasionaly play it on a 5 minute chart, but the extra noise tends to whip you out and produces excessive inflection patterns, and ultimately has produced mixed results.
Taking profits is always a tricky situation and it's good to set targets. Basically I like to let things run while on the right side of a fast EMA (10 or even a little faster.) Also, identifying lines of support or resistance and current channels are good places to take profits as the bouces there can be fast and furious. But then again it may a good idea to wait a candle or two and see if she can go some more. Using the fast EMA of your choice may be good for this purpose.
Trend Reversal Candlestick Patterns Engulfing Pattern: A reversal pattern that can be bearish or bullish, depending upon whether it appears at the end of an uptrend (bearish engulfing pattern) or a downtrend (bullish engulfing pattern). The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body.
Evening Star: A bearish reversal pattern that continues an uptrend with a long white body day followed by a gapped up small body day, then a down close with the close below the midpoint of the first day
Morning Star: A three day bullish reversal pattern consisting of three candlesticks - a long-bodied black candle extending the current downtrend, a short middle candle that gapped down on the open, and a long-bodied white candle that gapped up on the open and closed above the midpoint of the body of the first day.
Adam and Eve Chart Pattern
It has a very sharp and deep first bottom on high volume (Adam) forms a V pattern. Then the stock bounces high into the center and develops a longer and more gentle, rolling second bottom (Eve) on relatively low volatility. Price action then constricts into a tight range and the stock breaks strongly to the upside. As seen on the chart this pattern can work in the inverse direction. For more information please read the book Master Swing Trader by Alan S. Farley.
Bollinger Band/RSI Extreme
Etreme oversold or overbought stituations are an area swing traders look for action, but can be dangerous as many times stocks keep running. When the BB is in an extreme (greater than the 2 standard deviation, of even 2.5 or 3 standard deviation for an even more extreme situation), and the RSI is over 70, then the odds for a reversal may increase:
Note, is the example above, there was a long wick on the big candle up. Also, the following candle failed to make a new high, but traded in the upper half of the previous candle. These are also good conditions for a possible reversal.
ADX/MACD PINCH PLAYS
Adam and Eve Chart Pattern
3-Minute MACD Chart play:
This play uses a basic MACD indicator to enter/exit the trade. You want to see volume and option movement. You can begin watching the play on a 1-minute chart and move to the 3-minute for confirmation.
Learning Options Trading Links
Options Basic 101
Lesson 1: http://www.youtube.com/watch?v=is5Whul7KUg&feature=related
Lesson 2 : http://www.youtube.com/watch?v=KSgmKpO9g54&feature=related
Lesson 3: http://www.youtube.com/watch?v=3UEDnTzhT5U
Lesson 4: http://www.youtube.com/watch?v=Xm_71C_Jpcc
Lesson 5: http://www.youtube.com/watch?v=EyUcGpMf264&feature=related
Lesson 6: http://www.youtube.com/watch?v=X30liTarSwk&feature=related
Lesson 7: http://www.youtube.com/watch?v=n4uqBy9i0Ds&feature=related
Spreads: http://www.youtube.com/watch?v=mFUfxGv2wC0&feature=related
Disclaimer: Any investment idea or strategy posted by any "Board Moderators" is not a recommendation to enter into the investment or any sort of guarantee that strategy may work, nor is he/she qualifed to give investment advice in any shape or form. This disclaimer generally goes for any poster on this message board unless they explicitly disclose otherwise.