The reasons are varied, but generally this is because there is very little in the way of corporate earnings releases, and very few surprises coming out of Washington.
Best directional SPY options trading strategy | Elite Trader
And no news out of DC is great news for Wall Street. SPY chart from last week in detail, and see where we ended up through June This daily chart of the SPY tells me that in the last few months we have had a few pullbacks in the SPY. Basically what we are doing is looking to catch a falling stock before it rebounds….
In both May and June, we had this occurrence result in higher prices, but you have to act fast with a swing trade. Trading swing patterns in individual stocks is risky business, but with ETFs like the SPY you have diversity on your side. That is my buy signal. So how good is the track record on catching a falling ETF like the SPY? Also, there is a lot more to these gains based on various exits to this method. Take a look at the most recent day low that occurred last week in the SPY, and how using options got you in and out for a huge gain.
As you can see above, on June 8th the SPY hit a day low.
Keep in mind we are forced to exit this trade quickly because there are only four days June on this option. Now look at the following graph that shows the trade in a fast-forward by two days, and look at the return that we get. So options not only play a role in lowering cost and risk, but when used properly, they also offer an exit strategy by forcing us to make quick decisions, and at the same time, keep within our trading plans when it comes to entry and exit timeframes.
I studied swing trades some time ago and I most probably would have missed this one. However, and just for clarification if you please Sir. Are you saying that this swing move is one of your trade selection identifiers or recommendation for an actual trade?
Hello, Tom, thank you for all the wonderful recommendations.
But my problem is I can not trade strangle option in Scottrade. I have searched around and still not found any good place. Would you tell me which where or how to find a firm who allow trading strangle options? Email will not be published Required.
Home Archives Special Reports About FAQ Publications Contact. Power Profit Trades Tom Gentile's twice weekly free newsletter Power Profit Trades.
Our Trading Strategy
Click here for this special report. Navigate Back to top Next article Previous article.
Crushing Options Swing Trades - Warrior Trading
Basically what we are doing is looking to catch a falling stock before it rebounds… And I look at pullbacks into day lows as possible entry points. So What Am I Doing? As you can see, since there have been trades taken off day lows, of which were winners and 28 were losers.
How can it be that a system this easy has such a winning track record? I have one below that I want to share with you. Until next time, Tom Gentile Americas 1 Trader.
Option Trading Tips
Dennis Wilson June 19, at June 19, at Sarah He June 23, at 6: June 23, at 6: Georgi September 29, at September 29, at Click here to visit Tom's Facebook page Follow Tom on Twitter PowerProfTrades! Three Reasons Why You Shouldn't Buy Michael Kors KORS What You Can Expect from Bank Earnings After Trump's Inauguration Your Post-Election Financial Questions… Answered.