step-by-step tutorial
CREATE A WATCHLIST
I use Trading View and mobile Think or Swim.
Create a Watchlist. I use my faves from S&P500. Look for highly liquid options for favorable bid-ask spreads (prices) ===>
TIP:
I also use InsiderFinance's Top Tickers for great trade ideas! Click HERE to learn more about trading alongside the "Smart Money"!
MARK PREMARKET LEVELS
Thirty minutes prior to market open, mark the pre-market high and lows on an hourly chart.
TIP:
Mark the tails, not just the bodies. These levels will serve as support and resistance levels, and we will be trading breakouts and breakdowns of these levels on lower time frames like the 5- or 15-minute time frames.
TRADE THE BREAKOUT
On a 5-minute time frame, wait for a full candle to close outside of your marked level.
TIP: In this example, we see a break of support.
I wait for a full 5-minute candle to close below my support level. If you don't wait for the full candle to close, you sometimes get a false signal.
Expect a retest. But stop out on a 5-minute candle closing on the other side of your line.
SCALE OR CLOSE OUT QUICKLY
For options, I trade multiple contracts (1-50). This way, I can scale out with profits. I typically close 90% of the position at 20% profit, then leave 10% of the position as a runner, with profits sometimes hitting 50->100%.
For small accounts, close out the ENTIRE position at 10-20% profit. Be sure to use risk management (small size, small dollar risk).
ENTRY AND EXIT HAND-HOLDING
A great way to avoid giving your profits back to the market is to use algorithmic technical indicators.
TIP:
I use InsiderFinance's proprietary technical indicators for amazing entries and exits. Click HERE to learn more (takes you to my blog on Medium.com on how to use the indicator)
Many of these "Trader's Toolbox" indicators work for more than just stocks:
They can also work for:
- Futures
- Index
- Commodities
- Forex
- Crypto
TIP:
Try using the InsiderFinance tools for better entries on your long term portfolios and dividend stocks!