Thursday, January 30, 2020

Jan 30 Trades

Jan 30 Trades

Today I closed two trades and both were winners. The first trade  was  SPX 7 DTE Call Credit Spread  and the second one was a SPY PUT trade both are based on back-testing and probabilities. In this post I will try to explain the strategies I used for these trades, which is different than the strategy that I use to share my trades on the free whatsapp group that I have which is open to anyone who would like to join.

Trade 1: 7 DTE SPX CCS

The SPX 7 DTE  CCS trade is based on a back-testing for the last 5 years that is based on  the Exponential moving average. The strategy is to open a 7 DTE  SPX Call Credit Spread trade if SPX close below the 8 EMA and the 8 EMA is above the 21 EMA and SPX close above the 21 EMA. The back-test is sequential so we open a new 7 DTE trade the next trading day when the last one is closed on Monday, or Wednesday or Friday. The back-test takes profit at 50% and stop loss of 370%. This condition for the last 5 years showed 81% win rate with 32 trades taken, 26 trades were winners. 

Below backtest results 

On Monday January 29, SPX crossed down the 8 EMA while the 8 EMA is above the 21 and SPX closed above the 21 EMA. so we entered a 7 DTE call credit spread and we collected 1.75 for it.

Today January 30 SPX gaped down and at the open and around 11 am our profit target of 50% was met and we closed the trade at 0.85. I sent out an alert on the whatsapp group and we closed the trade at 0.85 and collected $90 per contract.

Trade 2: SPY BUY PUT Intraday

This Strategy is based on the mobo bands that is a study built in TOS. The Study in TOS is called FW_MOBO_Basic. These bands are nothing but modified bollinger bands with 10 moving average in the center and 0.8 standard deviation but TOS show them in a nice way where when the price of the ticker close below the bands the color shift to red, and when the ticker's price close above the bands the color shift to green. The way I trade this is I look at the daily chart of SPY and I trade the 2 hour candle with the direction of the daily candles. So for example today the daily chart for SPY on the mobo bands is bearish (red) as you can see in the image below that the daily chart shifted bearish on Monday Jan 27 and then I go and look at the 2 hour chart and trade it only when the mobo bands shift bearish. 

The 2 hour chart looks like this

As you can see on the 2 hour chart SPY shifted bearish (red) this morning but I wait until the 2 hour candle is formed for confirmation. As soon as the 2 hour candle formed under the bands around 1030am I bought SPY PUT with strike 324 ATM. On this trade I look for a quick momentum breakout (MOBO) and I collect 10% on the trade and if the 2 hour candle shifted bullish (Green) I will exit out of the trade for a loss. 

Luckily at around 11:41 am our target of 10% was achieved and I was able to close the trade with $36 profit per contract. 

Total Profit for Jan 30 2020 profits:

Trade 1: $90
Trade 2: $36

Total: $126 per contract.

Hope this blog helps you find profitable strategies and in case you want to follow my trades please join the whatsapp group