Sunday, March 8, 2020

March 6 2020 Trades

Today I closed 5 trades and all were spx 0 DTE (zero days to expiration) trades. One SPX 0 DTE trade was based on the modified bollinger bands strategy  on 5 min candles and Two trades on spx 0 DTE were based on std deviation channels and two MCD trades  that were based on backtesting over the last 3 years. In this post I will try to explain the strategy used for these trades, and the same 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: SPX 0 DTE trade

In short for the modified bollinger bands strategy, I scan spx on a 5 min candles for 5 closes below or above a modified bollinger band of standard deviation of 0.382 a well as the 50 SMA. 

At 1:14 pm central time, SPX 5 min candles came up on my chart by showing 5 closes on the 5 min candles below the modified bollinger bands and 50 sma. 

So I placed the trigger below the lowerst of these candles and at 1:19pm central time the trigger triggered so I entered a call credit spread  and I sent out an alert on the whatsapp group.

On these kind of trades on the 0 DTE spx trades I like to take profits at 50% and go on to the next trade so when we entered we collected 0.95 on the CCS and I set a GTC order at 0.45 with our stop loss being three times the credit received so in this case 2.85.

Around 1:50pm SPX  went down in price and our profit target was hit and I closed the trade for a profit. Just sticking to the strategy and the trading plan since no one knows what spx would do and I am glad I did close it because we all know the end of day on friday the rally SPX had and my trade would be a total looser. Another reason why I close at 50% profit and move on rather than let it expire worthless even if it happens once every now and then. 

Trade 2 and 3 SPX 0 DTE:

On these Trades I look at the standard deviation channels that are built in TOS studies on 5 min candles and when the price action hits the 2 standard deviation I enter a contrarian trade after I get a reversal candle and close the trade at 50% profit and wait for the price action closely in case the standard deviation is hit again. Usually once I get a reversal candle and go on a contrarian trade I either close the trade at 50% profit or when the price hits the median line on the channel. 

So on Friday the 2 standard deviation line was  touched at around 11:08 am and at 11:10 am I saw a reversal candle and I opened a call credit spread 10-15 points away from the standard deviation and we collected on this trade 1.4 and my target was 50% profit and my stop loss is 3 times the credit received which was at 4.2. 

Around 12:02 pm the profit target was hit and I closed the trade for profit as well as sending an alert to the whatsapp group in case anyone was following my trades.  

After we closed and watching spx closely, the 2 standard deviation line was touched again at around 12:45pm and at 12:48 pm a reversal candle was confirmed so I opened a Call credit spread also 10-15 points away from the price with the same strategy of closing it at 50% profit or stop loss at 3 times the credit received. 

On this trade we collected 1.8 so my stop loss was full risk since the 3 times credit received is more than the full loss on the trade. 

Around 1:02 pm the profit target was hit and I closed the trade for a profit and sent an alert to the whatsapp group in case anyone was following my trades. 

Trade 4, 5 MCD:

This trade is based on backtesting when certain condition for MCD plays out in the market and these conditions are based on moving averages as well as the RSI levels. 

The backtest software that I use is edeltapro and below is the result when these conditions are met when no earnings for MCD is in the near future (14 days). It is a bearish trade and one can either buy a put or open a Call credit spread on MCD depending on ones buying power. Since the odds on this trade based on the backtest were 100% for the last 3 years, I decided to do both.

There is a technical trigger on MCD that in the backtest have good results when triggered. 

* The day that the stock crosses below the 200-day simple moving average (SMA) means that the stock has downward momentum and is in technical failure.

* Stock price is also below the 50-day SMA -- further evidence of a technical breakdown through the moving averages.

* RSI (using 20-days) is above 30, so the stock isn't over sold

Buy 40 delta put 14 days out or a CCS 70% OTM. 

GTC profit at 40% and Stop loss at 60% 

backtest shows 100% win as you can see below in the last 3 years, this strategy gave 7 trades and all were winners based on the conditions above.

The results below are for buying a put. 

The result below are for opening a Call Credit Spread:

Since the backtest software edeltapro is based on EOD prices, I usually tend to open these trades as close as I can to the EOD. So on March 5 after the triggers above true I confirmed at 245pm central time that they are still holding so I sent an alert to the whatsapp group about these trades and their high probabilities of winning. 

On March 6 at the open, both of these trades were closed for a profit and I also sent an alert to the whatsapp group in case anyone was following the trades. 


Total Profit for March 4 2020 profits:

Trade 1: $50
Trade 2: $70
Trade 3: $90
Trade 4: $35
Trade 5: $370

Total: $615 per contract.

Total March Trades Profit/Loss: $670 per contract.

Please note that I am sharing per contract and when I send my alert to the free whatsapp group I send 1 contract because each person has a different risk tolerance and for easy math for example if it is 30$ per contract then it is $300 per 10 contract. this way a small account user or a big account user can decide if they want to go with one or more than 1 contract. I usually trade sometimes 3 and sometimes 5 contracts but I like to share 1 in case there are people that have small accounts and want to grow it 1 contract at a time. 

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