Our Trading System In A Nutshell
See GLD chart below
Blue Line Trading System - Our options trading system, based on the principles underlying Elliott Wave Theory, in a nutshell.
Pick a time frame, Daily, Weekly Hourly - it really doesn't matter. On a bar, candle or close line price chart, draw parallel trend channels to contain and label legs up or down, seeking a completed even numbered wave. When price breaks out of that channel, assume an odd numbered wave has begun, then pick an expiration month and ATM or OTM strike price that would maximize return for that forecasted leg. Manage the trade with logical money management, i.e., that lets profits run and cuts losses short, being especailly attentive to avoiding risk of ruin.
We have a few simple money management rules* that achieves those goals:
(1) Cut losses @ 50%, no exceptions;
(2) At +50% profit, move that hard stop to break-even;
(3) At +100% profit, trigger a trailing stop @ 50% from, best unrealized return and if hit; exit at least half of position, trying to keep something on for expiration, just in case.
*These are my rules, experience breeds self-knowledge and improved trading skill, so once comfortable with options and personal risk profiles, feel free to substitute your own percentage levels for these trade management actions to kick in.
GLD Buy Signals
Open GLD trades: PRO Service (Mar 13) and Premium Service (Feb 5). Before current month expiration, Apr 17th (Thursday) a decision will be made whether to rollover to new strikes/expirations on current profitable positions.