Trading Guidelines and Suggestions


  1. Trade suggestions focus primarily on stock options, stock index options and options on exchange traded funds (ETF’s)
  2. Bullish (long) option trading strategies – buying calls, selling puts or other bullish plays
  3. Bearish (short) option trading strategies – buying puts, selling calls, or other bearish plays
  4. Trading time horizon is short-to-medium term, generally considered to be from approximately one to six weeks in length
  5. Selections are designed to be low risk trades with high profit potential and a defined target price
  6. Technical analysis is used to suggest a specific trade entry price and when to exit the position


THE CHART (see chart example down below)

The illustration is usually a candlestick stock chart with the graphics

  • 14-day Relative Strength Indicator (RSI) – at the top of the chart
  • Closing Price (Hourly, Daily, or Weekly)
  • 14-day Exponential Moving Average (EMA) – blue horizontal line
  • 50-day Simple Moving Average – MA(50) red horizontal line
  • 200-day Simple Moving Average – MA(200) green horizontal line
  • 20-day upper Bollinger Band (BB) level – upper solid purple line
  • 20-day Simple Moving Average – purple dotted line in the middle
  • 20-day lower Bollinger Band (BB) level – lower solid purple line

SPY Chart Sample