|
|
|
|
|
|
|
|
|
|
|
|
|
|
Strategy Checklist: |
|
|
|
Deciding trend (up/down/sideways) of
a stock |
|
|
|
1 |
What direction is the main market
going? |
|
|
2 |
What direction are sector related
stocks going? |
|
|
3 |
What are the longer term charts
(weekly charts) showing? |
|
|
4 |
What are the major, medium term,
short term trends (up/down/sideways)? |
|
|
5 |
Where are the support and resistance
levels (use amongst others SR indicator)? |
|
|
6 |
Is the stock volume supporting the
price action? |
|
|
7 |
Is the option volume & open
interest supporting the price action? |
|
|
8 |
In which direction are the moving
averages pointing? |
|
|
9 |
Are the technical indicators in
oversold/overbought levels? |
|
|
10 |
Are the option (contrary) indicators
and their percentiles showing extreme values? |
|
|
11 |
Are there divergences apparent in
the oscillators (option & technical)? |
|
|
12 |
What are the Fibonacci retracements
or projections? |
|
|
|
Is the Implied Volatility high or
low or neutral? |
|
|
|
|
|
1 |
Is the Historical volatility
higher/lower than the Implied Volatility? |
|
|
2 |
What is the short term trend of the
Historical & Implied Volatility? |
|
|
3 |
How stable does the Historical &
Implied Volatility tend to be? |
|
|
4 |
Do the longer tem Historical &
Implied Volatilities confirm this? |
|
|
5 |
Does the 20HV/IV Percentile
indicator confirm this? |
|
|
6 |
What time frame do I want my option
strategy to take? |
|
|
|
Once
stock direction (Bullish/Bearish/Neutral) and Implied Volatility
(High/Low/Neutral) has been determined |
|
|
Deciding which option strategy to
use? |
|
|
|
1 |
Check the Option Strategy Table to
see which strategies are applicable |
|
|
2 |
Does the option strategy fit into my
time frame? |
|
|
3 |
Is my stock liquid enough to warrant
my particular strategy? |
|
|
4 |
Is there enough Open Interest to
support my selling of options? |
|
|
5 |
Is there enough Volume/Open Interest
when I want to close down my strategy? |
|
|
6 |
How much money am I willing to risk? |
|
|
7 |
Do I have enough money/margin to
cover this strategy? |
|
|
8 |
What is my profit objective? |
|
|
9 |
Do the strike price's in my strategy
match up with support/resistance points? |
|
|
10 |
Does my strategy confirm what the
option writer Dream Chart is showing (short term strategies only)? |
|
11 |
At which price (stock or option)
will I abandon my strategy (trade)? |
|
|
|
This
checklist is meant to be used as a guide before placing any trades. It is
meant to help you |
|
|
make an informed, disciplined trade
by trying to eliminate emotions out of the trade and prepare you for |
|
|
all outcomes and make sure you have
a plan of action for all outcomes, successful or unsuccessfull. |
|
|
It might be handy to print this
page, so you can use it when you want check a new option strategy/combination |
|
|
. |
|
|
|
|
|
|
|
|
|
|
|
|
|