AlphaTrend Option Trade
Hello good people,
Several have asked for an option buying "system" similar to the CPR selling system I previously coded. This is a work in progress, but thought I would share in order to get some feedback.
I have been working through different setups and believe I have landed on a decent system, using the AlphaTrend indicator created byKivancOzbilgic.
I've tested with 4 real trades, so obviously needs a lot more testing, but the results have been favorable. The key for me, on option buying, is to get in and out quickly, or to be riding "neutral" with no loss possible as quickly as possible. I accomplish this by buying 4 options OTM around 30 days out in relation to expiry dates, and selling out 3 once it makes up for the full cost of the 4 options, letting the 1 ride, or at least ride until it is hefty profit.
In any case, here are the details of the modifications to the AT indicator:
"Buy" and "Sell" signals are now charted as "Call" and "Put" signals,
When the AT indicator finishes a bar with a "Call" or "Put" signal, a label will appear when the next bar opens, showing the strike price to buy. A purple line will represent that strike price target, and a red line will represent a possible price indicating to cut losses (stop loss).
The results table will show the historical win/loss percentage, and most importantly for me, the average number of bars in those trades. As I stated, I want to get in and out, as quickly as possible. When a trade goes much longer than a "short" average, i.e < 5 days, then a buy will become unprofitable due to time decay.
As stated, I'm early in this for real trades, so I'm not sure if it is a truly workable system, and maybe, am just getting lucky.
Good luck, and happy trading,
Deuce
Several have asked for an option buying "system" similar to the CPR selling system I previously coded. This is a work in progress, but thought I would share in order to get some feedback.
I have been working through different setups and believe I have landed on a decent system, using the AlphaTrend indicator created byKivancOzbilgic.
I've tested with 4 real trades, so obviously needs a lot more testing, but the results have been favorable. The key for me, on option buying, is to get in and out quickly, or to be riding "neutral" with no loss possible as quickly as possible. I accomplish this by buying 4 options OTM around 30 days out in relation to expiry dates, and selling out 3 once it makes up for the full cost of the 4 options, letting the 1 ride, or at least ride until it is hefty profit.
In any case, here are the details of the modifications to the AT indicator:
"Buy" and "Sell" signals are now charted as "Call" and "Put" signals,
When the AT indicator finishes a bar with a "Call" or "Put" signal, a label will appear when the next bar opens, showing the strike price to buy. A purple line will represent that strike price target, and a red line will represent a possible price indicating to cut losses (stop loss).
The results table will show the historical win/loss percentage, and most importantly for me, the average number of bars in those trades. As I stated, I want to get in and out, as quickly as possible. When a trade goes much longer than a "short" average, i.e < 5 days, then a buy will become unprofitable due to time decay.
As stated, I'm early in this for real trades, so I'm not sure if it is a truly workable system, and maybe, am just getting lucky.
Good luck, and happy trading,
Deuce
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