L1: Understanding Options
L2: Price Action Basics
L3: Patterns
L4: EMAs & VWAP
L5: Supply & Demand
L6: LVL2 & Tape Reading W/ S&D
L7: Risk/Trade Management
L8: Psychology
I've Turned $10k into $200k+ in under 2 months daytrading.
Information you'll find in this thread is a gold mine.
Here is everything you need to know about trading 👇
L1: Understanding Options
L2: Price Action Basics
L3: Patterns
L4: EMAs & VWAP
L5: Supply & Demand
L6: LVL2 & Tape Reading W/ S&D
L7: Risk/Trade Management
L8: Psychology
In this lesson we will be going over..
- Options Basics
- Greeks
- IV
- How To Pick Contracts
Options are derivatives and there's 2 type..
Calls: Bullish Buyer - Bearish Seller
- We play this when we think the price will RISE 📈
Puts: Bearish Buyer - Bullish Seller
- We play this when we think price will FALL 📉
Buyers have to pay a premium for each contract.
Option contracts represent 100 shares of the underlying security.
Therefore the actual cost is 100x more than you see.
Ex.
.15 = $15
1.50 = $150
15.00 = $1,500
All options have an expiration date, which means they no longer exist or can be traded after they expire, unlike shares of stock which have no expiration date and can be held forever.
The further your expiration, the less volatile your contract will be.
An option can be converted to buy/sell shares of stock at the options strike price.
This is called exercising contracts. We DON'T do this.
CALLS
In: Strike price is below stock price
At: Strike price is at the stock price
Out: Strike price is above the stock price
PUTS
In: Strike price is above the stock price
At: Strike price is at the stock price
Out: Strike price is below the stock price
Delta measures change in option price when stock price moves.
Gamma measures change in change in delta when stock price moves.
Theta measures change in option price every day as the expiration gets closer.
Theta is VERY important.
IV is very confusing topic for new traders. Let's break it down.
IV can be interpreted as the market’s expected magnitude for a stock’s price changes in the future.
More buying pressure than selling pressure
= Increase in options prices
= Higher IV
More selling pressure than buying pressure
= Decrease in options prices
= Lower IV
-----
If the opposite occurs that’s an indication that they are NOT expecting volatility.
IV Rank simply tells us whether IV is high or LOW in the underlying based on the past year of IV data.
0% - IV is the lowest it's been over the past year
50% - IV is at the midpoint over the past year
100% - IV is at the highest over the past year
IV Percentile tells us how often the stock’s IV has been BELOW it’s current IV over the past year.
Example: An IV percentile of 85% means the stock’s IV has been below its current level of IV on 85% of days over the past year.
IV Crush is when options premium collapse due to a sudden decrease in IV. This tends to happen most often when playing EARNINGS.
Playing earnings is VERY dangerous and IV should ALWAYS be taken into consideration.
If you’re day trading you typically want to pick the closest expiration (after 0dte), if you’re swinging you want to pick the time frame you think your swing will last.
If you’re a beginner don’t play 0dte’s, thank me later.
You NEED contracts with volume.
Volume is what makes your contracts move, if you have little volume on your contracts, they’re not gonna move nicely.
Volume is also what’s going to help you enter & exit your position as quickly as possible.
You want to look for contracts with small bid/ask spreads.
This allows you to get in and out quicker + get in at a reasonable average.
Open interest shows the amount of OPEN contracts being held at a certain strike price.
It shows how much INTEREST is in the certain strike.
Open interest is a key indicator when it comes to swinging.
In this lesson we will be going over the basics of..
- Candlestick Anatomy
- Volume
- Trends
- Support & Resistance
Take a look at the image below & study it. It's self explanatory but just incase you need help.
For a bullish candle, the open is at the bottom of the body, and the close is at the top. Opposite for a bearish candle.
Volume simply represents the amount shares being traded in a specific time period. So if you're looking at the 1hr time frame and see 10m in volume that means there were 10 million shares bought/sold in 1hr.
There's 3 different stages a market can be in.
1. Uptrend: Market is making higher highs and higher lows.
2. Consolidation: Market is trading sideways.
3. Downtrend: Market is putting in lower highs and lower lows.
Let's go over an example of each one.
An uptrend is justified by higher highs and higher lows. In this example as you can see we're on the 1hr timeframe, and in this timeframe we're in an uptrend.
It's important to realize the market can be in different trends on different timeframes.
A consolidation also known as a balanced market is when both buyers and sellers are agreeing on a price, therefore price is not necessarily going up or down but instead sideways.
In this example price is trading sideways before it breaks to the upside.
A downtrend is the opposite of an uptrend, instead of the market putting in higher highs and higher lows it's putting in lower highs and lower lows, meaning sellers are in control.
In this example we see how price was in a downtrend, broke out and started an uptrend.
Let's talk about when market shifts in structure, meaning it's breaking it's current structure and shifting into a new one.
If we use the same example as before. You want to look for your most obvious lower high or lower low. In this case it's the blue line.
Key levels are AREAS on a chart where a pause, reversal, or breakout is expected due to the amount of supply & demand tied to them.
Key levels are referred to as a level but you should always see them as a general AREA.
Key levels should be able to stand out to you, you shouldn't have to dig deep trying to find them. Every key level should also have MEANING behind it. For example is your level where a reversal happened, HOD or LOD, lots of rejection or bounces, etc.
Resistance is a level/area price tends to keep rejecting from due to sellers. In this example we see every time price came up to this level, we rejected back down.
The more touches your level gets the better.
Support is the opposite of resistance. Support is a level/area price tends to keep bouncing from due to buyers stepping in. In this example we see every time price came down to this level, we came back up.
Psychological levels are levels such as $100, $125, $150, etc. Numbers that "sound nice", not levels such as $122.63 or $186.59. The reason why they're so important is because those are the prices where INVESTORS & INSTITUTIONS tend to enter.
In this lesson we will be going over..
- Chart & Candlestick Patterns
- The Reality of Patterns
- How You Should Actually Use Patterns
There's tons of chart patterns, instead of making this thread longer than it already is and going over each one, I've shared a cheat sheet below to make things easier.
Make sure to study them!
The truth about patterns is that you can't just learn the patterns and then proceed to play the actual pattern every time you see it, because most of the time, chances are they won't play out.
This isn't sustainable.
Patterns allow you to back up or shift your thesis. This is the proper way to use them. If you're in a bullish position and you see a bullish pattern forming, this allows you to have more confidence in your trade.
Same thing the opposite way.
EMAs (Exponential Moving Average) is an indicator that tracks recent price trend of a specific time period.
I use the 9 & 21 EMAs.
There's many different ways to use the EMAs, I personally use them to stay in my trade longer but also to enter/exit sometimes too!
VWAP is a very commonly used indicator and that's why it works. VWAP stands for Volume Weighted Average Price and it shows the average price the security should be at based off it's volume.
In this example we have price bouncing and rejecting from VWAP!
The same as patterns, indicators should not be used solely by themselves. They are here to help guide your thesis and manage your trades. Pair VWAP or EMAS with your own system and you have extra confluence!
In this lesson we will be going over..
- How To Find Zones
- How To Execute Zones
- How To Outsmart Retail Traders
When trading in the stock market, one must understand that it is heavily influenced by INSTITUTIONS and ALGORITHMS. To remain profitable in the market, one must trade like an institution.
Supply is where there is a quantity of shares yet to be sold (limits yet to be filled) at a certain area. This tends to lie in areas where the stock had previously sharply sold off due to sell orders being filled.
Demand is where there is a quantity of shares yet to be bought (limits yet to be filled) at a certain area. This tends to lie in areas where the stock previously rallied aggressively due to buy orders being filled.
Limit orders are orders that HAVE NOT been filled yet. This is how institutions trade, they set their limit orders at supply where they have sell orders, and limit orders at demand where they have buy orders.
Institutions have previous limit orders set from before. Once you identify where you think they have their orders, once it reaches the zone, the orders fill, and go through with your thesis.
I draw my zones on the 15m, 30m, & 1h timeframes but anything above the 5m works.
When drawing your zones you want to have your box cover the wick to the body.
Supply = Top wick -> bottom body
Demand = Bottom wick -> top body
See image for reference.
Balanced market is when b/s are agreeing on price. Imbalanced market is when one side has taken control.
The transition is your zone.
Below are 2 real life examples of supply zones. Both drawn from the top of the wick to the bottom of the body. Price comes back to our zone, sell orders get filled, rejection happens, and price moves down.
Below are 2 real life examples of demand zones. Both drawn from the bottom of the wick to the top of the body. Prices comes down to our demand, buy orders get filled, bounce happens, and price moves up.
Our zones represent limit buy/sell orders. As price touches our zone MORE, our zone gets weaker because there are LESS orders because they're being filled.
This is very important when playing S/D because if a zone is weak, it will lead to a S/D flip.
As mentioned once a zone is weak and our zone is broken, demand turns into supply and supply turns into demand. This TSLA chart is the perfect example.
Our red zone which was demand (now supply) was broken, we reject and move down to our demand zone, bounce, move...
When trading S/D flips it's important to wait for confirmation that the opposing side is present to defend the move.
1. Watch LVL2/T&S as confluence in the zone. This allows you to know if buyers/sellers are present.
2. Scale into your zone.
3. Look at the lower time frames to spot a reversal.
In this lesson we will be going over..
- How To Use LVL2/T&S
- How To Use LVL2/T&S W/ S&D
People use indicators like VWAP, EMAs, etc. The reality is that most indicators are LAGGING indicators. There is only 1 leading indicator and that is LVL2/T&S. This is what is creating the candles in front of you. This gives us an EDGE.
LVL2 data provides us with real time supply and demand info of a stock through the amount of open buy and sell LIMIT orders.
Limit orders are orders that have NOT been filled yet.
LVL 2 is split into 2 sections, left side is the BID, right side is the ASK.
Each section has 3 columns.
1. Ex = Exchange of the orders
2. Bid/Ask = Price order is placed at
3. BS/AS = Size of the order
Image below for reference.
For example..
3 on the bid = 300 shares @ 429.42
8 on the ask = 800 shares @ 429.45
T&S also known as the "tape" shows all orders that are FILLED. LVL2 shows unfilled orders, the tape shows filled orders.
So the limit orders you see on LVL2, will potentially be filled and shown on the tape.
The tape is also divided into 3 columns.
1- Time: The time the transaction took place.
2- Price: The price the transaction took place.
3- Size: How many shares were bought/sold.
You want to pay attention to the price and size of each order.
Below Bid: Aggressive selling pressure.
Bid: Strong selling pressure.
Between B/A: Neutral.
Ask: Strong buying pressure.
Above Ask: Aggressive buying pressure.
Using LVL2 and the tape with the supply and demand strategy allows us to have confluence in our S&D zones.
When we see ASK stack up at our supply zone with little to no buyers on the BID side, this allows to be confident sellers are present.
Let's go over two important LVL2/T&S tips..
A flashing order is when there is a big buyer/seller on the LVL2 and before their price gets tested, they remove their order.
They do this because they want to scare traders like you, if someone sees a big order on the opposing side they will panic and sell.
Ever wonder why a stock can't get past a certain level but there's no sign of sellers on the LVL2/T&S? This is because there's a hidden seller accumulating orders before the move.
Same thing for the opposing side.
Let's see this in action. I will be showing an example of $TSLA from last week bouncing off demand and buyers showing up on the LVL2 and filling on the T&S.
In this case we have a TSLA zone from $837.3-$844.85. We also had a previous demand, now supply because it broke, from $856.63-$864.69.
If you take a look at the LVL2, buyers are present on the BID, 2000 orders at 838.06, 1400 orders at 838, & 2200 orders at 836.
The ask has nothing.
Orders fill, we bounce exactly from our demand zone and move back to test our supply zone.
Now the scenario flips....
In this lesson we will be going over..
- Truth About Stop Losses
- Position Sizing
- Trimming Profits At 10%
- Having A Set Of Rules
Most people tend to have a hard stop loss on their option contract, get stopped out, and then get mad when the position goes their way.
Your stop loss should be based off the CHART not the contract. This allows you get stopped out when the setup...
Something very important correlates with this and that is your POSITION SIZING. You should be properly sized to see your position see your stop loss on the chart and not your contract.
Tip: Size for 0.
A lot of traders let their position green positions turn red because they hold for too long. Get in the habit of taking a trim at 10% and having your slightly above or at break even.
This will help you manage risk but also secure some money.
So often I see people trade without a set of rules, and when they do have a set of rules they don't follow them. Why have a set of rules just to break them? Have them written in front of you to remind yourself of them.
Here are some key reminders..
2. No setup, no trade. Take trades that follow your system ONLY.
3. Have confidence in your trades. Even if you're a beginner, you will never learn if you don't make mistakes.
To end of this master thread... In this lesson we will be going over..
- Psychology Mistakes You Should Avoid
- Tips To Stop These Emotions In Trading
- How To Control Your Emotions
1. Moving your PT out of greed
2. Chasing market moves out of FOMO
3. Overtrading out of emotions/anger to make up for losses or mistakes
4. Thinking you can outsmart the market because of 1-2 good plays
5. Focusing energy on the wrong things
1. Move stop to break even once you are at or above 10% profit to ensure a green trade.
2. Take a break. One day, 0 trades, will give you a clear conscious.
3. Put your rules in front of you to keep them in your sights while you trade.
1. Identify roots of the problem. Uncover the hidden flaws.
2. Map The Pattern. Identify your overall view of emotional activity.
3. Correct the problem. This is where you tackle the problem.
4. Repeat.
I love you all. #ConsistentCrusaders ❤
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Note: Not everyone will be accepted, please fill the form to the best of your ability <3
More from All
Master Thread of all my threads!
Hello!! 👋
• I have curated some of the best tweets from the best traders we know of.
• Making one master thread and will keep posting all my threads under this.
• Go through this for super learning/value totally free of cost! 😃
1. 7 FREE OPTION TRADING COURSES FOR
2. THE ABSOLUTE BEST 15 SCANNERS EXPERTS ARE USING
Got these scanners from the following accounts:
1. @Pathik_Trader
2. @sanjufunda
3. @sanstocktrader
4. @SouravSenguptaI
5. @Rishikesh_ADX
3. 12 TRADING SETUPS which experts are using.
These setups I found from the following 4 accounts:
1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4.
4. Curated tweets on HOW TO SELL STRADDLES.
Everything covered in this thread.
1. Management
2. How to initiate
3. When to exit straddles
4. Examples
5. Videos on
Hello!! 👋
• I have curated some of the best tweets from the best traders we know of.
• Making one master thread and will keep posting all my threads under this.
• Go through this for super learning/value totally free of cost! 😃
1. 7 FREE OPTION TRADING COURSES FOR
A THREAD:
— Aditya Todmal (@AdityaTodmal) November 28, 2020
7 FREE OPTION TRADING COURSES FOR BEGINNERS.
Been getting lot of dm's from people telling me they want to learn option trading and need some recommendations.
Here I'm listing the resources every beginner should go through to shorten their learning curve.
(1/10)
2. THE ABSOLUTE BEST 15 SCANNERS EXPERTS ARE USING
Got these scanners from the following accounts:
1. @Pathik_Trader
2. @sanjufunda
3. @sanstocktrader
4. @SouravSenguptaI
5. @Rishikesh_ADX
The absolute best 15 scanners which experts are using.
— Aditya Todmal (@AdityaTodmal) January 29, 2021
Got these scanners from the following accounts:
1. @Pathik_Trader
2. @sanjufunda
3. @sanstocktrader
4. @SouravSenguptaI
5. @Rishikesh_ADX
Share for the benefit of everyone.
3. 12 TRADING SETUPS which experts are using.
These setups I found from the following 4 accounts:
1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4.
12 TRADING SETUPS which experts are using.
— Aditya Todmal (@AdityaTodmal) February 7, 2021
These setups I found from the following 4 accounts:
1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili
Share for the benefit of everyone.
4. Curated tweets on HOW TO SELL STRADDLES.
Everything covered in this thread.
1. Management
2. How to initiate
3. When to exit straddles
4. Examples
5. Videos on
Curated tweets on How to Sell Straddles
— Aditya Todmal (@AdityaTodmal) February 21, 2021
Everything covered in this thread.
1. Management
2. How to initiate
3. When to exit straddles
4. Examples
5. Videos on Straddles
Share if you find this knowledgeable for the benefit of others.
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This is a pretty valiant attempt to defend the "Feminist Glaciology" article, which says conventional wisdom is wrong, and this is a solid piece of scholarship. I'll beg to differ, because I think Jeffery, here, is confusing scholarship with "saying things that seem right".
The article is, at heart, deeply weird, even essentialist. Here, for example, is the claim that proposing climate engineering is a "man" thing. Also a "man" thing: attempting to get distance from a topic, approaching it in a disinterested fashion.
Also a "man" thing—physical courage. (I guess, not quite: physical courage "co-constitutes" masculinist glaciology along with nationalism and colonialism.)
There's criticism of a New York Times article that talks about glaciology adventures, which makes a similar point.
At the heart of this chunk is the claim that glaciology excludes women because of a narrative of scientific objectivity and physical adventure. This is a strong claim! It's not enough to say, hey, sure, sounds good. Is it true?
Imagine for a moment the most obscurantist, jargon-filled, po-mo article the politically correct academy might produce. Pure SJW nonsense. Got it? Chances are you're imagining something like the infamous "Feminist Glaciology" article from a few years back.https://t.co/NRaWNREBvR pic.twitter.com/qtSFBYY80S
— Jeffrey Sachs (@JeffreyASachs) October 13, 2018
The article is, at heart, deeply weird, even essentialist. Here, for example, is the claim that proposing climate engineering is a "man" thing. Also a "man" thing: attempting to get distance from a topic, approaching it in a disinterested fashion.
Also a "man" thing—physical courage. (I guess, not quite: physical courage "co-constitutes" masculinist glaciology along with nationalism and colonialism.)
There's criticism of a New York Times article that talks about glaciology adventures, which makes a similar point.
At the heart of this chunk is the claim that glaciology excludes women because of a narrative of scientific objectivity and physical adventure. This is a strong claim! It's not enough to say, hey, sure, sounds good. Is it true?
Funny, before the election I recall lefties muttering the caravan must have been a Trump setup because it made the open borders crowd look so bad. Why would the pro-migrant crowd engineer a crisis that played into Trump's hands? THIS is why. THESE are the "optics" they wanted.
This media manipulation effort was inspired by the success of the "kids in cages" freakout, a 100% Stalinist propaganda drive that required people to forget about Obama putting migrant children in cells. It worked, so now they want pics of Trump "gassing children on the border."
There's a heavy air of Pallywood around the whole thing as well. If the Palestinians can stage huge theatrical performances of victimhood with the willing cooperation of Western media, why shouldn't the migrant caravan organizers expect the same?
It's business as usual for Anarchy, Inc. - the worldwide shredding of national sovereignty to increase the power of transnational organizations and left-wing ideology. Many in the media are true believers. Others just cannot resist the narrative of "change" and "social justice."
The product sold by Anarchy, Inc. is victimhood. It always boils down to the same formula: once the existing order can be painted as oppressors and children as their victims, chaos wins and order loses. Look at the lefties shrieking in unison about "Trump gassing children" today.
Funny there are those who think these migrant caravans were a FANTASTIC idea that's going to take the immigration issue away from you.
— Brian Cates (@drawandstrike) November 26, 2018
Like several weeks watching a rampaging horde storm the fences & throw rocks at our border patrol agents & getting gassed = great optics!
This media manipulation effort was inspired by the success of the "kids in cages" freakout, a 100% Stalinist propaganda drive that required people to forget about Obama putting migrant children in cells. It worked, so now they want pics of Trump "gassing children on the border."
There's a heavy air of Pallywood around the whole thing as well. If the Palestinians can stage huge theatrical performances of victimhood with the willing cooperation of Western media, why shouldn't the migrant caravan organizers expect the same?
It's business as usual for Anarchy, Inc. - the worldwide shredding of national sovereignty to increase the power of transnational organizations and left-wing ideology. Many in the media are true believers. Others just cannot resist the narrative of "change" and "social justice."
The product sold by Anarchy, Inc. is victimhood. It always boils down to the same formula: once the existing order can be painted as oppressors and children as their victims, chaos wins and order loses. Look at the lefties shrieking in unison about "Trump gassing children" today.
Joshua Hawley, Missouri's Junior Senator, is an autocrat in waiting.
His arrogance and ambition prohibit any allegiance to morality or character.
Thus far, his plan to seize the presidency has fallen into place.
An explanation in photographs.
🧵
Joshua grew up in the next town over from mine, in Lexington, Missouri. A a teenager he wrote a column for the local paper, where he perfected his political condescension.
2/
By the time he reached high-school, however, he attended an elite private high-school 60 miles away in Kansas City.
This is a piece of his history he works to erase as he builds up his counterfeit image as a rural farm boy from a small town who grew up farming.
3/
After graduating from Rockhurst High School, he attended Stanford University where he wrote for the Stanford Review--a libertarian publication founded by Peter Thiel..
4/
(Full Link: https://t.co/zixs1HazLk)
Hawley's writing during his early 20s reveals that he wished for the curriculum at Stanford and other "liberal institutions" to change and to incorporate more conservative moral values.
This led him to create the "Freedom Forum."
5/
His arrogance and ambition prohibit any allegiance to morality or character.
Thus far, his plan to seize the presidency has fallen into place.
An explanation in photographs.
🧵
Joshua grew up in the next town over from mine, in Lexington, Missouri. A a teenager he wrote a column for the local paper, where he perfected his political condescension.
2/
By the time he reached high-school, however, he attended an elite private high-school 60 miles away in Kansas City.
This is a piece of his history he works to erase as he builds up his counterfeit image as a rural farm boy from a small town who grew up farming.
3/
After graduating from Rockhurst High School, he attended Stanford University where he wrote for the Stanford Review--a libertarian publication founded by Peter Thiel..
4/
(Full Link: https://t.co/zixs1HazLk)
Hawley's writing during his early 20s reveals that he wished for the curriculum at Stanford and other "liberal institutions" to change and to incorporate more conservative moral values.
This led him to create the "Freedom Forum."
5/
