Trade Execution Planner. Module 6 Review 6 Key Principles Walkthroughs of Entering & Exiting Trades Big Mistake To Avoid Action Items To Take

Size: px

Start display at page:

Download "Trade Execution Planner. Module 6 Review 6 Key Principles Walkthroughs of Entering & Exiting Trades Big Mistake To Avoid Action Items To Take"

Tobias Jackson
6 years ago
Views:

Figures and information provided refer to the past and past performance and are not a reliable indicator of future results.

1 Disclaimer The VectorVest Program ( the System ) which we promote is not intended to provide you with specific or personalized advice. In all circumstances where you are looking to apply the System to your own personal needs you should consider whether you should first seek advice from a suitably qualified investment professional. Figures and information provided refer to the past and past performance and are not a reliable indicator of future results. Where stocks are quoted in foreign currencies, returns may increase or decrease as a result of currency fluctuations. In the event that you, as a recipient of this presentation, have any doubts as to the suitability of the investments or services promoted you should seek advice from a suitably qualified investment professional. You should be aware that the value of shares and other stocks may rise or fall. The rules on tax can change, and these changes may have an influence on the effectiveness of the System in the future. It is for you, as the tax payer, to assess the System s effectiveness throughout the process. Some assets are more readily realizable than others, and you should bear in mind that it may be difficult to deal in or obtain reliable information about their value. You should always take account of dealing charges. In addition to any initial charge quoted there may also be a bid/offer spread or dilution. Investments in options and other forms of derivatives may expose you to a higher degree of risk given market circumstances relative to other forms of quoted investments. The System even if used in its entirety, cannot be guaranteed to provide specific returns in the short, medium or long term and you should bear in mind that individual securities may and can fluctuate considerably in value from day to day. The System has been designed without any reference to the specific interests of a particular investor. We reiterate, when using the System, you must take into account your own specific needs and liabilities. This financial promotion has been approved by European Financial Publishing Ltd trading as VectorVest UK which is authorized and regulated by the Financial Services Authority under Register No European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. 1

2 Trade Execution Planner Module 6 Review 6 Key Principles Walkthroughs of Entering & Exiting Trades Big Mistake To Avoid Action Items To Take 2

3 Trade Execution Planner 3

4 You make mistakes 4

5 You re always late You re taken advantage of 5

6 You re not focused You need it to be 2 nd nature 6

7 Key Principles To Executing Your Trades 1 7

8 The Risk Graph is where you model all your trades BEFORE you place them. All the info you need is right here. 8

9 #1 Verify the Prob ITM Ask yourself: Is the Prob ITM < 30%? 9

10 #2 Look at the Credit Ask yourself: Is this worth it? Run the # s: Credit of $68 50% profit target is = $34 10 contracts would be $340 #3 Look at the Bid & Ask spread Ask yourself: Are they close enough? Is it reasonable? Run the # s: Fairly close = reasonable Wide = not reasonable 10

11 #4 Note the price to Exit trade Ask yourself: Where will I exit the trade? (hint: your short strike) #5 Note the price where you ll Adjust the trade Ask yourself: Where will I adjust the trade? Halfway 11

12 #1 Verify the Delta Ask yourself: Is the Delta within +/-0.08? 12

13 #5 Note the where you ll Adjust the trade Ask yourself: What is the Delta now? When the Delta changes by

14 Save the Risk Graph as a Page 1. Click File 2. Click Save Page As 3. Name trade Open the Page Anytime These files can only be read inside OptionsPro. 1. Click File 2. Click Open Page 3. Select & Open your file 14

15 2 15

16 Morning Rally, late day decline. The market topped on this bar, the patient trader would have waited. The high was made in the first 15 Minutes, and down the rest of the day. 16

17 3 OptionsPro gives you the target price, which is the midpoint between the Bid and Ask. Take the price of.85 to your broker and use a Limit Order. 17

18 Special Note on Deviating from Midpoint: You can adjust the order a bit. Try not to go beyond 10% of the midpoint. Remember Lower Price = Lower Credit Lower Credit = Lower Profits For Example: If you don t get filled at.85 you can lower your price. In this case,.85 would mean a low order.77 18

19 4 19

20 5 20

21 21

22 22

23 6 23

24 Remember, its all right here 24

25 Entry Price =.85 Stop Price = $ (Short Strike) 25

26 Profit Target of $42.50 =.42 (50% of credit received) Entry Price Adjustment price Short Strike Adjustment Price of (½ way between entry and short strike) 26

27 27

The Midpoint is multiplied by the number of Contracts 47.25 / 50 =.945 or.

28 The Midpoint is multiplied by the number of Contracts / 50 =.945 or.95 Tip: You can Model 1 Contract to see the Midpoint In most brokerages this is a Vertical Spread 28

29 Credit of.95 per contract GTC or Good Til Canceled 29

30 Credit should match Risk Graph Fill Prices 30

31 Click EDIT SPREAD and Enter Fill Prices 31

32 Real Time Profits based on Midpoints 32

33 Credit of $4,750 Profit target of $2, / 50 =.475 or.48 Another way to think about it: Profit Target is 50% of original limit order.95 / 2 =.475 or.48 When you take profits it s a Debit Order. 33

34 Make sure it s GTC Since you sold it for $4,750 Buying back for $2,400 Profits of $2,350 34

35 The Midpoint is multiplied by the number of Contracts 7.70 / 10 =.77 35

36 Adjustment price Adjustment price Adjustment Prices: (½ way between entry and short strike) 36

37 Credit of.77 for Entry Order GTC Total after Commission aligns With Risk Graph 37

38 Fill Prices 38

39 Click EDIT SPREAD and Enter Fill Prices Real Time Profits based on Midpoints 39

40 Fill Price was.75 (used a market order for demo) 25% of.75 = =.56 40

41 Click on Trade Debit GTC order of.56 41

42 Sold for $750 Buy back for $560 ($620 w/commission) 42

43 43

44 Congratulations! You made it! 44

45 Find Set-up Goal of OptionsPro Generate 5-15% a month trading options. Manage 45

Trade Management Game Plan. Module 5 Review 5 Key Principles Trade Management Techniques Big Mistake To Avoid Action Items To Take

Trade Management Game Plan. Module 5 Review 5 Key Principles Trade Management Techniques Big Mistake To Avoid Action Items To Take Disclaimer The VectorVest Program ( the System ) which we promote is not intended to provide you with specific or personalized advice. In all circumstances where you are looking to apply the System to