Disclaimer: I am not responsible for any profit or loss due to the context of this blog. This is for Entertainment Purposes Only.
The next couple of post I do on my blog, I will cover different strategies to be more effective with trading options with the Stock Market. These strategies have generated me good returns but that doesn’t mean you will get the same results.
Required Indicators For This Strategy
- Moving Average Exponential – Set Value To 14 and Choose Bright Color
- Moving Average Exponential – Set Value To 48 and Choose Bright Color
- Moving Average Exponential – Set Value To 8 and Choose Bright Color (Optional)
- (MACD) Moving Average Convergence Divergence
If you want to do this method with the FREE Trading view account then the Moving Average Exponential with 8 is optional but I find it helps after you are in your actual options trade.
When done, your screen should look like the picture below and I am going to be using the 5 minute timeframe…
I learned most of this strategy from ReviewDork who goes over in more detail on the 13/48 strategy which alone is very powerful. Check Out His YouTube Channel Here.
I added a few new things to his strategy which helps improve chances of gains in my opinion.
The first thing you need to do is follow the 13 EMA. When it crosses paths with the 48, that’s when you make your move. If the 13 EMA crosses up, then it’s a uptrend. If it crosses down, it’s a downtrend.
Step #2 (Optional)
I leave this as an option for two reasons. If you are using the FREE Version of Trading view, this is only required while your option trade is active.
As you can see in my example my 8 EMA is yellow and after I have found the time the 14 and 48 crossed and my option trade is active, the 8 EMA helps show the path and it’s easier to identify when to get out of the trade but this is optional. I do find it as a add on to ReviewDork‘s 14/48 strategy and very helpful.
Step #3 Using the MACD to confirm your trades
The MACD is used to confirm the direction after you find your spot where the 14/48 cross, then you can use the MACD to confirm the direction and you can see more clearly if you have a winning trade by looking at the lines in the MACD.