[VIDEO] How to Day Trade Weekly Options - Investing Shortcuts

[VIDEO] How to Day Trade Weekly Options

By May 24, 2017Options
How to Day Trade Weekly Options

The world of options, specifically trading them, is one of the most electrifying strategies and aspects in trading.  The internet is filled with claims of intense gains, massive success stories, and wild profits.

Yes, all of the above is possible. In today’s video you will discover which stocks are best to day trade options on, when to enter, why to enter, how many contracts to buy as well as how to mitigate risk when day trading weekly options. Risk mitigation with weekly options really is so crucial because of the immense potential of movement (in both directions). It’s simple math really: lose less than you gain and you’ll be profitable.

Check out the video to see a real life visual of weekly options and how you can trade them.

Prefer to read? Check out the video transcript below:

Hey everyone from Investing Shortcuts. Welcome to day trading with weekly options, arguably one of the most searched topics on the interwebs and the reason is because people love leverage. They love speed, they love high returns. I mean, I love all of those things as well. My objective today is to teach you exactly what it is that you need to do and specifically, what it is that you need to watch out for when you are day trading weekly options.

The potential for returns are massive. We’re not talking about 5%. We’re not talking about 10%. Those numbers are laughable in the world of weekly day trading options. What we’re talking about is fifties, seventies, or hundreds of percents of returns in days, in hours, or in sometimes in seconds. Now, with great power comes great responsibility right? So my objective also is to teach you about how to mitigate risk because a lot of traders, a lot of companies out there will simply teach you and sell you on the dream of how much money you can make and how you can take trips to Bali. And how you can buy Ferraris and all that kinda good stuff. Yeah, I like cars as well. I like trips as well but all I’m gonna  say is, I’m going to teach you the real life aspect of day trading weekly options.

Yes they’re fun, yes they’re lucrative but they do have risks associated with them. And not only am I gonna teach you the risks, I will be teaching you how to trade them. I’m gonna show you exactly what I look for. I’m gonna give you the exact stocks that I look for when I’m day trading weekly options. And I’m gonna help you build a trading plan that will be proficient, that will be simple and that will be hopefully, profitable. Thanks so much for watching this video, I really appreciate it, you absolutely rock, let’s go ahead and hop into some of these charts. Check them out and see what we can do together.

All right, day trading weekly options. Let’s make magic! One thing that is pretty much the most important aspect of day trading weekly options is again, reiterating the simple fact, there’s no magic pill, there’s no magic formula in trading. Everything takes work. Everything takes time. Everything takes practice and trading weekly options is great for people who have smaller accounts, if you’re interested in trading options. If you have a large account, options can provide great leverage as well, but usually traders with smaller accounts, when I say smaller accounts, usually under $25,000, are a little bit more interested in day trading options or day trading weekly options or 4X.

So let’s just go ahead and get right into it. When you’re day trading weekly options, there is no magical cure. You have to still learn and know how to day trade first. So let me just break it down and give you my personal opinion. Day trading stocks is easier than day trading options. Day trading stocks is like driving a Toyota Corolla from Nashville to Memphis. Day trading weekly options is like driving a Ferarri in the Indianapolis 500. Very massive difference in the two vehicles. Still, they’re both transportation. You can get from point A to point B but we’re talking faster, more intense, more dangerous, if you do not know how to mitigate your risk.

You do need to learn how to day trade first and that’s pretty much what I’m gonna be teaching you the basics of. It’s a little bit about day trading and just focusing on day trading because again, you’ve gotta know how to day trade before you can day trade with options. But I am gonna give you the very specific intel and information on what you’re looking for with your day trading and of course, no sales pitch here, just pure info.

So, what do I do when I day trade? Well, the market opens at 8:30 am my time. I’m in Nashville, Tennessee, CST, and 9:30 am EST is when the market opens. Before the market opens, I like to see what’s gapping. Now, when I’m day trading weekly options, as I mentioned in the video just a few moments ago, I look for very specific stocks. I’m gonna go ahead and just give you those stocks right now and I’m gonna explain the reasoning why. Here are the stocks if I am day trading a weekly option, these are the stocks that I am doing it on and there’s really no other stock other than these.

So again, it’s all about focus. Remember the market rewards the specialist. So if you can specialize in something. If you can focus in on something, if you can get really, really good at something, then you can get paid to play. These are the ones that I focus most of my attention on every now and then I’ll do some queue action as well. But SPY, GLD which is Gold, Tesla, Apple, Amazon, Netflix and Google. Specifically those are more of the expensive stocks anyway. I agree to that so if you’re day trading the stock, those are pretty expensive to be day trading on anyway.

So those are the ones, that if I am day trading a weekly option on, that’s the one that’s going to be it. I’m gonna be focusing on one of those and again sometimes the queues. So when I’m looking at the queues and the SPYs, really one of the first information to know is don’t expect really big moves from those. When you’re day trading, the queues and the SPY, set yourself up with a plan to be really comfortable and happy with 20 or 30% return on your optionable trade and lose 10% or less. That’s kind of your average go to set up on the SPY or the queues.

Because again, they’re indices, they’re indexes. They don’t move as volatile as a stock will. So Amazon can have a 4% drop in a day but the SPY is not gonna have a 4% drop on a day. It can be just a random Tuesday that Amazon drops, but SPY drops 4% in a day, you’re gonna know about it. It’s making headlines. So the queues and the SPYs, the indices, they do not move that much. So you’re gonna wanna be a little bit more patient with those. Take smaller gains, take smaller losses, in and out kind of trades on the SPY and the queues. That’s just my theory but that’s what I’m sticking to.

When I am day trading, I am pulling up the charts on those stocks and I’m asking myself this question, “Is the stock gapping?” Is the stock gapping, because gapping will provide an edge and it will help decrease the amount of trades that you are taking. The market rewards the specialist. You will hear me say that a million times. Well probably not literally a million times, maybe five or six in this video but I’m gonna say it a lot because it’s very true. If you’re a doctor, you’re specializing in something. If you’re an athlete, you’re specializing in something. If you’re an architect, you’re an architect, if you’re a lawyer, you’re a lawyer.

You are gonna get paid to specialize in something. So when you’re looking at a trade and relying focus on the gap, you need to ask yourself what type of gap is it and how do I play that particular type of gap. The SPY specifically again doesn’t gap that often but I’m looking for a gap. The time frames I play is I look at the daily to understand a little bit more about what I wanna do. Am I bullish or am I bearish. What do I expect the stock to do?

That’s what I base on my daily chart. So if a black candle is gapping down, saw it on SPY today, black candle gaps down, that is a retest gap. Anyone who is in bearish the previous day, they’re looking to buy the cover. Creating buying pressure and that gap likely will fill some if not all. If it’s a white candle gapping down like on that day or on that day, I call that a gap and go and I’m gonna be a little bit more aggressive on that trade. Those are the two type of trades. Either a retest where I’m more patient or a gap and go where I’m more aggressive.

That’s it. It’s that simple. So what you have again, either is it a white candle gapping down or a black candle gapping down. If it’s a white candle gapping up, same principal applies. It is a retest gap because whoever bought the prior day is gonna look to sell and is gonna be a little bit more patient on that trade. And if it’s a black candle gapping up, that is a gap and go. Black candle gapping up, I’m gonna be more aggressive with the bullish trade. White candle gapping up, I’m gonna be a little bit more patient. Black candle gapping down, I’m gonna be a little bit more patient. White candle gapping down, I’m gonna be a little bit more aggressive.

Daily chart, boom! Sentiment got it. Next, what am I doing? Well from there, I’m hopping into the hourly chart. Here’s the hourly chart and the hourly chart is gonna help you build your support and resistance. Support and resistance based on the hourly chart is what you’re going to do. Let’s take today’s info and before the market opened, it looked a little bit like this. Here we go, so this was before the market opened. So I’m looking at the hourly chart, I’m saying, “Okay, we got some support down here, base room over here. We got some resistance right about there and that’s gonna be the range I’m looking to play.” So, I look to buy down here and I’ll look to sell down here.

So market opens, boom you’re getting really close to that support level. Obviously, doesn’t quite make it. Notice, on the hourly chart, white candle’s gapping down. So I’m thinking to myself, “Okay, I’m gonna be a little bit more aggressive in the early morning on this trade and I’m looking to go bearish.” I’m looking to go bearish on that potential trade, on the hourly into the support. So I’m looking to trade it bearish into the support. So my edge is going to be bearish, white candle gapping down. Whoever bought is gonna get trapped a little bit.

The other time frames I’m playing are the 15 and the five. So once I got the hourly support resistance, here’s your 15 minute chart. And your 15 minute chart on SPY. Again, remember it gaps down. White candles gapping down, people are losing money, people are trapped. The people who bought there are looking to sell. White candles or bullish candles, they can be green on your screen. Bullish candles mean people are buying. The stock gaps down, people are getting trapped. I’m looking at the fifteen and the five minute charts to find my trade set ups.

And on SPY, let’s go ahead and just look at this particular trade set up right here. Here’s your double top pattern and let’s take this trade right here. I’m just gonna break this trade down for you. This would be the set up right here on SPY and this is a nice little one and done. You took this trade, fantastic, if you didn’t, no big deal. But this is the five-minute chart, so I’m basing most of my trades on the 15 and the five. Every now and then, I’ll look at the three, the two or the one but mostly I use the five-minute charts. I’m just letting you know.

So, the SPY, gapping down, today by the way was Friday, May the 6th is when I’m recording this video. So on Friday, what option am I going to use? Well if I’m day trading a weekly option, I’m gonna be using the option that expires today believe it or not. Now I will say you have two choices. You can do the one that expires today or you can do the one that expires next Friday. I will answer you this question. The question you have now is, how do you know the difference? The later in the day, I will use the one that expires next week. So if we’re talking about 4 in the afternoon, the market’s closed. Noon or so, after 12 Eastern, I’m probably looking to take the next week.

If it’s in the first 20 minutes or hour of the market, I’m looking to play it that week. Here’s my setup and the entry is 20454. So the PUT that I’m buying, when I buy the PUT, I buy the nearest at the money PUT option. Obviously, in order to day trade weekly options, you do have to know what options are, you have to know a little bit about how options work. Thankfully there’s a lot of free resources out there to learn how options work. What in the money and out the money means, I highly suggest knowing that information in depth before you start trading these things because they’re very, very volatile. Again, I’m gonna be buying the near they money PUT.

I would buy the 205 PUT because you have 205 and then you have 204. Those are the ones that you can choose from so I’ll be buying the 205 because it’s in the money. It’s gonna move a little bit better for you. So again, I’m gonna buy the 205 PUT. If and when SPY creates that little double top, boom, getting in bearish and then down here you can look to play it bullish again because again, you’re buying it at support. So I can’t teach you everything in the world, everything that you need to know about day trading weekly options in one video.

I’m gonna do my best to give you the basics and the solid concepts behind it all. What I’m about to do right now is gonna be mind-blowing. I’m gonna teach you how to create a risk profile so that you know how much money you’re going to lose on a trade. When I say going to lose, ladies and gentlemen, it is a mathematical fact, when you trade the stock market, you will lose on trades. It’s also mathematical fact if you lose $1 on every trade that you lose and you make $2 on every trade that you win, you will be profitable. Mathematical fact, if you make more money than you lose, you’ll be a profitable trader.

So it’s about focusing on the losing trades, it’s about focusing on the risk. That is the key. That is important. That is massively, massively important because you can make a lot of money trading weekly options ladies and gentlemen. You can also lose some money trading weekly options so you need to protect yourself. There’s my spiel. All right, so how do you control your risk? Your risk should be 1 to 2% of your account size. So if your account is $50,000, you’re looking at trading a $500 risk. If your account is $5,000, you’re looking at playing a $50 risk.

That’s it folks, pretty simple, 1% now, I would say the more advanced, the longer you been trading, you can go up to 2%. So if you’re trading a $5,000 account, you can trade a $100 risk. So here’s how you calculate risk. This is a known value. You should know this value going into any given trade. There is no mathematical formula out there that I have found yet that can give me an exact value for knowing exactly how much I’m gonna lose on a trade other than using the option price itself and doing the math. This is the easiest and the quickest way. I’m just letting you know.

So when you’re getting into a trade, you want to know the risk before you get into the trade. You wanna know how much you’re gonna lose if you’re wrong before you get into any trade in fact. So go in and know what is your risk profile. I’m just gonna be honest with you, you’re gonna want to take your risk profile and keep it the exact same for about two to three months and then measure and see how you’re doing. Are you profitable? Then increase your risk per trade. Are you not profitable? Then either decrease your risk per trade or seek some help. Find out what you’re doing wrong and see if we can make some adjustments.

All right, so, what is your risk per trade? Keep it the same on every single trade for about two to three months so that you can measure your progress. So you can decrease your variables and your trading. Let’s say in this example, your R or your risk is 100 bucks. Here is how you’re gonna calculate the trade. So your risk, a known value, that is not a variable, that is something that is constant that stays constant and consistent for a while. So your stock 205.12 which is just a sample, it’s above the previous pivot, entry 204.54.

What we’re gonna do is do some really simple math, we’re gonna subtract one from the other.

205.12 minus 204.54 equals 58 cents. 58 cents, you’re gonna take 100, you’re gonna divide it by 58 cents and you’re gonna come up with 172. What does this represent? Well this represents how many shares you would short the stock if you were trading the shares on SPY. But you’re not, you’re trading options. So how many option contracts control 172 shares? One or two. I know it’s kind of a rough formula but I like to base my stops not necessarily on the value of the options themselves but based on the price of the stock itself.

Okay because if you based it on the option, all right, if you buy an option and the option is $2 and you buy 10 of them, your investment is $2,000. That’s your investment. So you know pretty easily that if the option goes down to $1.90, again you had 10 contracts, you have 1,900 bucks. You’ve lost 100 bucks, that’s your R in this example. You’ve already lost your $100. So if you just factor in, if you buy this option at 2 bucks, let’s say and it wouldn’t cost that much. I’ll give you an exact example of how much it would cost. But let’s say that you bought it and it cost $2, yes you could just go in to your account, set your stock at 190 and walk away and you could set your sell.

So this is sell to close for a loss, that’s your stop loss. Then you could do a $2.30 sell to limit. So you’re risking 10 cents to make 30. So one to three risk reward ratio, it makes sense. The problem with that strategy is option prices fluctuate randomly during the day at different variables in different prices for different reasons. So even if the trade works in your favor, the trade breaks in your favor, comes up simply retest right here. You might’ve gotten stopped out with that 10 cent difference because of time decay on your weekly option or volatility increasing or decreasing. You could’ve gotten stopped on that trade even though the trade came nowhere near the stop at 205.12, came nowhere near your stop.

Could’ve gotten stopped on the trade, trade didn’t work and you’re frustrated because you bought 10 contracts and you’re down 100 bucks. When in reality, you should buy 1 to 2 contracts. So now you’re thinking to yourself, “Jerremy, I’m not gonna make a lot of money quickly with one to two contracts.” Correct! That is absolutely correct. Trading the stock market is not a get rich quick scheme. You’re not going to do it quickly. It’s gonna take time, it’s gonna take progress, it’s gonna take discipline, it’s gonna take consistency but you can make money doing it. The question is how consistent and disciplined are you gonna be and are you gonna give up after a year or two.

There’s no get rich quick scheme in the stock market. It’s just not gonna happen. So go ahead and erase that illusion from your mind that you can make $100,000 in a year off of 10 grand. It’s gonna be very very difficult, very complicated and I would likely suggest a real life perspective where you make 5-600 extra bucks a month and you start paying off bills. So SPY, you do the calculation, you take your entry, you take your stop, you subtract the numbers, you come up with a number. This is how many shares you would short if you were trading shares.

You could do one, two, maybe three, possibly four weekly options. So one or two, if you buy one, you know that you’re gonna lose less than 100. If you buy two, you know you’ll probably lose a little bit more than 100. And if you buy three, you’re definitely gonna lose more than a 100 and if you buy four, you’re absolutely gonna lose more than 100. So really, do this formula, it’s a very quick formula. You can build an Excel sheet to do that for you, it’s very, very simple. I’m just guaranteeing you right now that it is probably the quickest and best way to base the risk value on the stock chart relative to the option and still control your risk to a pretty certain degree of value.

So simple fact, the trade would’ve worked. You would’ve bought the 205 PUT, you would’ve exited your options here at your target. You would’ve made approximately 100 bucks and hopefully on the way down, you’re thinking, “All right, it’s a really good support, it bounced there once before, bounce there again, I’m gonna do the exact same thing again.” So you wait for a morning star reversal, boom, boom, boom. Again, yes, learning candlestick patterns is crucial in trading. Here’s your morning star reversal and where you gonna take the trade up to? Back up to the resistance. Why not?

So now, you’re gonna buy a call option. You’re gonna buy a call option, so 204.19 minus 203.80 equals 39 cents. 100 divided by 39 cents equals 256 shares or two or three contracts. So you buy two or three contracts there, the trade takes a little bit of time to move. Move, move, move, you probably take your stop, mitigate risk, because that’s very, very important with weekly options, trade comes down a little bit, trade comes back up. You take your stop up to break even about an hour or two later and the trade hits your target and you’re done.

And at this point, its 1:30 Eastern. So you’re probably done for the day, you made two profitable trades purely based on support resistance and you’re up approximately 200 bucks and you’re done, 200 bucks on the day, awesome. There you are, fantastic. Now what if you say, “Well, Jerremy, I wanted to go bearish right here.” So what if I went bearish right there and placed my stop right there. Let’s say I bought some PUTs at this resistance, I went in bearish, what would’ve happened? Very simple, you would’ve gotten stopped out and you would’ve lost money and that’s okay.

So let’s say you did take that trade. Mathematically, you kept your value the same. Made 100 bucks on the bearish trade there, really would’ve made, if you entered here and your stop was here and your target was here, you made about 200 bucks, but let’s just say you made 100. Let’s just say you just made 100 and you took $100 on this trade lost. So now you still have $100 gain on the day, you’re two out of three, congratulations. What a lot of traders will do is they’ll take a very, very small stab at the market early in the morning and they’ll risk 50 bucks, they’ll make their money and they’re happy. They’ll take that same trade again bullish, they’ll take the trade bullish. They’ll be a little bit more aggressive on that one and they’ll trade $150 and now they’re up $200 on the day and then they’re really confident now. Winning two in a row and they’re gonna risk $400 on that trade.

Lose their trade, that trade does not work and they’re down on the day even though they have a better than 60% win loss ratio. Gimme a hand, gimme a show hands if you’ve done that. I’ve definitely done that, I was a moron when I did it, I didn’t know how trading worked. That’s how trading works, keep your risk the same ladies and gentlemen and if you are a 50/50 trader, you can make money doing this. So what would happen, how about… what now Mr. Nice guy? The market’s not open right now, what next, what’s gonna be the plan?

Again, here’s your hourly chart, so let’s come up with a plan based on the exact same support resistance that I drew earlier. So let’s say we have a white candle on the hourly, SPY gaps up to here on Monday morning. White candle gapping up, I’m expecting it to retest. Stock retest, I buy the dip, I buy some calls, stop here, entry here, target up here somewhere and that’s that. Simple. There you go, that’s the plan. Think in the future, think about the plan the future. That’s what the real life professional traders do, they plan their trades for the future. They anticipate what they wanna happen, what they wanna see and they make their moves.

So here’s Apple. Apple today, here’s your daily chart and notice what Apple did not do today. Apple did not gap at all at the open. Well I say at all, theoretically it did. It had a common opening day gap, so it closed here at 93.24 and opened here at 93.37 and the gap filled but it didn’t really have a fantastic gap. So looking at this trade, you can notice that there’s really good support. At least I have my support line on Apple at 93.37. So let’s come in here to the five-minute chart and let’s say you wanted to play the bullish bounce off of that. Well notice right here, Apple is trading. Really really good resistance. Broke through the support.

You didn’t get into the trade, no hammer, no one white soldier candle, no morning star reversal, nothing to give you confirmation to buy there. Stock trades lower, comes back up to that resistance, fails that resistance. You could’ve taken this trade right here on Apple. Entry there, stop there, and let’s calculate that one really quick. So there you go, entry, stop and target, one would’ve been right there previous low of the day. So 92, so this was approximately at noon Central. So this is 1:00 eastern, so you probably would take the trade on the next week’s expiration at this point.

So you wouldn’t be doing this Friday, you’d be doing next Friday’s expiration. So 92.49 minus 92.27 equals 22 cents. $100 divided by 22 cents equals 454 shares. That’s how many shares you would short. Since we’re not shorting shares, you could buy four or five PUT options. I’ll let you make that call. It’s at 92.27, so I would buy, in that situation, I would probably the 93 PUT to be honest with you. Maybe the 92 because it is pretty close to at the money, but I’d buy the 93 and I’d trade down on exit most set my target right here, it’s at solid trade again, $100 risk, you’re making your money boom, there it is.

So now, stock bounces off the support, trade’s up a little bit higher, breaks through this daily support level, comes back to retest that support level and bygones be bygones. You just flipped the trade around, you’re now bullish based on this morning star reversal. Here’s your entry, here’s your stop. You calculate the trade set up and again, you make your trade. And you would again, in that situation, buy the 92 call on Apple. Did I do that trade today, no I did not, because Apple did not gap remember? That was the very beginning of my setup. I said I wanna gap on trade to signify what I was gonna do and what I’m looking for it to do.

So here’s Tesla. Tesla the other day did gap right here. So let me go over to the daily charts. This is on earnings, had a very weak gap up. So very, very weak gap up right here, so it actually opened here and just traded down. Now I did not short at the open, but here’s what I wanted to do and I got very, very close to getting triggered in and I got distracted honestly. But here’s a little setup right there, it breaks down the low of the day pattern entry here, stop there on Tesla and there is your profitable trade on Tesla.

Here’s Amazon AMZN, here’s the daily chart, so you’re wondering, “Man, how much information do I need to learn to day trade weekly options?” Probably a lot. You need a lot of info. So here is a strong gap on Amazon, black candle gapped up, so that’s a pretty aggressive trade. You’d be looking to aggressively trade that bullish in the coming days and it would’ve worked out well. I did not trade Amazon today but honestly, this run right here in the afternoon would’ve been bananas. Here’s your resistance, here’s your support, here’s a higher low right there. So let’s just calculate how many options you would’ve taken on that high of the day break out right there.

A little bit of a setup, high of the day break out with volume confirming, trading a weekly option on that type of spread right there. So 664.01 minus 662.10 equals $1.91. 100 divided by $1.91 equals 52 shares. What to do, 52 shares, well Amazon does have mini options. So you could buy five mini options or one contract and if you buy one contract, you’re probably thinking to yourself, “Yeah, I’d probably lose a little bit more than 100 bucks but I’m okay with that,” kind of thing. It wouldn’t be massively more than 100 but it’d definitely be more than 100 and the trade works. It triggers into the trade and you would’ve made a profitable trade on that setup.

So here’s the key guys, there is so many things to look at when you’re day trading. One of the keys is removing variables and when I say removing variables, variables are all the other stocks out there. What you don’t wanna do is pull up a random pharmaceutical company that’s gapping down like this one today. This was a phenomenal, phenomenal day trade, printing money, I felt like the fed looking at this thing today. Anyway, TEVA, you don’t wanna pull up a random company on a gap down and get in bearish like that with some PUT options.

Sure, it obviously would’ve worked but if you’re getting into a random trade, you don’t know the bid ask spread, you don’t the open interest, you don’t know the volatility, the implied volatility, don’t know if it’s a good optionable trade or not and really, it’s just not the best way to play it. I don’t personally day trade weekly options on anything below $75 when I’m day trading and I definitely, absolutely, 100% would not day trade anything on $25 because the options just don’t move well enough when you’re day trading them.

It’s a fact, I really suggest, if you’re day trading weekly option, get it on a more expensive stock. There are ways to day trade stock without having to have $25,000. Very few people will teach you that, but it exists. If you asked your broker they’re like, “No, it’s impossible.” No it’s not impossible. It’s not about the resources. It’s all about the resourcefulness. Email me jerremy@reallifetrading.com if you wanna know how, I’ll be happy to share you some information. But regardless on TEVA, great gap, flawless, I’m looking to swing trade this one bearish. So by the time you watch this video, if TEVA’s down here, I’m gonna take a trip to Hawaii.

So TEVA doing its thing, all I’m gonna say on this one is, when you’re day trading weekly options, decrease your variables. Looking at a certain selected few of stocks, so seven stocks or so, focusing on those, that’s decreasing your variables. Then from there, if the stock is gapping, that’s decreasing your variables. Now it goes from seven, now it just goes to three. You have the hourly chart, the 15-minute chart to five-minute chart, looking for support and resistance, you’re mitigating your risk, you’re focusing on those three stocks for the day. The market rewards the specialist and keep in your mind that you do not have to trade.

Professional traders know when to trade and they know when not to trade so when the trade’s not there, if the setup’s not there, don’t play it, don’t waste your money. But if you are playing it, mitigate your risk and make sure that you’ve planned the trade in advance. That’s one of the most important things I can emphasize. Make sure you’ve planned the trade in advance. Because with an option, I really do not suggest just buying it on the fly because of the bid ask spreads. They can really, really catch you, so you wanna make sure you have a plan of action in advance on the stock.

On Google for example, let’s come up with a plan right now, for upcoming trade. So let’s say Google, right now has a little bit of a support resistance like that. Let’s say it was to gap down Monday morning and opened at 720. Anyone who bought in here would be trapped, they’d be losing money. I’d tune in to the 15 and the five-minute chart and see if I could play it bearish from here to here on a five-minute. Then I’d look for the bounce down at that level. So if you’re trading those seven stocks, it’s easy to build a trading plan day to day once the market closes. Write your plan down, leave, go enjoy life, go play some tennis, have some beers, have a good time. Come back ready to trade the next day and you got your plan ready to go.

And you’re like, “Oh cool. Pass to me, I did a really good job creating a plan.” Now you got the plan, you simply follow it. So if Google gaps down, what if Google doesn’t gap down, what if Google gaps up? So we create a plan for gap up, but you simply have your plan in place, in advance before a trade does anything. That is absolutely crucial to remember especially when day trading options.

Guys, I appreciate you so much watching this video, again if you have any questions, hop over to your inbox and shoot me an email, jerremy@reallifetrading.com. You guys absolutely rock. Let me hop back over to the live stream. Hey Shawn, can we bring out this camera man?

What? Did we just become best friends? Yup. Guys, girls, ladies, gentlemen, traders from around the world, thank you so much for watching that video, I really appreciate it. Thanks for taking my take on this shortcut to how to learn how to day trade weekly options. I know you probably feel like you’re drinking water hose from a fire hydrant or I think the saying goes. There’s a lot of information coming at you really, really quick and again, you’re probably gonna wanna watch this video multiple times. Feel free to, it’s free, it’s here, it’s for you. Go back, rewatch again if you need to. Take notes and of course, as I’ve said before, feel free, email me jerremy@reallifetrading.com.

I am much much a better trader than I am a fashionista, obviously you can tell by this shirt. I’m here to help you. I’m here to answer your questions. I want to make sure, I can do anything I can, to teach you, to give you shortcuts, to give you the tips needed so that you can learn anything as quickly as you can and so that you can make a little bit of money, and of course with money comes the ability to do the things that you want to do. Travel with your family, take the vacations you wanna take. Go to the places you’ve never gone before, go to the restaurants you’ve never gone before, pay off your credit card debts, pay off your house debts, buy the house that you want for your dreams, go to the places you wanna go. That’s what money can do. Money can make you a better person.

Money can do a lot of things for you. It’s not the key to happiness, of course. The more money you have, doesn’t mean that you’re gonna be more happy, it’s about the people and the experiences that you really bring into your life and it’s about becoming a better person. And really at the end of the day, that’s what trading is. In order to become a better trader, we’re going to need to become better people and that means more patient, more disciplined, more focused, better at money management, better at time management. We gotta be better people and really at the end of the day, isn’t that what life’s all about anyway? Becoming better, growing, progressing, maybe making a little bit of money on the side with something you absolutely love and of course you love this, because you’re here, you’re watching it, so I’m gonna say it again. Thank you so much, I really appreciate it, you absolutely rock. I will see you again in the future and until next time, remember, love life, live life and trade it. I’ll see you around.

Jerremy Newsome

Author Jerremy Newsome

Jerremy Alexander Newsome is a full-time trader and the CEO and co-founder of Real Life Trading - a community of innovative, inspiring, and driven people from all around the world. Jerremy and company share their Real Life perspective on everything day trading, retirement planning, investing, budgeting and more... His passion is in trading the market and helping others achieve success with their own trading through enthusiasm and humor. He specializes in candlesticks, gaps, credit spreads, day trading, and swing trading. You can count on his eccentric approach to both trading and teaching to set him apart from your standard educators. We are sure that his quirks and quotes will delight you and of course, help you trade faster, better, and more profitably.

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