How To Trade In Options – How To Trade Options Video 43 part 6


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We’ll see if it completely engulfs this red bar here. If it does, it might be a very good sign that it’s going to continue higher. It’s called an engulfing pattern in the candlestick charts. I’m not so sure it’s going to go that high, so I’m getting out.

We made a little bit more profit. We’re up to $402 now. About $250 of that was in the last 40 minutes. That’s all I do every day. I take a look at the extremes of the market. I take a look at these bars. These four bars set me up. If I see a couple in a row, I might look to go on the long side. If I see three of these, I might continue to go on the long side, here.

I’m just going to be monitoring them to see if the trend has changed, and we do start to trend a little bit higher in the market. I have to reload my gun. We’ll see if this market trades higher. It looks like it wants to try. If it goes above this little tail here, we might have a chance for a pretty good rally up at 55, and I’m going to be riding it all the way.

So far, I have a nice profit of $402 for the day. Just take a look at these profits for the day. You can see that on the DXD, which is the ETF for the short side of the Dow Industrials, I made more money than I did on the DDM. That was the long side of the market, so far. That’s usually how it goes.

I could have held my last 100 shares a little longer, but it never hurts to take a profit. That really jumped. We may have an opportunity to trade for the long side. It looks like there is a trade. This market is going to turn around and start trading higher.

I don’t know if it’s going to last or not. Let’s take a look at the DXD. We’re probably getting some extreme readings here. We’re way down here. Let’s see if this holds. The market internals look pretty good – actually, kind of bad. When you think about the market itself, we are in a bear market for today. I’m just talking about the day.

There are 2799 stocks declining. There are only 38 advancing. That’s pretty bad. You have these rallies every once in a while, but I would take the extreme other side of the market and say, “You know what? You had a nice rally here, but if you take a look at the day, you’re in bad shape.” That is how bad this day is.

You can have a little rally, but it may not last. That’s why I would take this side. Let’s just hang in here for a couple of minutes, and see what actually happens. We are trading a little bit higher. Not a lot, but a little bit.

I got it at $69.09. It’s not too bad of a trade. Just a little extra profit here. $69.13. I have a red arrow. My volume is starting to decline on my internal indicators. The advancers are starting to go back down again. I may have caught something here, but I’m not going to hang around for it.

The internals do not look good at all. I would like to catch these extremes. Actually, I probably pulled the trigger on that trade subconsciously. I didn’t actually mean to pull the trigger on it, but as long as I did, I’ll take the profit off it.

We’re up there. We’re going higher. I’ll take my profits. I didn’t really mean to get into that trade, but I’ll take it. Now we’re up to $480. It gives me a little $50 profit or so.

That’s how we do extreme trading. It’s pretty interactive. We’re constantly monitoring the internal situation of the market, at all times. If I can come out with $1500 a day, that’s my goal. When you do this, when you take a look at these internal sensors here – I consider this my control panel. When I have a green light, I’ll go long. When I have a red light, I’ll go short.

Measuring the number of advancing-declining issues, and the volume that’s going into these issues, is a very nice way to trade. Generally, what happens is that you’ll get the signal on these indicators, before the price starts to move on you. You have a little bit of an advance warning.

Now, it looks like we’re turning around. We went negative, and now we’re turning back around again. The trend continues, where we’re going higher, and the number of issues continues to increase, when we’re going higher – then I’ll start trading more confidently from the long side. I traded very confidently from the down-side, which gave me a good amount of profit for the day so far. I’m constantly monitoring these.

You can tell that, when you see a lot of red bars, that means that the market is just going to decline. When you start to see a grouping of green bars like this, the market will probably continue higher.

That is extreme trading. Hope you guys enjoyed it. Go out there and trade with confidence.

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2 Responses to How To Trade In Options – How To Trade Options Video 43 part 6

  1. Kevin says:

    Hi guys,

    first wanted to thank you for all the wonderful videos and training material, I’m brand new to options and just going thru everything. I find the videos very helpful and clear! so thank you for that!

    I have a question regarding the members website (I know the videos where recorded about 6-7 years ago and things might have changed since then) but is there somewhere that there are recent blogs and videos on how you are managing your portfolio or has that stopped? the reason i ask is that in one of the videos you mention that there is page that we can view this information.

    Thank you again and i look forward to hearing back from you.


    • admin says:

      Sorry Kevin, I missed this. Dave used to have a paid membership site that he has since cut out. He is still trading full time, but he and his partner quit doing the daily updates.

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