The technical trader is one who looks at stock price charts and tries to use them to determine what the price will do next. It is assumed that all the fundamental information is incorporated into the current price, and uses one of many theories about predicting the future price through the price history of the stock to determine its next movement.
Examples of the technical trader’s toolset are momentum, trendlines, Fibonacci levels, candlestick patterns, and price patterns.
Technical traders identify long and short positions, so they have reduced market risk. While this is true, technical traders have more variability in their returns, as their theories and price patterns can easily be invalidated.
The strategies that are used for technical trades are less routine and based on the status of the option statistics. This newsletter has more swing trade positions that will last 1-3 months. The key to trading these positions is good risk management and adhering to stop-loss levels with discipline.
Technical trading will lose more often than the fundamental trading style, but will usually realize more annual gains.
The Technical Trader newsletter utilizes Volland's options dealer positioning flow, EcoQuant's data analysis, Hadik's timecycle analysis, and Wizard of Ops's macro analysis to devise option trades that best capture the edge the analysis provides.
The following are the most common strategies in the Technical Trader newsletter, but may be different based on the situation:
● Campaign Calendar/Diagonal – This is a trade plan where a long-term goal is reflected in the long strike 3-6 months away, but the short strike reflects a short-term plan that essentially reduces the price of the long strike. Month after month, the long strike stays put while the short strike expires worthless, continually reducing the price of the long strike until it costs little money to keep it. The goal of this strategy is risk management, so as time goes on, the cost of the position decreases as you wait for your thesis to come true. This is very good in a low-volatility period
● Verticals – Both in the money and out of the money verticals are going to be used based on the thesis. In the money verticals will be used for less risky trades while out of the money verticals will be used to expected swift stock price move.
● Butterflies/Condors – In order to realize a price move in a high volatility environment, these strategies will be used out of the money to realize expected price movement with very little risk.
Examples of the technical trader’s toolset are momentum, trendlines, Fibonacci levels, candlestick patterns, and price patterns.
Technical traders identify long and short positions, so they have reduced market risk. While this is true, technical traders have more variability in their returns, as their theories and price patterns can easily be invalidated.
The strategies that are used for technical trades are less routine and based on the status of the option statistics. This newsletter has more swing trade positions that will last 1-3 months. The key to trading these positions is good risk management and adhering to stop-loss levels with discipline.
Technical trading will lose more often than the fundamental trading style, but will usually realize more annual gains.
The Technical Trader newsletter utilizes Volland's options dealer positioning flow, EcoQuant's data analysis, Hadik's timecycle analysis, and Wizard of Ops's macro analysis to devise option trades that best capture the edge the analysis provides.
The following are the most common strategies in the Technical Trader newsletter, but may be different based on the situation:
● Campaign Calendar/Diagonal – This is a trade plan where a long-term goal is reflected in the long strike 3-6 months away, but the short strike reflects a short-term plan that essentially reduces the price of the long strike. Month after month, the long strike stays put while the short strike expires worthless, continually reducing the price of the long strike until it costs little money to keep it. The goal of this strategy is risk management, so as time goes on, the cost of the position decreases as you wait for your thesis to come true. This is very good in a low-volatility period
● Verticals – Both in the money and out of the money verticals are going to be used based on the thesis. In the money verticals will be used for less risky trades while out of the money verticals will be used to expected swift stock price move.
● Butterflies/Condors – In order to realize a price move in a high volatility environment, these strategies will be used out of the money to realize expected price movement with very little risk.
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