Discover and read the best of Twitter Threads about #ThuFriRule
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🏈 Late day fade kicking in ?? 👀 twitter.com/i/web/status/1…
There are many ways to know that u're not betting against the house (smart money). The simplest one is to use common sense. Example if a low float trash stock gaps up 100% on BS news, with no pullback, & a ton of buying volume comes in at the very TOP, who do u think is buying?
You think the smartest people in the market see a piece of shit stock literally one foot away from getting delisted gap up 100% on crap news and think "yeah this is a great buy. Dear broker, fill me in at the very top please" ?
Or let's use large caps / options as an example. Do u think the smartest money in the market see a LC stock that's been selling off for multiple days in a row out of pure irrational and think "yeah, that's a great place to start shorting or exit my long position" ?
It's been a while since I've done one of these, so in this thread I will deconstruct ADFs (@team3dstocks) credit spread #Thufrirule trade from this past week. Let's start with Monday, prior week had huge selloff after fed meeting, open interest on puts was still decent - 
Here is the day (tues) ADF sold the first part at 395 & 390, the open interest on the 390 almost doubled this day. Notice the volume profile on the options at this point in time, along with the volume profile on $SPY. Supply and demand is clear.
Here is the day he added to the position, we had an increase in open interest this day, $SPY grinded lower. Notice the supply and demand on the actual option charts at this point.
😂You mischievous little cunts!! A bud sent me this and I damn near spit out my quinoa smoothie. No I didn't blow up, oh ye of little faith. You need an IQ of 13 and fetal exposure to spoiled shrooms to blow up doing credit spreads.
Im in the middle of a 3 month $TWTR break that's supposed to end in september (football season). We were at the half year mark (june) and I already hit 50% completion of 2022 trading goals, but was way, WAY behind on 2022 family (vacations & travels), fitness, and business goals.
And by Sept I need to be at least 75% done with all 2022 goals before 🏈season starts, so that I can relax & turn on cruise control into year end. And each time im behind on goals I just temporarily cut out all low ROI activities, and tweeting to u fuckers is definitely 1 of em
🐻Best shortselling setups in lowfloat land:
-massive gappers
-overextended afternoon fades (my #bloodBath setup )
-I used to love overextended multiday runners yrs ago but they're not frequent enough
Use #vwapBoulevard, pm highs, or highvolume trendbreaks as areas to risk off
-massive gappers
-overextended afternoon fades (my #bloodBath setup )
-I used to love overextended multiday runners yrs ago but they're not frequent enough
Use #vwapBoulevard, pm highs, or highvolume trendbreaks as areas to risk off
🐻Best shortselling setups in largecap land:
-Big gap ups (very rare though)
-overextended multiday runs IF fueled by dumb money, not institutions
-Extended #ThuFriRule setups
-Negative catalyst events (rare)
-Daily chart Breakdowns out of massive volume profile areas
-Big gap ups (very rare though)
-overextended multiday runs IF fueled by dumb money, not institutions
-Extended #ThuFriRule setups
-Negative catalyst events (rare)
-Daily chart Breakdowns out of massive volume profile areas
🐂Best long setups
-when any of the bearish setups above fail & reclaim ( #youGonLearnToday setup).
Now
1) Pick 1-2 setups to track & master
2) Execute w/ flawless risk management
I just saved u years of pain, tracking, & hemorrhaging 💵. the rest is up to u
#BearTipOfTheDay
-when any of the bearish setups above fail & reclaim ( #youGonLearnToday setup).
Now
1) Pick 1-2 setups to track & master
2) Execute w/ flawless risk management
I just saved u years of pain, tracking, & hemorrhaging 💵. the rest is up to u
#BearTipOfTheDay
Ive explained this several times, including on monday's post. the call-bagging takes place as we approach thursday/friday, & mon-wed is when they move the stock in the direction retail wants to give them FOMO. Therefore premiums are always the highest/juiciest earlier in the week
If I wait until thursday or friday to start selling, there'll be barely any juice on the calls to swing trade short (unless the stock pops & gives a daytrade opportunity on those days). So how do i maximize premiums without getting steam rolled? I start SMALL early in the week
then I get aggressive as we approach mid week. So if my max loss per credit spread is 1R, and i decide to start early, i would risk maybe 1/4R or 1/8R, leaving room for the stock to go higher. that's why i said on monday "im staying small since we're still EARLY IN THE WEEK"
I dont know how many times I have to repeat this... I do NOT apply the #ThuFriRule on earnings week. most of the Open interest during that week is mainly big dick funds & MMs hedging their asses off. So the whole "bagging dumb money calls" thesis flies out the window.
second, I always combine my #ThuFriRule with my own price action / volume setups. So i dont just blindly trade based off high OI alone. ALL my setups require multiple factors to line up. The more factors that line up, the higher the odds (ADF score).
and third, even if everything lines up, i still trade as if 50% of all my trades will fail (1 of my biggest risk management rules). Now thanks to Odin, they dont, but I trade and size as if they will. This way i'm never caught off guard when a trade goes south.
#BearTipOfTheDay
#BearTipOfTheDay
I call it the #ThuFri rule for a reason. the bagging of the calls usually happens around thursday-friday. sometimes (very rarely) they start unloading on Wed (but again, that's rare). So if u're trying to go bearish on the stock earlier in the week, give urself room to be wrong
Also, know that price action is always king. Call sellers are only right 90-95% of the time. the 5-10% chance they're wrong and unable to manhandle the stock, you'll get a gamma squeeze ( like $TSLA last year, $GME, $AMC etc & now $AMD ). so always be prepared.
#BearTipOfTheDay
#BearTipOfTheDay
Also do NOT use the #ThuFriRule around earnings if u're a beginner (if u do, use pussy size). Price action & open interest around earnings is hard to read because everyone hedges. that's partly why IV is so high (sellers & large investors protecting themselves from unexpected BS)
