Thread by @MapleStax

How to trade weekly 0DTE options!

🧵 A THREAD 🧵

This is my approach on trading very volatile and profitable options contracts with 0 days to expire.

1. 0DTE contracts are risky, but with increased risk comes greater reward. The truth of the matter is that you do not need to risk a large % of portfolio to make insane gains. Always watching first 3 OTM contracts closest to being ITM.

2. Each morning I analyze $QQQ (or whatever ticker you want to trade) and find the channel that price is consolidation in. I look for highs/lows prior to close or the highs/lows of ext. hours.

3. I gauge the strength of price action as it approaches the channel support and resistance levels. I take Calls if we bounce off support and Puts if we reject resistance. I only take breakout entries on a pullback or retest.

4. Note: This does not confirm the trend for the day, this is why I watch VWAP, 9/20/200 EMA on 5min to understand if the strength of the trend. Basic explanation: over VWAP 🐂 under VWAP 🧸. 9for strength, 20 for stops/entries, 200 is crucial level of resistance/support.

5. You must always ask if you are trading with the trend. Fighting the trend is futile and the main reason I ever take a loss. Once I have my entry, I like for them to do as much work for me as possible.

6. Meaning I will hold on and ride the trend as long as I can, reading and understanding market sentiment to the best of my ability so I know when to scale out. Average hold time: 30min-1hr+

7. You should be scaling out along the way, as cliché as it sounds. Sell a portion on rallies/strength to lock in high delta premium. This also prevents chasing unrealized gains you should have had the integrity to lock in to begin with.

8. Reality: Losses on 0DTE are increased as theta is not in your favor. It is not the same 10% max loss in small caps, but we are not risking the same position size. I use about 1/2 normal size and make 2-4x more. If I’m wrong, I cut quickly based on TA levels and flip sentiment.

9. When trading LC options, we should always be aware of ours indexes. SPY, NQ, VIX, UVXY, and any news that may affect the market in either direction. Follow the larger participants in the market and grab the meat of the move if you can. Aim for consistency, not the anomaly.

10. Overall, you will be rewarded much more in regards to % capital you use, your time trading, and for proper TA application. I hope this helps someone out there, I’d love to hear your results at the end of this week! Results from some members in #HouseOfStax

Patreon daytrading education:
Patreon.com/MapleStax
Patreon.com/MapleStax

Daily daytrading streams 9am EST:
Twitch.tv/MapleStax

$QQQ $SPY $NQ $VIX #ChartHashira