Trading Flowchart
Our Trading Flowchart provides a guideline to strategically position your trades, taking into account three major factors: the overall market condition, the individual chart trend, and the options flow. Here’s what the flowchart looks like:
- Market Bullish + Chart Bullish + Flow Bullish = FULL SIZE Position
- Market Bullish + Chart Bullish + Flow Neutral = Reduced Size Position
- Market Bullish + Chart Bearish + Flow Neutral = NO TRADE
- Market Bullish + Chart Bearish + Flow Bearish = Proceed with Caution
- Market Neutral + Chart Bullish + Flow Bullish = Normal Size Position
- Market Neutral + Chart Bullish + Flow Bearish = NO TRADE
- Market Neutral + Chart Bearish + Flow Bullish = NO TRADE
- Market Neutral + Chart Bearish + Flow Bearish = Normal Size Position
- Market Bearish + Chart Bullish + Flow Bullish = Proceed with Caution
- Market Bearish + Chart Bullish + Flow Neutral = NO TRADE
- Market Neutral + Chart Bearish + Flow Bullish = NO TRADE
- Market Bearish + Chart Bearish + Flow Neutral = Reduced Size Position
- Market Bearish + Chart Bearish + Flow Bearish = FULL SIZE position
The first factor, the overall market condition, refers to the broad economic landscape. This could include aspects like interest rates, inflation, geopolitical events, and other macroeconomic indicators that impact the general direction of the market. Understanding the ‘bullish’ or ‘bearish’ status of the market can help you align your trading strategy with the larger financial climate.
The second factor, the individual chart trend, is all about technical analysis. This involves analyzing historical price data and patterns to predict future price movements of a specific asset. Whether the chart is ‘bullish’ (indicating potential upward movement) or ‘bearish’ (suggesting potential downward movement) provides crucial insights for timing your entries and exits.
Finally, options flow refers to the analysis of options volume and transactions to gauge investor sentiment. By observing whether the flow is ‘bullish’, ‘bearish’, or ‘neutral’, you can get a sense of where the big money is moving, giving you a valuable hint about future price movements.
By integrating these three factors, the Trading Flowchart provides a systematic approach to trading, enabling you to position your trades optimally based on a variety of scenarios. It guides you on how to adjust your position size and when to trade or not trade, promoting disciplined, strategic, and effective trading.
Remember, these are not hard rules, but rather guidelines to help you make informed trading decisions based on multiple factors.