Tackle Today: Best Patterns for Option Trades
March 14, 2022
«Don’t Overthink it.»
Traders,
There’s just a few more hours until tonight’s Options 101 webinar detailing trade plans for long calls and puts. As a final message before the main event, let’s look at the best chart patterns to use when buying options.
It’s pretty simple. Remember, long calls are a substitute for buying stock, and long puts are an alternative for shorting stocks. Thus, the best trade setups for stock trades are also the best for purchasing options.
As outlined in our S.T.E.P. System, bull retracements and bull breakouts are the two most common patterns that offer favorable risk/reward entries. Think of them as buying an uptrend at support or once price breaks through resistance. In both cases, the odds suggest additional upside is in store.
Sellers have their version of each pattern with bear retracements and bear breakouts. Think of these as shorting a downtrend at resistance or once prices breach support.
Our coaches highlight the best retracements and breakout patterns for bulls and bears each weekend in our Scouting Reports. They are fair game for stock and options trades. And that includes long calls and puts.
Whether or not you go with a straight option purchase or build a spread will likely come down to how aggressive you want to be in your bet, the share price, and implied volatility. The lower the stock price and implied volatility, the easier it is to justify purchasing calls and puts.
🛑 Options 101 Webinar TONIGHT! › How to Swing Trade Long Calls and Long Puts with Coach Tyler Craig | March 14th, 2022 at 8:30 PM EST on YouTube
This next YouTube training will be focused on swing trading calls and puts using the S.T.E.P Swing Trading System. In our last webinar, we introduced the topic from a high level. This time, we’re building trade examples and focusing on how to enter and manage long call and long put trades.
In this webinar you will learn:
✅ What is Swing Trading
✅ The Long Call Strategy
✅ The Long Put Strategy
✅ Reward to Risk Expectations
✅ The Best Chart Patterns for Long Calls & Long Puts
✅ Case Studies
Video of the Day: Trading Concept Check: What is a breakout pattern
Traders love breakout patterns, high bases, flags, ascending triangles, cups and handles, you name it, when a stock breaks through a resistance price level, prices tend to run and there is a techncial edge for traders looking to take advantage of the typical increase in momentum as price clears the resistance zone and the bulls pile in seeing the confirmation of the breakout and the contrarians or bears scramble to buy to cover.
Chart of the Day: Roku Bear Breakout
Roku is an example of a bear breakout pattern that made our list over the weekend. It’s in a downtrend below all major moving averages and ended Friday at the doorstep of a support break.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Weekend Reports
Watch the Stock, Options, Commodity, and Forex Reports to help you prepare for the week.
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