 Hey everybody, this is Brian and in this video, we're going to cover 30 days of magic or more appropriately using magic eight ball for 30 days. This was a viewer requested video. They said, we want to see what this looks like after a month. And they actually did the recommendation of doing three trades a day. So all these times are Eastern Standard Time, but we're doing three trades a day at 9 30 in the morning, you know, the moment the market opens, we're entering a reverse iron condor. And well, it takes a little bit of explaining, but I'm going to go over how these trades are constructed and how I manage them using magic eight ball. And at 10 a.m. or roughly, we're going to go into a vertical. Now the verticals I did wait if there was news, I tried to wait until the news was over to see which way the market was going to go. But these trades were copied and pasted directly out of magic eight ball into thinkorswim. And don't worry, you don't have to use thinkorswim to use this system. It's just as an example. And around 2 p.m., I was doing a custom iron condor using something called sonar. Now sonar is built into magic eight ball, but it is also an external script. You can plug directly into thinkorswim and I'll demonstrate that in this video. The reverse iron condor. This one takes a little bit of explaining, but we enter at 9 30 in the morning, meaning we don't care what the market's going to do at 9 30 on the dot. You enter this trade and I'll show you how to construct it. We use magic eight ball to track the health and we run it to expiration or I should say we run it until we think we're going to expire in profit or if we need to, we'll stop this out. Let's go ahead and take a look at how this is constructed. All right, let's demonstrate how we would create a reverse iron condor. Now if you see these blue boxes, this is called sonar. I'll discuss this later in the video. But basically at 9 30 in the morning, you would look for at the money right at the money here. Let's just go right click and then we're going to buy an iron condor. If we flip over to the analysis tab, this is what it looks like. And if you're unfamiliar with this tab, I'll explain it very quickly. You see this zero right here. Anything above this is profit. Anything below is a debit. So we want to stay above the zero and you can see the price right now at the time of this recording is right here. You also have this blue line and the magenta line and they are often represented down in the box on the lower left. You can see as I move the mouse around the numbers change in that box. The magenta line is your profit curve or this is real time profit. So if I were to close the trade right now, I would have lost nine cents. But if I ran it to end of day or expiration, I would lose $218 unless the price moves of course out of here. So the main point is with a reverse iron condor, you want the price to move. You don't want to stay in this little pit of despair as we call it. And I'm going to go ahead and lock that price so it stops moving around. But the premise is you'd enter first thing in the morning and then as the market moves, you would move into profit and you would expire full profit. That's the general theory. It doesn't always work that way. You may be wondering because the reverse iron condor, you really don't need a prediction. You just need the market to move. How would you use magic a ball to manage that trade? That's a really great question. So let's just use SPX as an example here. I'll go down and look at a live trade here. There's a few different ways. So first off, we can look at the magic a ball prediction chart and you can see that gamma or Gax 43 98 is right here. So as the day moves on, I would look for that bright green line or the dark green line, the long term prediction to move around and you can see the long term prediction saying, Hey, it's going to move down. You could also use the quad chart and I'll expand that out a little bit in case you're really interested in volume. You see how volume has this nice node forming around 42 55 and change. That could be a key indicator. The market's going to move down. You could also look at gamma, delta and open interest. Another thing is the sonar chart sonar something I want to really cover in depth in another video, but I'm going to touch on it very briefly. Sonar comes in two flavors. First it comes as a thinkorswim script that you can plug right into thinkorswim to demonstrate that. It'll say loading, but it's these bright green cells and you can go in here and you can customize these to highlight at a specific limit. Now in case you're wondering, yes, the full code is available. It has to be in order to run in thinkorswim and it's really nothing super scientific. It's just a modified version of Gax. But we can tell right here is where the market wants to go that bright green box and you can set your threshold to however you want. Bear in mind these other numbers will push and pull on the price throughout the day. Now just in case you don't have thinkorswim or you can't get the script running, I have included it directly into magic as part of the prediction engine and it's this chart right here. The very last chart called the magic a ball sonar chart. This is only available in the paid version and it makes that very simple to understand. You can see at the time of this recording on six twenty two thousand twenty three there is a huge note at forty four hundred. I mean this thing's just massive and what it does from there is it says here's the top range. Here's the bottom of the range. This dotted line is the center and then this magenta line is really what you got to watch. This is where magic a ball has calculated the market wants to go to. So what we can pull from this is yes there's a huge note at forty four hundred but there's a lot of action down below which is going to pull that price down slightly. So what I would do is I would check this magic eight ball sonar chart throughout the day to make sure this magenta line is going to be well you guessed it outside of our little pit of despair here and you can see the price is actually in real time starting to swing lower. And as the day goes on I expected to kind of move to about right here. Now these trades are not without risk. Of course there are days where it fails and we'll cover that here in just a second. Here are the results for the reverse iron condor. You can see the very first one I was trying to figure out how to do this and it actually works either way. You can either sell the condor or buy the condor. I stuck with buying it so it's actually a long condor. And after oh looks like nineteen trades twelve of them one seven loss for a success rate of forty one percent for a profit of one hundred and seventy dollars. Now you notice looking at that sheet some of those did stop out. Now I tried to do a one X stop again you know your mileage may vary depending on your brokerage and where it stops you out at and you can adjust to stop yourself. But just as a general test I wanted to see how good a reverse iron condor was and as you can see forty one percent success rate is you know less than average it's not really what we hope for. So a lot of people use the reverse iron condor because they think the market's going to move and I saw you know over half the time the market actually landed end of day pretty much right back where it started. Now of course it's going to depend on you know what's going on in the real world the news you know the expected move all those different metrics but just wanted to give a good snapshot of the reverse iron condor in the system. Everybody's favorite the vertical I would enter these around 10 a.m. eastern standard time I would literally copy and paste these from the magic eight ball prediction engine into thinkorswim and I would use magic eight ball to track the overall health. I would run these to expiration if I could otherwise they would stop out and these do mimic what I see professional traders in say acts options doing now if you don't know what acts options is you can search you to for acts options it's a group of professional options trader I'm in there as well really great group of folks. Let's see how we would construct these verticals OK to create a vertical what I would do is I would look at the chart and thinkorswim you know actually go out and see what is happening right now in the day and so you can see markets kind of trailing down here. So then I would go out to magic eight ball and I would go into paid server. I would go to whatever prediction I was looking for for example I'll do SPX. I would go to the newest one so I just scroll all the way down to the bottom and this is where I would do things like I would look at the actual prediction and it says you know we're expected to move down and then the range. I would look at the metrics to make sure I was happy with those and then we have the example trades and you can literally copy and paste these. So for example I will grab the vertical I'll just copy that and just for reference I will pop open some of these charts and say OK well it looks like we're going to be below forty four hundred you know all the other metrics kind of confirm that and then look at this chart as well and you can see there's our forty four hundred and Gax and the predicted calculation all the other metrics are below that so we really think this is going to end below forty four hundred time will tell of course it's very early in the morning here so we can if we wanted to enter this and I would go to the analyze tab. Optus open here and there's this little paste icon and I would just paste it in and you can click this unlock button to get the latest price I try to calculate that so it's very very close and you can right click and you can analyze this trade so you can see there's forty four hundred and this is what the trades constructed to do it thinks the market's going to be below forty four hundred so it's just going to design a vertical to do just that and then I would just simply hit confirm and send and just make sure everything's the way I want it and hit send and of course it filled very quickly because I'm paper trading now you may be wondering how do you paper trade this notice how I did the analysis and it was at forty five cents now if I flip over to the monitor and I go with our fill it filled for fifty cents so what I would do if I wanted to paper trade this is I would unselect everything and then only select the analysis at the forty five cents and that's how you could see if it would have expired full money without that extra you know balloonage that is the options trading pretty simple pretty easy now I would take it a step further and I would actually put a stop loss in so I would go here I would say create closing order and stop loss is something that's just kind of whatever you feel comfortable with I'm not going to really give you advice but what I've seen professional traders do is they will do like a 2x stop so you have to minus the premium so we have fifty and then minus it again so let's just say times that by three so we'd have a 1.5 that would be our potential stop and I can go in I can analyze this as well now you notice the moment I do that it is a flat line at negative 105 and I can uncheck our stop to see our trade follow this pink profit curve down to see where 105 is and 105 is it about right here 4402 so what we're really saying is if it slaps up to this node we want to just you know get out of this trade and we would lose a hundred and five dollars but if it were to expire in full profit we would gain forty five dollars stop loss is something that's probably critical and I'm not going to preach about risk management because it's honestly something I struggle with myself because I'm still a new trader but make sure you have good risk management strategy magic eight ball is not perfect but it has a pretty good track record okay how would I use magic eight ball to track the health of this vertical I don't want to just implicitly you know fire this out there and forget about it I could if I have an appropriate stop loss and risk management but what I would do is I would go out and I would check periodically throughout the day and I go to the newest one I'd say okay what does magic eight balls sonar think it's going to do for example well it still thinks it's going to go under 4400 and from the last snapshot in this recording it's actually dropped down a bit so we're headed in the right direction and we can confirm that of course with the other charts you can see oh yes this dark green line is a long-term end of day prediction and it's trailing down it did bump back up slightly but it's trailing down you see this pink line which is the price is trailing down as well gex is still up here this bright green line and it may be hard to see but it is 4395 and 25 cents I would be watching this bright green line to start dropping down as well and if it started going up that's when I would get a little bit nervous additionally you can do this directly in think or swim if you have the sonar script you can see how we have this highlighted here we have this 16 and 14 now 16 is the higher number so I do expect us to pull this way but this 14 is gaining in speed so it's going to start pulling it that way and this is where sonar gets a little confusing inside of think or swim think or swim because you have to kind of crunch the numbers in your head if you look at 16 and 14 the difference between these two is really negligible and you can see that the price is slowly trending up but this number is gaining and as it's gaining it's pulling away from this number so this may still grow but it'll grow at a slower rate and this is why I don't like the script necessarily versus the chart which is nice and easy to understand but basically what sonar is saying if we flip back into this court here is that there is this massive note at 4400 and we are expecting to pull down slightly from there the results from the verticals okay now bear in mind I would enter these at 10 a.m. and if I could I would run them completely to expiration end of day so I would try to enter 10 a.m. unless there was news I think I'm 518 and 519 I really waited because there was real news coming out I would also use the appropriate risk management and stop loss and I would try to stop these at about a 1x so 19 trades 14 wins meaning 14 of these went completely to expiration full profit five of them stopped out that's a success rate of 64% for a profit and loss of $555 I mean for not even having to apply any brainpower whatsoever it's literally just copy paste set a stop loss walk away this was ridiculously simple for $555 end of day iron condors what I would do is I would enter these around 2 p.m. Eastern Standard Time and I would construct these iron condors from sonar meaning I would not copy and paste directly from Magic 8 ball although you can but I wanted a higher profit target now show you how I construct these and then of course I would use Magic 8 ball to track the health similar to how I've done in the other trades I would run these to expiration now the problem with expiration and these is that you are so close to end of day that market can move against you and can move against you very rapidly let's look and see how we would build these okay the first thing I would do is I would go into Magic 8 ball and I would go to the newest prediction and I would check out not just the prediction chart itself to see you know where all the metrics are pointing to I would also look at the quad chart and me personally I always look at gamma and delta volume and interest always come into play but I tend to lean towards more gamma and delta exposure you see how gamma has this 4400 node and delta has this beautiful 4400 node but it has a lot of pull down as well so that pull down would have me a little bit nervous but I want to know exactly where to set my strikes so what I would do is I would look at the sonar chart let me blow this up a little bit here the sonar chart gives you a range for example as high and low and these numbers may be flipped around for example the high may be 4375 and it's a little bit confusing but what it's saying is the high number isn't necessarily the highest strike but it's the one with the most metrics behind it in this case the 4400 has the highest metrics and the lower metrics are the 4375 so I would construct an iron condor around these yellow lines or this range and that's exactly where I'd expect it to be if I was not super confident I would add $10 on either side so we're going from probably 4410 to 4365 and let's jump into thinkorswim and just build one so it's still fairly early in the day but let's go over to our 4360 and let's go sell iron condor let's get rid of these other trades I was playing around here with and this is what it looks at right here this is what it looks like right here got a little tongue tied there so I would bump this up to let's see 4415 and I am not a thinkorswim expert here so you may watch me screw around with this for a little bit there we go so this is what the trade would look like now this is an abysmal risk to reward ratio as the day goes on the condor availability or the range that it will go through will shrink so you'd have a much better risk to reward so this is a very very early one I would do it around two it would have a 420 risk with an $80 reward now like I said closer towards end of the day you will see that range kind of shrink in and you would have something that has a one-to-one risk to reward and that's really what I was shooting for was a one-to-one or a one-to-two risk to reward pretty simple to understand but the main takeaway here is that you would use the sonar chart the high and the low ranges these yellow lines to construct where you would make that iron condor because that tells you realistically where the market's gonna go and then you could track that using the metrics quad chart or the of course dark green line and bright green line on the prediction chart to make sure it's going to stay within your strikes now a word of warning with these end-of-day condors is the market can move against you very very rapidly and because this is so late in the day that you would do these like 2 o'clock Eastern Standard Time you'll see this yellow line let's just say it will snap up close to here and you have a very tight range and if some news comes out at the last minute or some big banks algorithm kicks in that market's gonna just rip against you very quickly and there's not a whole lot you can do other than well pray and I actually got asked one time I think it was right here on this trade well you know what is your exit strategy or what's your profit strategy and I said prayer and then the market went wham and I got really really nervous but I watched magic a ball and I watched the charts and I saw that the metrics were still up here and the market of course shot back up so my iron condor on that day actually did work out appropriately but that's an example of how the marketing can just very quickly move against you and you got to be really careful end-of-day trades end-of-day iron condor results we had 17 trades for a total of 13 wins and four losses those losses did stop out again I got super lucky on those stops if the market had ripped against me you know in the last few minutes of the day I would not have been able to stop out so a success rate of 69 percent that's pretty phenomenal and the profit and losses were 1025 and that's due to the good risk reward if you look at that chart you see all of those condors had pretty good premiums whereas the normal condors inside of magic eight ball are much smaller premiums because they are much much wider so they have let I should say less risk in terms of the market moving against you but they also have less premium all right to wrap this video up I wanted to make a special note that well two things first these trades were not done in a bubble meaning I did them out in the live stream you see where it says magic live I actually do broadcast live on my separate laptop that's in the other room and sometimes there was only a handful of people and sometimes there was a lot of people in there watching me it got a little nerve-wracking for me because I'm still a newbie investor and I would just literally put the trade out there and people could watch it in real time also if you go into in the paid server the log section and in the free server I also have the log section I do post the logs daily and the zip file so it has every single trade magic eight ball kicks out and I do this little infographic for SPX so you can see the accuracy the accuracy does vary depending on the day and what's happening but traditionally iron condors are the most accurate and verticals come in second butterflies are the bane of my existence let's actually go down to last week so Friday of last week you can see the overall system accuracy of 66% meaning if you took every trade that was designed for SPX it would have been 66% accurate butterflies only 14% of them iron condors were only 84% and I say only because iron condors are usually way above 95% they're usually 100% accurate and Friday verticals were 100% accurate meaning if you had grabbed any vertical for SPX didn't matter what time of day you would have expired in full profit that's what I'm designing the system to do is make options trading extremely boring additionally I don't trust my own logs I want this to be a community effort because if I create the logs and hand them to you like how can I trust them so I don't trade I don't trust them either so I throw them out there for the community and in the logs chat they really dissect these things and one thing I love is they really highlight like the best entry time they've kind of targeted around 10 or 11 in the morning that's really your best entry time but they do talk about the number of trades at one number trades at lost overall profit and they really just dissect these things and rip them apart and I absolutely love that so really great community effort here and it shows kind of the best entry time the best exit time and I just love how the whole community is kind of coming together and working towards this so I hope you found this helpful the links to Magic 8 ball and even the free version are down below I hope to see you there