 Okay folks yeah welcome to the webinar and we'll get started today I'm going to show you some algorithms on day trading but we'll change these topics all the time and depending on what the market sentiment is. I'm trying to have about one maybe two webinars you know we'll see how things go. Now the days of these webinars is not fixed and so what you want to do is if there's this bitly link here bit least I'll go webinars if you click that and there is a free course and you can enroll in this free course that way you'll be kept up to date on when the webinars are coming out when the webinars are happening and you'll find some information about these webinars over here. The link is here but if you join the free course then I'll be able to send you notifications and with the live recordings or in case you missed something then I can send you a recording as well. So that is as far as the webinar logistics itself. So my name is Harish Swaminathan I'm the founder of optiontiger.com I'm just going to give a brief background here I see a lot of familiar names. I started option tiger in 2002. Prior to that I've been a self-taught options trader and mentor for over 12 years and on Udemy I have a about a hundred thousand students enrolled and I'll just quickly show you my Udemy profile as well and I think it would be helpful if you I've got a lot of stuff over here and this is all coming from experience with options and the markets in general. You can see I have 60,000 unique students and over a hundred thousand enrollments with over 9,300 reviews here but if you could take the time I would urge you to just read through some of this because this is very real stuff and we are dealing with the markets and whatever I've had in my experience I've tried to convey over here. Okay so so that's as far as Udemy is concerned. I run optiontiger.com which is my own website and let me just briefly show you that as well that's right here you can come to optiontiger.com. Lately I've been working with a lot of algorithmic trading signal services so there is one algorithmic based signals I mean a swing trading signal service today we're going to look at the SPX intraday trading and then there is the day trading signals as well. I used to run a webinar on this but because of some personal circumstances I've had to cancel the daily webinar session and which is why also I tell you if you I don't know which days I'll be holding a webinar so your best bet is to enroll in this course here so in any case besides these I have an entire options curriculum so from beginner intermediate and advanced now each of these modules has over 15 to 18 courses so I'll just show you an example of the beginner and so if you're completely new to beginner I mean new to financial markets or trading or investing then this is where you want to start and there's an entire section on just financial markets in general and then we start getting into options there are some mini courses as well so similarly you'll see the same kind of material and courses in the intermediate as well and then there are some advanced courses so all of these have about 15 to 20 courses each and then I have what I call the max systems which are beyond advanced I mean these are very elite property you know intellectual property very elite techniques and which have all come from trial and error over the years and whether you're looking for day trading swing trading earnings reports how to you know play calendars how to you know get the best out of iron condors weekly max is about weekly options adjust max is a universal adjustment philosophy so all of these are very advanced systems so anybody interested you can go in and click into these and you'll see generally you'll see either a webinar or some kind of a recording there that you can watch about it and then of course the course details and everything is there so that's as far as the option tiger website is concerned let me come back here and so as I said I've been lately involved in proprietary algos for trading success so algorithmic trading tools in general for the retail level has not been available or has not become popular for you know and that's for good reason because most of these algos are being run by the professional trading firms and and so on and so forth the institutional what we call the institutional traders or institutional investors the algo trading has has become has become popular but you know it's still pretty nascent at the retail trader level and with options it's a bit more trickier because if you if you've experienced with options there's a lot of parameters here and at the retail level it's hard to come up with something unless you invest so much into into programming and even hardware I mean you need you know you need a lot of crunching power here and so up until recently you know the best way to analyze what the markets are doing or what the stocks were doing is to you know just previously just cycle through the charts and the indicators and all of that but algos can now be coded to do the same thing on watchlists you know like I said you know all computing power in general has has increased and so now at the retail level you're finding a lot more interest in the algos and to be clear algos is not a is not a black box in the sense that it cannot do everything for you for you I mean algos the best thing they can do and especially with options you know if you're trading stocks then perhaps you can create a black box system but with options there are so many parameters to to think of and look at that algos just cannot do everything so all of these algos all they do is they will create a high probability trading scenario so and that's really all you can ask for from the markets because even you know if you have some of the best algos also can go bad and in fact when you hear of things blowing up even within the institutional trading environment you you know it's because algos have gone bad and so you you cannot test the algos for every possible situation in the market and at some point the algos will go rogue and you know it'll backfire so I don't know if you guys heard about this company I forget the name I this was about three to six months ago it's an option-stating company and they had an algo it was a hundred million dollar fund in Florida and they just completely blew up overnight completely just on you know one trade I suppose but I don't know the details but you know that's what happens so yeah you have to consider that algos are a huge tool they are a very good resource and they will take your probability of good trading to a much higher level and really that's what we are looking for so here on option tiger as of now we have a day trading algo and this algo filters stocks for the best candidates and of course once the market starts we're going to look at all of this and then the day trading SPX is an indicator for market internals and the swing trading algos a multi-week trading timeframe so all of these will take a quick look at it what I want to talk about today is the SPX market internals so the advantage with the SPX is it's an index and that means it's it's made up of component stocks and the case of the SMP 500 we have 500 stocks that go into the SMP index itself so there is already some internals available and one is the wall SPD which tells you the up minus down volume of all the stocks in the SMP so any stock that's up that that volume is counted as up volume and any stock that's down it's counted as down volume and then you have advances minus declines the AD SPD so all of these they try to give you a sense of the breadth of the market so when I say breadth okay it's not just what is one stock doing what is one index doing what is the internals of that index so which means in the case of the SMP 500 we're looking at 500 stocks then there's a third one called the ticks and the ticks is it's just an up tick minus down tick so every millisecond in all these 500 stocks they are either ticking up or ticking down and so the ticks calculates what is the number of up ticks what is the number of down ticks and it gives you a continuous reading when the markets are open so the ticks in that sense is a lowest denominator in the sense that that it's totally raw data I mean it's the probably the rawest is not a good way is not a right word but it is the rawest data coming from the market because it is computing things at real time on a tick by tick basis so even in one second if you have a stock like Apple for example in one second it might be ticking several you know maybe even hundreds of times and so all of those are being calculated so the ticks per se if you look at the chart and I can show that to you the ticks per say is not very helpful in general but then what you can do is do a cumulative ticks so which means for as soon as the market starts the up ticks in the down ticks are being calculated and then there is a cumulative total that is running as long as the markets are open now this is what really becomes extremely helpful and gives you a perfect indication of the market bread now some people may have attended this webinar about two or three weeks ago couple of weeks ago I think and we did you know we did you know look at these cumulative ticks as well now one of the things and of course you know I've been looking at it also since then and one of the things that we have to think about the ticks are see the ticks start calculating at the beginning of the market so when the market opens and so you want to let the ticks go for some time and for some time I mean like half an hour one hour and because you need to let the market bread start showing itself and so what we did in the earlier webinars we took a couple of trades at the beginning and that's actually the wrong thing to do you have to wait for some time so that the tick information starts developing and starts building and starts developing a pattern or a trend and that's when you want to get in so this is what we're going to look at today the ticks indicator and then what we'll also look at is something called a custom RSI so if you've heard of the RSI indicator if you've seen it they generally tell you when a stock is overbought and oversold so generally considered to be a reversal when it goes into the overbought at the top you expect some sort of a reversal and the same thing at the bottom but this custom RSI has been customized to depict bullish and bearish zones so then it starts becoming persistent so what I mean is you'll see it on the chart that once it gets into the bullish zone you know it could remain there it could remain there and that tells you to remain in the trade now not all the time will it remain there I mean it all depends what the market does but when it remains in a zone when it's persistent that's when you want to stay in the trade and then the custom RSI works for any time frame day swing all on the term and it works on any chart currency commodity stocks so it's a very helpful indicator so finally I just want to leave you with some links here this is of course going to be recorded so you don't need to write this down but you know you can if you want to write it down that's fine but if you need more information there's a YouTube playlist for the custom RSI there's a YouTube playlist for the SPX algo itself and of course this is my email and I'll come back to this a little later and if you have any questions you can you know you can send me an email here alright so that's as far as the presentation is concerned what I want to do is now we got one minute left in the market so what I have here you can see if there's a day trades column and there's a stock watch list over here so this is the proprietary day trading algorithm that I'm talking about which tells you and it looks at the pre-market also and so you can see that you know some of these are all in the pre-market right now this is all a five-day five minute chart except for the slash ES which is a one-day one-minute chart and I'll come back to discussing that as well so on a one-day one-minute chart you can see that based on this price action the ES has moved into the bullish zone so this is the custom RSI that you're looking at over here and whenever you see the blue that is the bullish zone and whenever you see the red that is the bearish zone and what we'll do is we're going to expand this and we'll walk through how this indicator works and then we can we can get a better idea of what we're talking about the markets are just about to open about 15 17 seconds left so what I'll do is let me maximize this cell because this is really what we are looking at over here and I'll also maximize the screen so you can see clearly so once the market starts you will see that this ticks that the tick SPX is the tick cumulative tick that I'm talking about and there goes the market and so this is a one-day one-minute chart and what we are going to see now as the minutes go by you're going to see the tick developing and so this is going to be interesting to watch and the ticks like I said it gives you the up ticks minus the down ticks so you can see the first tick is starting to develop at negative 30 now the numbers per say the absolute numbers are not important because what you want to see is the trend and these numbers can go anywhere they can become minus 500 they can become minus 1000 it depends on what the you know up tick minus down tick value is and that can be anything so we'll wait and we'll see how this thing is going so you can see that in the pre-market the ES went up over here so if you're really I mean if you're day trading yeah you know this could be a day trade sure why not but you don't want to get into these small or scalping type trades you want to wait for a trend to develop and that's when it makes it makes the best sense so now you can see the next tick is developing at minus 100 the blue tick just says it's the first tick of the day and so that's the color and now you'll see if it's if down ticks are developing you'll see it in red and if up ticks are developing you'll see it in blue in blue also the ticks is the indicator that looks at the market internals the custom RSI it simply looks at price action okay so this is purely price action so here you can see the customer aside now going into the bullish zone over here and but the ticks are at negative 100 so you know this itself tells you that okay the RSI from a price action standpoint it's bullish okay but you want to see both whether it's the RSI or the other ticks you want to see them synced up and that's when it makes for a good trade so let's just wait and watch this you can see the second tick is developing and let's see what the value comes okay the value was negative 151 you can see the value over here of the latest stick so the latest stick is negative 151 and now you can see the price action on the RSI also dipping down one of the things is when the market just starts all that pre-market pent up demand or supply is coming out and rushing out and that's and that's precisely why you see volumes go up like this after the markets open and so there is a lot of pent up stuff that is coming into the market at the market open so on the SPX intraday ticks trading tick based trading you want to wait now not just for this reason also for the previous reason you want to let the ticks develop for some time and then you can see a much better trend going on with the ticks so as the ticks are developing here what I want to show is what do I mean by this ticks developing so here we are looking at a one minute chart because the markets are just open and we want to get a pretty quick feedback loop on to where the ticks are going now you can see the ticks are down to negative 216 so obviously there is a slight bearish sentiment going on however if you look at the ES futures it's up only 0.25 so it's not that bearish as the ticks may seem but this is what I'm talking about when I say it's all the pent up thing coming into this so while we are waiting for these ticks to develop what I want to do is first of all change this to a five minute chart right now and so we can go back and see what what you know on on these previous five days at least what exactly happened and so what I'm going to do is I'm going to go back here and go to each of these days now the ticks will only work when the markets are open so and you know the futures trade almost 24 hours but you're not going to get data when the markets are not open so here this is yesterday's price action and this is yesterday's tick action so now this is a five minute chart so I think once the market opens and it's gone into the first 30 minutes to one hour that's when you want to change the chart to a five minute because the five minute gives you much better perspective of what is going on with the internals and so if you looked at the market yesterday I think the futures were up a little bit about three four points but then the markets ended down you know 10 points and you can see that even though the markets tried to go up at the open it the ticks never really you know caught up you know in a whole lot of way even if you can see the biggest the highest tick here was positive 161 and so that itself will tell you that yes the market is trying to go up but the ticks are not responding and of course the custom RSI only tells you the price action so really you want to look at the ticks to understand what's going on and then sure enough on the five minute chart once you see two or three red dots or two or three green dots developing that's when you're looking for a trade so you know if you give up the if you discount the first half an hour to one hour what what you're seeing is somewhere here there's a you know a persistent trend developing and so you know if you took the trade let's say over here when the SMP when the ES was at 3014 I'm looking at the level on the right hand side somewhere here you know you can write this nicely and you can see the ticks are going to support your trade and you can see that you know at some point and the RSI also support RSI is telling you stay in this trade it's still going bearish when the RSI turns around that's when it's RSI is telling you only price action though so even though the ticks are going down RSI is saying hey there is some you know change happening with the price action right here and so you want to get ready to get out of your put trade at that point and then it's just it just chops around here and there it briefly goes into the bullish but the ticks are still negative here the ticks at this point are still three you know negative 392 and then another bearish move comes and then there is a persistent move of the of the I mean there's a persistent red dots coming in and the RSI goes back into the bearish zone and then from here at least until here you have a small trade there so each of these are five minutes so you know both of these trades would have lasted about half an hour each this one would have been very very profitable it would have been nice this one would have been okay not not that bad but what you want to do is wait for these opportunities and take just one or two trades during the day and that's you know that's that's the best way to take advantage of day trading at least on the S&P so now let's just go back one more day and see what happened to the previous day so this this would be the trading action on Monday so once again at the open it the markets crashes but then the ticks are not supporting that the RSI is telling you yeah price is going down but the ticks are saying perhaps in the in the in the future as you can see the futures building up and so the spent up demand actually to buy is coming in and you're actually seeing green dots so once again these two are not in sync so you don't want to take the trade and then it starts going up however the RSI is still in negative as far as price action is concerned so this is a little choppy action over here and so you may not get a trade at all until you perhaps you come over here and you see the RSI also also going up the ticks are now slowly but surely they're moved into the green into the positive you can see now they're whether it's positive 217 and so somewhere here you have a little bullish trade here and that's probably the only real big trade of you know of Monday because you want to see both RSI as well as the tick SPX sync up and you also want to see some kind of a persistent trend now if there's just one dot in the middle of green dots that's fine but you know if you see two or three dots then it's time to get out of your trade so if you were in a bullish trade over here and you see these two dots it's perfectly fine today you know to come out of the trade it's not a bad you know deal but you can see that the RSI still remains in bullish it just briefly dips over here and then it goes back into bullish so you know from here a trade could have lasted till here you could have but at any point if you were to take off you would be taking it off at a profit and so and that's perfectly fine so this was probably the you know that kind of a day over here where you had this one trade and you could have taken advantage of that let's go back one more day here and see now here is where you get a really nice trading opportunity as you can see you know the ticks when the market starts it actually starts going down a little bit and here some more but you can see the ticks are not giving up the ticks are still a zero or above only here briefly it goes below the zero line and so that itself should tell you the internal breadth of the market is quite strong right there it's quite strong and so you want to wait for the price action also to get synced in with these ticks and that's when you can get a trade and so here you can see that the price action wise there's not a little bit of choppiness but where you get the real trade is right here and that's when you see some persistent activity you see persistent RSI and that's when you can stay in this trade from somewhere here all the way into the close and it closes right at the top it closes right at the top so this would have been a great trade on this was what Friday I believe so this would have been a great trade and only one trade for the day that's all you need because if you can ride away from 2011 on the ES all the way to about let's say 2016 that's five points on the S&P and if you had like a 40 delta option that's going to create a lot of profits that's going to create a lot of profits so that's really what you'll be looking at in terms of how to interpret these indicators and how to take the trades I don't think the approach should be that you get in and get out the approach should be you need to wait for a persistent condition and when you can see the ducks lining up in terms of the ticks in terms of the price action in terms of the RSI that's when you go for a killer trade I mean even if you had a five contract position on this trade here I would say you'd have made a probably about anywhere from thousand to a fifteen hundred dollar trade just with five contracts okay so that's the kind of opportunity it is you have to wait for the right time rather than trying to get in and out make sure the price action make sure the ticks are becoming persistent so what this is telling us here is here as the markets are going on through the day the ticks are improving going higher that means the market breadth for you know maybe 300 out of 500 or 400 out of 500 stocks in the S&P are all ticking higher and so this is a persistent move in the ticks and so when you have that kind of strength in the bread then you have a great trade whether it's to the upside or downside it doesn't matter but you need that strength you know in the bread and I think in the previous webinars what we tried to do was catch the open and that's not the right approach for this so if you've seen a recording of this before the right approach is you wait for half an hour one hour let the ticks develop let the data come in and then you start seeing the strength coming into the market or the weakness coming into the market because obviously we are agnostic as to which way the market goes from a day trading standpoint as long as we can make profits on either move whether it's a call or whether it's a put we don't care as long as we want to make profits on that particular day so I'm not saying your long-term portfolio and things like that obviously that all depends on each one's you know individual portfolio but I'm just saying on from a day trading perspective you want to get into a profitable trade whether it's to the upside or to the downside let's look at this this is the last day in a five-day sample market starts tries to go up no it's weak it comes down then it tries to go up again no it's weak so this is a choppy market this is a very choppy market if at all there was a trade it's probably right in the last one hour over here where you know there's some kind of persistent activity starts and even in this you know a small trader five contract position can make about five six hundred dollars easily and then it remains persistent through to the close and so that probably is the only great trade you could have taken one on this bearish you can see this one is pretty persistent over here however what you're looking at the ticks is it only two dots go below the zero line so which means there is some strength in the market so that's what you have to be aware of however if you wanted to do sort of a short-term very quick trade you could have done one over here and you would have made a good profit actually but the strength of the market is telling you that it you know it's more towards the upside rather than the downside okay so now let's go back to our current situation in the market and let's see what's going on so this is a five-day chart so i want to move back to a one-day chart because when the market opens you want to get a lot more data points first and so now you can see the ticks are going down the ticks are going down however the the price action is still you know it's flat so at some point these ticks are going to make a statement in the sense that if the market internals are continuing to go go down at some point the price will start reacting to that so on a day like today you want to get ready for a put trade at some point they're still too early in this the market has just opened it's only been 13 minutes since we since the market opened so it's too soon you want to let this data come in and the data is very important for you to make a judgment as to okay which way are we going what are we trying to look for so if this kind of tick activity continues on the one-minute chart for another half an hour or 40 minutes then you really want to get ready for a put trade because at some point the price action will will stop being flat and it's study it's going to start going down because the breadth of the market is weakening so there is another way we can look at breadth let me just go back and i'll show you the day trading algorithm for for stocks and here we can see over here right now it's still showing bullish because of price action here but once again this is also data that's just coming in so as of now things are you know okay the ES is is flat and you know stocks are also reacting in a similar manner however once we see that the ticks are actually going down like this at some point it's going to start impacting the index also it's going to start impacting these stocks and you can see the day trading algorithm you know this is once again a custom algorithm that looks at price action three different moving averages momentum it also looks at money flow so it looks at price and volume together so this is also another algorithm that but this is for stocks whereas the ticks is only for the index okay so now you can see some bearish action coming on this so let's go back to our ticks program and let's maximize this and just see what's happening here so i'm just going to pause it here it's being recorded so with what we want to see is the price action also go down which means now their custom RSI should also go into the bearish zone we need to see some you know some kind of degradation in the price and so that's what we're going to be looking for so i'm going to zoom in a little bit here and leave it here and i'm just going to get a bottle of water i'll be right back okay so now you can see the price action is going down and that's because the internals are telling you so right now if you see the tick value of the last tick it's negative 884 so that's a pretty weak you know weak internals there and the question is you know is it going to remain like that you know how much you know how much it's going to remain so here you can see some higher volume coming in so you know also look at your general technical analysis stuff so some higher volume coming in here maybe you know it's building a support zone we don't know so in in in any case you don't want to take a trade in the first like i said a half an hour you need to let these ticks develop and then see what the trend is and then you want to go there because this data has to come in after the markets open so i'm sensing there is a slight bit of support here because of the higher volume and and it closes over there but it's too early to say you know we just need to give it we just need to watch it some more so let's watch this here so once again some higher volume came in on this and again it's telling me some kind of a support zone is trying to build over here and we'll have to see what the ticks are the ticks are going even further down so unless the tick value changes this whatever little support zone here is probably not going to hold because if the ticks continue to go down then it is going to be a bearish day at least bearish morning let's say because nothing is permanent i mean things can change any time but at least you want to catch you want to catch the trend you want to get a good grasp of what the internals what the strength or weakness of the index is and that's what makes for a great trade and so we're going to have to wait for that so i'll you know i'll just pause it here let's just watch here so this bar is just about to get over let's see what the tick value comes up and that should give us as i said these two bars here look like a support zone was building with the higher volume because the price action also came to the middle of the bar so you can see a slight green tick developing over here and so now you can see it's negative 964 so it was negative thousand plus so now it's become negative 964 so there's an improvement in the ticks from a relative standpoint and you can see the RSI also coming out of the bearish zone and moving into neutral territory so anything between the 40 and 60 is neutral territory and then once it goes above 60 it's in the bullish zone so it was there in the bearish zone for a few minutes and now it's come back into neutral and so let's see where things go so the best way to use these ticks and the customer RSI is or at least for the SPX intraday trading is to let a lot of data come in so for the first half an hour to one hour you just want data to come in that's what defines the state of the internals of the index for that day now granted anything can always change of course but what you want to at least see is some kind of a persistent state and that's where you can get into the trade at the end of the day over trading is not a good idea and so especially when you're day trading because you know there's commissions there's there's a lot of noise in terms of the signals and in terms of the chart action and the price action so the best approach for day trading at least the S&P index is you wait for this kind of information and once that is set you take one good trade and that's enough for the day I mean that's it you know you're done one good trade a day can just on five contracts can get you anywhere from five to seven hundred to all the two even two thousand or three thousand depends on the move obviously but all you need is that one good trade now granted you know for some people five hundred or thousand may not be much but you know you might have a large account that's okay you can put your size according to your account and you know do it but the point is you want to wait for that one good opportunity when it comes to these you know trading based on market internals so you can see a little bit of choppiness coming in again on this bar it got shot down all the way to the bottom and so let me see here yeah okay so let's see how the how the ticks develop a slight negative you know a red dot is developing but that red dot is not fixed yet it's only after the bar is over that it goes back and corrects the reading and that's when you know what the real tick value was so once again let's just watch this so you can see on that previous bar the tick value improved a little bit that's why you see a green tick a green dot and so there was a slight improvement the RSI still remains in neutral territory so at this point there's really no trade that jumps out and once we get to the after once we finish the next five minutes what we'll do is we'll shift to a five minute chart because the five minute chart will give you much better perspective so you can shift to the five minute chart anytime after 30 minutes to one hour and that'll give you much better perspective the one minute chart can be a little noisy but at the market open you want to see the one minute chart because you want a quick feedback loop as to what is going on in the internals and so that's why you choose the one minute for the first half an hour 45 minutes one hour whatever depends on the market action but what we'll do is today we'll shift to the five minute chart once half an hour of market open has happened just a quick comment as you can see there is a significant improvement in the ticks it is still negative however there is a significant improvement in the ticks it was negative 1,000 now it's negative 676 and you can see the RSI also in terms of price action is trying to move into the bullish zone let's see if it gets there so while we are watching meanwhile if you have any questions please feel free to type it into the chat box I'm here watching the charts and so I can take some questions while we are not well I'm not talking about anything so here you can see the it was negative 600 it's gone to negative 700 however it is choppy so there's no real trading opportunity yet the only one that could have been was this one right here but that was too soon I mean all this is a one minute chart and so you know all this is happening within seven or eight minutes and so that's just not enough for of a data point and plus it's too close to the market open and so you want to let the data come in first okay so we are into the first half an hour of trading so I'm going to change this to a five minute chart and let's see what that looks like because on a five minute basis the numbers will change you know what the ticks are so you can see on a five minute basis the ticks are actually improving okay although this is in bearish zone because of this kind of a price action the RSI is showing bearish however on a five minute zone on a five minute chart you can see that the ticks are actually improving from where it was and so and you can see from the price action also we are still very flat we are still very flat so on a five minute basis we are just negative 105 ticks at this point so it's still a flat market I don't think we have any good trading opportunity yet so we'll just wait and see how this develops seems like it may be just a little too soon for the five minute chart I'm going to go back to the one minute and let's see if we can get better some better perspective here so on many days you'll find that the first half an hour gives you a lot of data and that's enough and then on other days it may not and so that's how the markets work you know on a daily basis the market you know plays out a completely different story and so from a day trading standpoint you want to try to understand what is what is the story for the day because that's really what presents you with the trading opportunities so even from the one minute standpoint you can see the ticks are improving there was a slight bit of a down tick here but as you can see it is improving because we are coming now from a negative of almost a thousand ticks somewhere here and now it's negative 684 so the market is trying to move to the higher side but the ticks are still negative so at this point what we can what we can sort of you know come to a conclusion is that okay it you know the internals are still looking negative however there could be some improvement coming but in terms of the price action the ES futures is just down 1.25 which is not a whole lot okay now you can see the price action is showing that it's getting into bearish the ticks are also moving down and now we have quite a bit of data points here not quite it's just about 40 minutes into the trading day so I say to stick with the one minute chart for now but this was a very high volume bar and it took it went all the way down so that is pretty negative there that is pretty bearish there but let's wait and see how things play out here okay let's just go to a five minute and see from that perspective yes we are entering into bearish mode definitely all right so now you can see that it is getting into bearish mode all right so this is the time you can probably take a trade this is persistent here and you know the ticks are negative and it's going down further so you can see that you know this could be this could be a potential trade I'm not going to take the trade but I'm just going to show what we can do if this were the case because if you come to the SPX right there and of course this is a big round number here you can see you know the 3000 level is a big round number there options to come up and if you want you can go in for today's expiry if not we can go in for this the 19 July and what you want to do is take about you know anywhere from a 30 to 35 delta option right here I'm just going to put this here this is not a day trading service but I'm just going to put this here if we were to take the trade so on the five minute chart you can see that the tick is negative 356 okay so that's what we're looking at and I think this would be a this would have been a good point to take a bearish trade let's see how it plays out now things can of course always change and so you want to be prepared with your risk management and trade management principles you know as well what you can always do is you know convert it to a debit spread if it's not going if it's not going your way and then if it still doesn't go your way you can convert it to a credit spread you can at least come back to break even on the trade so the five minute numbers give you a much stronger perspective okay stronger means much more reliable the one minute can be noisy but the five minutes there's a five minutes worth of ticks going into the s&p and so that's a very reliable number now you can see that the this five minute bar is going to come to an end and so we are at negative 356 and let's see what happens to the tick value just because it you know improves that doesn't mean anything because it's just one bar right now we have three consistent red dots here and let's see how this one ends right now yeah you can see it's going down it ends at the very low of the bar with a higher volume so a lot of selling here definitely and you can see the tick value on the five minute has gone to negative 549 now it's 549 so if you were to look at your option here you can see from 460 it's gone to 530 so on a five contract position that's about 400 dollar profit right there okay because we you know if we we had gotten at 460 it's now at 530 so just trying to show you how these trades can become profitable right there now what we want to do is you want to stay in the trade because the price action is telling you that it's going bearish now if the RSI starts to turn around and if you have a decent profit you want to book it at that point because you don't want to mess around with a nice profitable trade so either you take off half of your position whatever it is but if the trend is changing and you have a profit you might as well take off the profit because you can always get back into the trade if at all the you know the original trend still continues then you can take off and go back so here once again now it's going down some more it's at 560 there there we go this is a this is a five hundred dollar profit right there okay on five contracts let's just keep an eye out and see if there's any change now this is where I would this is what I mean it it keeps you in the trade as long as the customer RSI is not changing direction it keeps you in the trade and you can take you can out of the five contracts you can certainly take off two and book some profit that's never a bad idea at all but you can also remain in the trade for longer remain in winning trades for longer if the trade is not going in your favor then at some point you'll have to do some risk management and trade management so now you can see the price action is trying to change the RSI is still looking down but let's see how this bar shapes up here and you can see the option price is giving up some value there so hopefully you'd have taken off two or three contracts and booked profit on that certainly higher volume coming in on this bar right there you can see even the previous bar was quite high volume this one's going to be even more than that and the RSI is pointing down so which means you still stay in the trade now certainly you can take off partial profit there's nothing wrong with that but you're still in the trade at this point unless things change so you can see we are back to 560 on the option price which is a $500 profit but you're still in the trade because everything is pointing downwards the custom RSI as well as the ticks are pointing downwards and some big volume coming in here most of that looks like it's selling volume because it continues to push it down okay so that bar is over let's see what the tick reading comes negative 563 so definitely bearish the RSI is still pointing down and we have about a $600 profit on the trade once again a chance to you know book a little partial profit if that's what you want to do or if you know if you felt like that's good enough profit for this trade then that's perfectly fine because we've been in this trade for I mean you would have been in the state for about 10-15 minutes already and at some point things will change and so that's just the nature of day trading very rarely do you see things just go off in one direction and stay there so at some point things will change so you do want to book your profits every now and then so this volume is very high okay only the open bar is more volume than this so I'm sensing it may be building a support zone here also but let's see the ticks are negative 563 the RSI is still looking quite bearish yeah in the bearish zone so as of now you could still be in the trade let's just for perspective sake let's just go back to a one-minute chart and see what that is telling us okay one minute says that we are still in the bearish zone however you can see that the RSI is turning so this is where you know shifting from a one minute to a five minute becomes helpful you can see on the one-minute level this was that big volume right there and this is definitely forming a support zone in my opinion and so now you can see on the one minute the the RSI is coming out of the bearish zone so if you were still looking at this if you were still in this trade you would be out by now and you know because this is moving higher and so the one minute gives you a very final perspective that as the five minute gives you more you know it gives you a longer term perspective but if you want to see on a minute by minute basis what's going on with the internals or with the RSI you would go you would drop down to the one minute so shifting between the five minute and the one minute can really give you much more insight as to whether you need to stay in the trade or you know whatever the case might be but once you go one or two hours into the trading day then at that point for the most part you should be sticking with a five minute chart and only drop down to the one minute when you want to get a closer final perspective of exactly what's going on so we are still in the first hour so you know sometimes dropping down to the one minute will be helpful and that's what we are seeing here so you can see that there you know definitely a support zone was forming here so I'll go back to the five minutes but by now we should be out of this trade you know if you're still in you should be out of this trade now I'm not saying that it cannot go down further it can okay so that bar got over let's see how it looks from a one minute yeah still some bearish you can see so this is not you know it's not it's not able to sustain the up move and let's just wait for the tick number here but now we can see on the on the one minute you can see the ticks going down and it's actually quite a quite a negative value negative 1400 like I said the absolute value really doesn't make much of a I mean have much meaning except for you want to see where the trend is going and I think in this case it's still negative but we will be out of this trade because once you see this then you know you're going to be out of this trade okay so let's go back to our five minute and okay folks we are approaching the one hour and so this is how we would look at the SPX market internals and see how to date rate so we'll cover different things on different webinars next week we'll do something else but you know as you can see that you know these can be pretty pretty helpful for for day trading here so I will go back here just one more time so you can see the swing trading the market based internals this is what we were looking at this algo is is available for sale the custom RSI is also available for sale there are various things I mean as I said there's a medication so if anybody's interested you can just send me an email info at option tiger.com and we'll take it from there so have a great day everyone thanks for coming and I'll be sending out the recording sometime later this evening thanks