 Hey everybody, this is Brian and this is a quick video this actually could become an entire video series if people start leaving Comments saying hey, we want more Basically, I'm an amateur Options trader now. What does that mean? Well, I'm sure you've heard of the stock market stocks have things called options where you can both Buy and sell contracts basically Again, I'm going to explain this very poorly because I'm an amateur. I'm not a professional stock wizard or anything like that What we're looking at here is think or swim This is their desktop platform and I realize this looks like sandpaper on eyeballs, but we're going to break this down I've had a lot of feedback from people saying what is your methodology? What are you doing? Well, what we're talking about is SPX zero DTE Meaning we're going to place an option that expires the same day. So what we're doing is we're selling a contract But it has to trigger the same day. Otherwise, we just walk away and keep the money That sounds really cool, right? It's taken me about a year and a half two years to really figure it out This is not a unique thing. There are millions of people out there explaining what I'm about to show you I just do it a little differently And I'm trying to cut out a lot of the advertisements and fluff and You know buy my course kind of thing because I have no intention of doing that right now All right. So first off, what are we talking about? We're talking about making money and you have to keep detailed logs So paper trading is fake money And I started with ten thousand dollars and I've made twenty two thousand dollars now I want to throw a big flag out in the field right now Paper trading is not real life. I'm just going to repeat that. It's not real life at all This is simulated meaning we're playing with a computer algorithm I'll explain that a little bit more in depth, but basically let's dive through the details We're looking at SPX and notice I'll also have vix down here vix Or vix is the fear index. So this is kind of the opposite here. So when the vix is going up SPX is going down. Let's just zoom out here. So we're going to go to the There we go. So you can see this is the chart and it's kind of choppy and let me just get rid of all these drawings And we're going to do this whole thing from scratch here. I've already got a trade Live, but I want to walk you through the methodology. So we're going to clear that drawing set get rid of all that nonsense And let's walk through this. So here we have our chart here We have what's called a TTM squeeze and here we have an rsi and I'm going to walk through each one of these These are called studies. Now our charts. I just have a candle and let's go ahead and zoom into the one day one minute And you can see how we've got these other little lines What are these? Well, these are studies. So if I click this studies thing Actually over here again, not a professional The studies I have here are the moving averages two lines. I just have the defaults 918 zero simple Then we have the TTM squeeze and the rsi That's how you get all of these things on here So what really is this if I zoom in here are the two lines You can see there's a top and a bottom and they show you direction or the implied direction It's not a perfect science, but it tells you hey When you see these things cross like this, that means the direction is going to change and you can see sure enough It's going down the little pink lines on top And then when it crosses it's because the direction is changing And that you can I think it's called death cross and golden cross I'm not a financial wizard But the death cross means it's going to go down the golden cross means it's going to go up And there's probably better examples in this chart than kind of a down day here Yeah, so here's a good example crossover another crossover So it just tells you it signals you when the market is changing a direction Obviously green candles mean up red candles mean down you have these wicks which they're that's a whole science in itself Don't get pulled into that too much And then you have this TTM squeeze and this actually took me a minute to understand what's going on here. It looks pretty But what's it really signifying if you look at it say this blue here is going up as the stock price is going up As the two lines are going up, but you notice it starts changing color Right where this dark blue bar is is where that red line is meaning It's going up going up going up and up. We're probably going to change direction And then nope it faked out and then it just keeps going up again And then you get a couple bars signifying it's actually changing direction and that correlates with these red bars here And now it's going down once it hits this threshold. You can see it's actually going down further And the colors change again dark red and then when it switches it goes to yellow and you notice how It's switching right around here and starting to go up So the TTM squeeze is another visual indicator. There's a lot of mathematics in the background that show you What's happening? So you can kind of see relative to The price action of what's going on here in a choppy Little segment like this where it's I mean, how do you even begin to trade this up down up down? Well, that's why you use the indicators. You can see these two Lines are still strongly moving upwards even though you've got these chops in the candles And the TTM squeeze is still pumping upwards Once we notice that the squeeze is going down Then the stock's also going to start going down and of course the two lines signify that as well Down here is rsi and again If i'm just chunking through this as fast as humanly possible and you don't understand it This is not a beginner's video. This assumes you have some options trading experience I'm just explaining my methodology. I can make a full video series if you want me to Um, so rsi is just the relative strength basically and I just keep these default We have 70 as high 30 as low and what this is saying and let's just find a snapshot right here You see how it's up And it's also up here on the TTM squeeze and our rsi is also up. So what do we have? We have three indications that this is high So rsi means it's usually not going to go too far above 70. So this is at 62 and change It's relatively high meaning there's a good chance. It's going to go down soon and we can just kind of Scroll backwards in time here and you can see how All of these indicators kind of work beautifully together You've got the two lines with the TTM squeeze and then you have this rsi. You notice how it does jump above 70 right here TTM squeeze signifies. It's going to go down rsi confirms. It's going down. So that's how you kind of trend I say I should say get the general trend of what's going to happen here Now that you understand that you understand the basic meh got tongue-tied basic methodology to this So we're going to zoom out to the 15 minute. This is my morning routine here And what we're going to do is we look at just kind of a day This is the start of the day I should say previous day closed and there's the first 15 minute candle So here's our previous day and this is where it stopped off at and what I'll do first thing in the morning Is I will just go ahead go to drawing tool and do a price line here And just draw a line doesn't have to be perfect. I just make a nice red line saying hey That was previous day Market opens up and I wait for the first 15 minutes if you're confused you can see down at the bottom here is the time 945 So I wait for that first 15 minute candle and I just draw a line here Again, this is not a unique strategy There's other channels that probably explain it better than I can but what we have now is a range a day range Meaning this is where it left off yesterday. This is where it's starting today And if it was higher, I would have done the candle up here But you get it you just want a range and then in the center of that range I'll do another line I'll right click edit and we'll make this one yellow Why am I doing this? Well, there's a concept called mean reversion meaning It's going to try to find the center. It's going to constantly battle to try to get up here It's not always true but you will see that more often than not where it will kind of just bounce up and down around this line and Today is really not the day to demonstrate that because it just keeps going down down down Now that I have these I have a general direction of which way I think the market's going to go So here is our bottom 4255 and it's trending downwards again. This is not a perfect science, but This is why we keep very very I want to say detailed logs And I've only lost I think one trade it was a max loss and honestly that was my mistake I didn't really even follow the guidance. I just gave you I took a higher risk and I ended up paying the price So that wasn't fun But uh, I also try to factor out the percentage. Um, a lot of people will tell you Try to take 50 and I'm going to explain that here in a second but What we're really emphasizing is you use the indicators the lines along with the tpm squeeze and the rsi to get a general direction Off the first 15 minutes of the day. So the first 15 minutes showing this is going down And generally that's exactly what happens. Let's just zoom out here So you can see it's going down for the day Now yesterday was a good example of when this just simply doesn't work You can see it started right left off here. It started here and let's just draw a trend line right here Completely just disregarded that went right up. So that would have been a max loss day Now this is where risk management strategies really come into play which is critical for This specific strategy here Point being now that we've got a direction we would enter a trade and I've already got one entered But I'll show you how I would do it I don't go to the trade tab because this is rubbish. It doesn't really tell you anything Um, let's just about some of these I actually go to the analyze tab and I go to add simulated trades. So what this does is it allows you to see All the goodness in here with the bid ask and all that that's probably too many of them now Bid and ask is great. It tells us what we're going to get but it's not really being super helpful here in terms of What we need to see on the screen. So Let's go ahead and click this and I also want to customize this. So I want to see the probability of in the money And probability of out of the money again. This is not a beginner's video at all But what this does now is it shows us on the screen very elegantly what our probabilities are So you can see right off the bat here We've got these percentages and let me just clean this up because my screen's a little bit smaller here So we're going to get rid of this probability of out of the money All right, so our probability of in the money is gone So now we just have the probability of out of the money So out of the money is our chances of winning the trade. We want this to be out of the money Meaning we want this to expire worthless because we're going to collect a premium up front So you can see the further away we go the higher our chances, but The lower premium we're going to collect So if I went right here, I would get 9.7 and I could go analyze cell and a vertical And go to my risk profile and you can see I would collect $4,050 versus losing $6,000 and that gets a little bit confusing, right? So let's just Only show my trade What we're looking at here is the risk profile the showing us very clearly we would be Getting $4,000 in credit and potentially losing six grand and we can adjust our actual numbers here And that will scale it down So I'd only want to do one contract We would be gaining $435 and potentially losing $580 This is you know a 50-50 shot May the odds be in your favor because you know when you look at the chart it can go all over the place So let's just go back to our analyze. We're going to go to add simulated I typically We're late in the day here, but typically at market open. I'll shoot for about a 75 ish Um And I'll just go right click Analyze sell and then vertical now if we were going the opposite direction like if we thought the stock was going to go The opposite direction go up. We would go over here. So we would say Right about there right click Analyze and sell vertical. So all we're doing here is just credit spreads anyways point being Pick the one you want based off the direction you want. We're going to analyze a Call vert or call vertical because We want this thing to go down And if we look at our risk profile sure enough The further down it goes the more likely we are to make money further up more like we are to lose money And then we can infer our break even right here, which is 4228 from there I would just right click confirm and send when i'm happy make sure everything on the screen is the way I want it And then send it off Once the trade has actually been filled you can see I've got an active trade here That's when I would go in and I would say okay. I want to know where this thing breaks even so Let's look at my fills for the day here We got spx and this is at 40 to 40 Let's double check that here This is kind of sandpaper is on eyeball. I don't like this at all But basically you have your pnl opening your pnl for the day Open is what's currently open and then for the day is just a wrap up of the entire day So you can see I've already done a trade earlier That was my 42 80 and these are zeroed out Pnl is open is zeroed out So my pnl here is not zeroed out. These are the active trades. So it's 42 40 and 42 50 This is where I would typically go to the chart Draw another line just anywhere Right click it edit properties And I set the color the style the width and what we say that was 42 40 I just want a visual representation on the screen of where our break even is on this trade Which is this dotted line Because we're selling a call vertical. We want it to be below that dotted line And let's just zoom out here because this just looks horrendous And now you can see real time What's going on here? We have our range with our middle We picked a direction and it appears today We were actually successful in picking that direction and we have our break even on the dotted line So anything below this line is pure profit And if we go to our analyze tab Make sure that our current options are checked. You can see this is where we are Potentially making 250 potentially losing 750 because that was a much smaller trade This is where risk management comes in here. There's two things you want to really make sure of one is size Your trade appropriately. I'm only risking 750 dollars. You're saying only But look at the account size. You have to really look at how much money you have available So 750 for this account really isn't a huge deal And 250 Is what we're gaining now This is where it gets confusing. You can do two things. You can either let it expire worthless meaning do nothing And as long as this price stays below this line, you're going to collect that entire 250 dollars sounds really good, right? The problem comes in the markets are not always your friend as we saw from yesterday where Yesterday was actually a profitable day for me And that's because I got out early it started here And I Got out about here. So it was profitable. But then the market immediately shot up and had I stayed in Would have been a max loss day Max loss is not fun because then you have to figure out how to get the money back The point I'm trying to impress here is the more time you are in the trade the more risk you're assuming Because anything can happen Um, for example, yesterday, I think ellen musk said he was going to buy twitter and then the stock market rallied Which is why that just shot up So I'm not happy with this being here. I want to take my money and run. So what I can do is flip to the monitor Let's look at whoops Look at spx and you can see I have 180 profit Open meaning I could make 180 dollars right now. So what a lot of Zero dte spx traders will tell you is take 50 percent. So it would be 250 divided by two I actually don't like doing that I will look at A is the trade going against me if it is I'll immediately just cut my losses and sell it Even if I take a smaller loss rather than that entire 750 Which don't always count on that because the market can move against you very rapidly But this is why I use a spread because I have a defined risk And a defined reward. It's not ever going to go over 750 In terms of the amount I'll lose But it also shouldn't go over 250 the amount I'll win Again, you're going to see people in the comments who are way smarter than me explaining. That's not actually true. You can There are instances you can lose more and make more even though you have your risk defined But this is a good definition of defined risk also This you want to note that you typically don't want your risk to be three times more than your reward so Three times this Is about that. So we're about one to three ratio here, which is pretty good Enough rambling what I want to do here is I want to right click spx. I want to create a closing order and I want to buy Because we're selling I want to buy to close And that brings up this screen again sandpaper on eyeballs I don't know if it's because I'm on linux or what but the estimated price is not popping up It may be because I'm on spx and not an actual stock because spx is an etf Anyways point being we have the mid And then the high now there's a lower but basically what this is This is the the spread that people are looking at right A lot of times mid will actually trigger and it's going to put you right around mid And you'll see this number adjust around. So if I just want to sell it right now As is I could confirm It's going to cost me $50 plus the commission. So about $52 But remember when I got into this trade, I already collected my premium. So I'd be walking away from this with about 207 dollars So you can either take your profit and run Or you can go in here and you can adjust this and what a lot of people do will do a dot 10 And what that'll do is ten dollars plus commission of fees and you may be going why would you do that? um It's personal preference. Um, a lot of people remember you want to get out of that trade When you have profit because the longer you're in the trade the more risk you're assuming and at the end of the day Let's just go back to yesterday here The market can move against you very very rapidly I mean, this is just went straight up and it would have been a max loss. So This is why you want to make sure you can get out of the trade So again, let's just go back here And let's create a closing order And I'm going to do this as a dot 10 Now what I'll also consider doing once in a while is what's called an oco or one cancels the other Meaning you can have two of these bad boys in here So let's go ahead and create a duplicate order And let's just do a stop Now a stop This takes a bit of explaining but we can do a stop limit limit Whatever we want to do So if we do a stop limit and add a specific mark, what does this really mean? Well, now we have two different Orders we will be doing but one of them will trigger and one of them won't And this is where we can really decide where we want to be. So for example, I could say I want this at 25 Doesn't really seem to make a whole lot of sense. Honestly when you look at it, but Let's adjust this so it's actually what I wanted it But now you can see you have two different orders So you'd have you walk away with ten dollars or you could do your stop loss of 25 dollars Again, very very fictitious example. I tend to not mess around with stop loss When I'm doing a spread because if you look at your analyze tab, you already have your risk defined So what I will do is I will just simply go in here right click Adjust this down to a 10 Notice this is below the mid I'll confirm and send so this would cost me ten dollars plus commission fees or 12 dollars 28 cents Go ahead and hit send now before you ever hit this you want to make sure You know what you're doing. This is a simulation. This is not real I want to pause right here and say because we're in a simulation This may actually trigger as soon as I hit send Paper trading tends to have extremely unrealistic fills Meaning you can make a million dollars in five minutes. It gives you a false sense of security You go off with real money and lose your life savings So notice this little limit here. Let's zoom out This guy right here is our dot 10 Meaning if this thing goes down and triggers it, it's going to actually sell it And it looks like it's actually fairly close looks like as we've been recording this the market's been dropping I can go into my monitor and I can see it's currently at a dot 20 dot 225 So this is actually extremely close to triggering this thing But now I can just walk away go about my day and you know do my day job Go hang around play playstation. Whatever I'm doing that day point being Like many of you I have a day job and I have a life and I can't sit here and watch the screen all day So this is what you really want to do is your orders Now you can add in another order if you want Or you could just cancel it. You can either cancel it here or you can just right click and cancel it right here See tada cancelled Now if I've got things to do like for example, if I'm working I will actually go in and let's create a closing order And I'm going to do my 10 that's my profit collector here And I'll do my ocl And this is where it's going to get confusing I'm going to create a duplicate order And let's go ahead and I just want to do a stop And we're going to do market A lot of people are going to tell you to do limit the problem is the market can move against you so fast It'll shoot right beyond your limit. It'll never trigger So we want to look at our profit range here So let's confirm and say, okay, so I would be paying 1750 on the second one This is where you got to do some math here. You got to go into your fill And we're looking at This thing was a net price of 2.50 That's what we got for it. And this is where I'm probably going to not do this. Well, but let's go ahead and do it too And oh come on. Did you work with me here? There we go So it would cost me 20 dollars to close this thing And I think that's probably because it's towards the end of the day If it was closer to the beginning of the day, this would be a much higher cost Data is working in our favor But I would just simply do something like this confirm send Now we have the oco all set up. You see that little link there? So one or the other is going to trigger either I'm going to sell for a profit at dot 10 or I'm going to just stop out at 2.0 Bit late in the day. Yeah, I see it's way up here So this is where it gets a bit a little bit ridiculous because you notice how if it goes above this We're looking at max loss and because we're in a five dollar increment It doesn't make a lot of sense Which is why I tend to avoid doing this And you can actually go back in here and adjust it and then I'm just kind of screwing around with this So I'm going to cancel replace. Let's say we did this wrong like I just did And then if I look at the chart, you notice how boom, it's right at that line now So basically one of these is going to trigger So it's either going to go down here and I'm going to sell and take a profit minus 12 dollars or the market's just going to hate me that day And it's going to shoot up here But as soon as it hits this it's going to say nope I don't want to lose any more money than I have to and it's going to try to sell as soon as it can That was a lot of words and admittedly I probably explained it poorly But that is kind of the method to my madness if you want me to slow down Redo this video Make a series of videos explaining this in depth. Let me know. I am not a financial guru I'm just a normal person like you who's watched a lot of youtube videos and tried to figure this out Let's recap really really quick because I realize I threw a lot at you and this is just like Sandpaper on eyeballs is the best way I can explain it We're doing spx zero dte. Why are we doing spx and not will spy because This is cash settled meaning if the market went down and went above we're not going to get assigned So we don't lose our money. We can actually wait for the trade to go back into our favor Um first first 15 minutes of the day. I will actually go in And I will mark Previous day First 15 of the day and then the mean or the middle That way in case we're dealing with like a choppy where it's going to go back and forth I know where the midline is Pick a direction go for it and then I put a dotted line saying hey, this is my break even here Then I'll go in and put stops. I typically only do the dot 10 But I will also do My hey, let's get out of free get out of jail free card here, which is right around my break even um Honestly the biggest reason why I do zero days to entry is because Time decay theta. I mean if you've learned some options You know about the greeks and time decay is in your favor The amount of time decay on these is insane and that's why I don't really play around with this upper stop here Let me go here I don't really play around with this too much because honestly that time decay is going so fast It's just going to eat you alive, which is why you want to do a spread Specifically I do vertical spreads. So I have a defined risk and a I should say defined risk and a defined reward The risk should be no more than three times the premium collected that way if it goes against me I only have to go back and win three trades Now in my albeit humble experience what typically happens is Let me pull my sheet up I'll enter the trade And I record everything down Very much so I can go back and see what did I screw up or what was awesome about this And you'll notice some of these I'll take the max profit where others I'll close out early If the market is choppy, I will just take my profits and run meaning I will take 50 of the profit And let me actually demonstrate that So let's say the market's getting all kind of weird on me here And I want to just Ancel these so I'm going to cancel both of these orders here I could have selected them both, but I'm cancel those out. So now we're just running blind 235 P&L markets acting weird, you know alien musk is going to buy Twitter I'm just going to go here create close and say I want out of this ASAP The mid is about 20 I'm just going to lock it send it in confirm send It's going to cost me $20 and some change send boom and bang filled got my money So if I flip back over I now have a zero P&L and my profit for the day because I did a previous trade is $435 Lots of words, but basically Don't get a false sense of security on paper trading. These fills are highly unrealistic and they fill a heck of a lot faster than real life So this is the zero DTE with xpx Drop a comment below and let me know what you thought if it was super confusing If you want me to do like a whole video series on this or if it was just complete rubbish And you thought I have no idea what I'm talking about All right. Talk to you later. Bye