Game Plan Summary

In each trading example highlighted in the preceding section, once we have utilized at least one of the prior 20 or so indicators to enter into a trade, we are on the lookout for a low-risk intraday signal in the opposite direction to indicate that we should exit the trade. The best indicators that do so intraday are TD Sequential, TD Combo, and TD Setup Trend, all of which can be applied effectively anywhere from daily charts to one-minute charts; and TD Lines and TD Relative Retrace-ments, where qualified intraday breakouts are preferred over disqualified intraday breakouts. This doesn't mean the other indicators cannot be applied intraday, especially on larger time frames, such as hourly charts, but they are not tailored to identify the types of price momentum swings that the former five indicators do. Unless we receive a long-term indicator informing us not to, and unless we have not already done so, we typically exit our day trades prior to 15 to 30 minutes before the close of that trading day, since most of the day trading public and floor traders tend to exit their positions around that time, which can cause an unexpected adverse price swing in the market. However, keep in mind that we do not require that one must exit one's position that trading day, as most of the indicators presented—especially when applied to daily charts—are effective for more than simply one price bar, or day, of activity.

Therefore, to summarize, what we are looking far in selecting an ideal trading candidate is an option that is liquid, is close to expiration, and trading at-the-money or slightly in-the-money. We will also consider trading options that have a low total cost in order to have a lower level of risk. Additionally, option trades resulting from low-risk entry indications that have sufficient time to develop, are in alignment over several different time periods, and are synchronized with other indicator readings increase the likelihood of success.

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