The Options Dojo

What 80 Parabolic SAR Flips Say About the Next 10 Days

Parabolic SAR is usually taught as a picture. Dots under the price mean uptrend, dots over the price mean downtrend. That is the definition, and it is where most traders stop reading. The dot is a trailing stop. The distance between price and the dot is the part that pays, because it tells you how much room the trend has before it breaks. A stock sitting 1 percent above its dot is one candle away from a flip. A stock sitting 6 percent above its dot can absorb a bad day and keep going. Same signal, two completely different trades. In this video I show you the full chain in order on one ticker, Salesforce. Read the dot. Measure the gap as a percentage. Scan for the flips that just happened, not the ones that happened three weeks ago. Set the strike off the dot instead of off a round number. Then test the signal against every flip the stock has produced since 2019, so you know whether the pattern is a real edge or a random day wearing a costume. In this video you'll learn: 1.⁠ ⁠Cold open on the chart. What the dots are actually plotting, and why a dot under price is a stop and not a buy signal 2.⁠ ⁠The mechanic of a flip. Price touches the dot, the dot jumps to the other side, the trend label changes. Where the flip is real and where it is noise 3.⁠ ⁠Reading the gap. How to convert the distance between price and dot into a percentage, and what a tight gap versus a wide gap says about how fragile the trend is 4.⁠ ⁠Finding fresh flips in the Option Samurai scanner. Using the Parabolic SAR filter with the Flipped to Bullish preset instead of scrolling charts one at a time 5.⁠ ⁠Tightening the room in Advanced View. Setting the SAR percent range from 0 to 2 and constraining how many bars ago the flip occurred, so you get recent strength and not stale strength 6.⁠ ⁠From signal to a real trade. A short put on Salesforce struck at 220, sitting just below the 220.29 dot, with the bid, the spread, the probability of expiring worthless and the annualized return all on screen 7.⁠ ⁠Stress testing it. The free SAR backtest on the same ticker, showing what happened over the 10 trading days after each Flipped to Bullish reading against the average day, across 80 flips The point is not that Parabolic SAR works. The point is that you can measure whether it works on the specific stock you are about to trade, before you put money on it. Most traders never run that check, then wonder why a textbook setup behaved differently than the textbook. ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. ⸻ 🚀 GET STARTED 🌐 Start the 14 day free trial and build the scan yourself: https://optionsamurai.com/ 📖 Run the backtest on your own ticker here: https://optionsamurai.com/blog/backtesting-sar-filter/ ⸻ 👍 Like the video if you want the scanner filters, the strike logic and the backtest numbers to keep coming 🔔 Subscribe for more scanner filters, strike logic and backtest numbers 💬 If you have a stock you want tested against the SAR flip, drop the ticker in the comments and we will run it. Chapters: 0:00 What the dots are actually plotting 0:27 Reading the gap 0:48 Finding fresh flips in the scanner 1:07 Tightening the room in Advanced View 1:20 From signal to a real trade 1:52 Stress testing it: 80 flips since 2019

Why Your Credit Spreads Need a Ladder Not a Launch Day

Credit spreads fail for a reason almost nobody explains on camera: the day you open them. Open five on the same Monday and every position shares one entry price, one volatility read and one expiration, so one bad week decides all of them at once. This video shows the fix, and the scans that find the candidates: cap the downside on every trade, ladder your entry days so timing stops being a single throw, and manage on a schedule instead of a feeling. We build it end to end. First a bull put spread from scratch, with the real numbers: selling the 95 put, buying the 90 put, the credit you keep and the exact worst case you accept before the trade is even live. Then the schedule. From one trade to a ladder, including how many spreads stay open at the same time depending on whether you trade 3 month, 6 month or 1 year expirations. Next, the three rules a trade has to pass before it gets in: where to sell the short strike, how to size a position on max loss instead of on the credit you collect, and why RSI is a timing tool, not a reason to trade. You will also see the exact scanner filters used to build the candidate list, from days to expiration and probability of max profit through IV rank, liquidity and bid ask spread. Then diversification, where you pick a school first and spread the risk three ways, and the weekly management check: what to do when a trade is up 50 percent with time left, and what to do when your short strike gets crossed. The last section covers margin, the leverage most traders never account for, and the one sizing mistake that turns a good ladder into a margin call. If you sell options, this is the part of credit spreads that actually decides your year. ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. ⸻ 🚀 GET STARTED 🌐 Start free with Option Samurai. Run the same scans shown in this video on live market data: https://optionsamurai.com 📖 Read the full breakdown: [Blog post link] ⸻ 👍 Like this video if the ladder idea changed how you think about entry timing 🔔 Subscribe for systematic options strategy, not market predictions 💬 Comment with your cadence, every week or every other week, and I will tell you what it costs you in concentration Chapters 0:00 Why opening all your spreads on one day is risky 1:26 The bull put spread, with real numbers 2:45 From one trade to a ladder 3:29 How many spreads are open at once 4:20 The rules: short strike and position size 5:11 Why RSI is a timing tool, not a reason 5:58 The scanner filters 7:25 Diversification: two schools 8:24 Diversification: time, direction, sector 9:10 The weekly management check 10:16 Margin and leverage

The ADX Strategy for Choosing Strangles vs Directional Trades

Most traders open a chart and ask which way the stock is going. The better first question is whether it is going anywhere at all. A sideways stock and a trending stock call for completely different trades, and guessing wrong is expensive. Knowing which one you have is the first step to finding trading opportunities. In this video I show you the ADX strategy we use as a filter inside Option Samurai. The Average Directional Index is a technical indicator that measures trend strength, while its DI+ and DI- lines tell you which way the trend is leaning. You will see the filter on a short strangle scan with the Sideways preset, the Advanced View when you want your own thresholds, and the indicator under the price chart in Research. Then the full process on a real idea: a short strangle on Oracle, whose ADX has been below twenty for weeks, and the timing lesson that comes with it - you want to consider the trade right when ADX crosses below twenty, not after. Finally, our free ADX backtest on Oracle: after a quiet reading, Oracle's average move over the next ten trading days was about 0.5%, against close to 0.9% after any day. As always, what you see on the screener are candidates to investigate, not finished trades. In this video you'll learn: 1.⁠ ⁠What ADX tells you about trend strength, and what DI+ and DI- add 2.⁠ ⁠How to use the ADX filter in a scan, Basic and Advanced View 3.⁠ ⁠How to go from scan candidates to a real short strangle on Oracle 4.⁠ ⁠How to check any stock with the free ADX backtest ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. The ADX filter is one of five new technical indicators you can combine with everything else you already screen for. ⸻ 🚀 GET STARTED 🌐 Try it free for 2 weeks: https://optionsamurai.com 📖 Backtesting the ADX Filter on Any Stock [Free Backtest File Included]: https://optionsamurai.com/blog/backtesting-adx-filter/ 📖 ADX indicator docs: https://samurai.froged.help/docs/en/16236094-average-directional-index-adx-indicator ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading strategies and tools 💬 Which indicator should we cover next? ⸻ Chapters:

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