CASHMONEYTRADES 2023 EDITION

TRADING
PROFITABLE OPTIONS TRADING : YOUR GUIDE TO SUCCESS
INTRODUCTION

An educational guide to profitable options trading, by CashMoneyTrades.

This guide contains CashMoneyTrades' background and journey to get to where

he is today.

WHAT YOU WILL LEARN

This guide covers the Strategies used by CashMoneyTrades to trade everyday.
Backtested Strategies with proper Risk Management and Position Sizing.
Becoming Disciplined and handling the Psychological side of trading.
How to become Consistently Profitable as a Trader.
Backtested Strategies and Chart Patterns

The goal of this guide is to provide you with the information that will help you
improve as a trader, based on the lessons learned by CashMoneyTrades on his
own journey.

DISCLAIMER
This PDF contains strictly educational material and is not professional advice. None of the traders are licensed
professionals nor do they claim to be financial advisors. Past results do NOT indicate future performance and this is
intended to be a journal for CashMoneyTrades on various lessons he has learned during his journey.
CASHMONEYTRADES

CHAPTERS
GETTING STARTED BEING DISCIPLINED FOCUSED STRATEGY
1. About Me 4. Being Disciplined 6. The SORBET Strategy

2. Trading 101 4.1 Risk Management

3. Markets and Accounts 4.2 Position Sizing

4.3. Account Goals

5. Trade Psychology

TRADING THE CHART OTHER TOOLS

7. Reading The Chart 9. Options Flow

8. Cash+ Indicators
CHAPTER ONE

ABOUT ME At heart, I come from a Software Engineering

background where I spent the majority of my career as a
Software Developer, Manager, Mentor, Coach, and in
Senior Management. My experience ranges from small
seed fund Startups, to managing teams and overseeing
million dollar projects at large Fortune 500 companies.

However, something was missing. The work was not

fulfilling and the hours were long.

I started some side projects to venture out on my own. It

started with some small online businesses where I
started to learn how to make extra income. One of these
paths led me to Options Flow Trading, and that is where I
discovered the BlackBoxStocks team.

The family at BlackBoxStocks were caring and I learned

how to trade options there, many of my Technical
Analysis skills, as well as the amazing ORB strategy.

In 2022, the Big Bull Market finally came to an end and

options flow trading became hit and miss. I needed to
level up my TA skills and learn strategies that didnt rely
on alerts from other traders. I came across Coach Dipka
and his team at Kane Capital. This is where I learned
about The System, along with some other cool strategies.

For the first time in over a year, I had finally come across
a strategy that was simple and consistent. When I
combined it with the ORB Strategy, my trading success
hit overdrive, and within 3 months I had doubled my
account with no serious downturns.

To gain confidence in these strategies, I put my Software

Developer hat on, and built TradingView indicators that I
could backtest, as well as help me trade those strategies
directly on the charts with proper Risk Management.

Now, my goal is to share this knowledge with those

wanting to get consistent with their trading.

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CHAPTER TWO

TRADING 101
Welcome to Trading 101! Here's the deal: trading is all
about buying and selling assets (like stocks, options, and
futures) in order to make a profit. It sounds simple
enough, right?

Well, there's more to it than that. You need to know what

you're buying and why you're buying it. You'll need to
learn how to read charts and market trends. And you'll
need to learn how to manage risk so that you don't lose
all your money.

But don't worry! Trading can be super fun and exciting if

you approach it with the right mindset. It's a bit like a
game, where you try to outsmart the market and make
some cash in the process. And if you're willing to put in
the time and effort to learn, you can potentially make
some serious bank.

So, let's get started! We'll cover everything from the

basics of trading to more advanced strategies, so that
you can become a pro in no time.

The majority of the focus in this guide will be on Options

Trading, but you can take many of the concepts and
apply it to Stocks and Futures.

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CHAPTER 02 - TRADING 101 06

WHAT IS OPTIONS TRADING?

Options trading is like playing the stock

market on steroids! It's all about buying and
selling contracts that give you the right (but
not the obligation) to buy or sell an asset at
a certain price. The cool thing is, you don't
have to actually own the asset to trade
options on it.

Here's an example: let's say you think a

company's stock is going to go up in the
next month. You could buy a call option that
gives you the right to buy that stock at a
certain price. If the stock goes up, you can
make a profit by selling the option. But if the
stock doesn't go up, you could lose your
investment.

It's not for the faint of heart, but if you know

what you're doing, options trading can be a
super exciting way to potentially make
some big bucks!
CHAPTER 02 - TRADING 101 07

FINDING YOUR WHY

Options Trading can be a pretty sweet gig if you put in the work to become disciplined.
It is not a get rich scheme, and don't trust anyone who says it is.

It's pretty sweet because you can make decent gains without having to put down a ton
of cash upfront. Plus, you can make money even if the market is going down.

But listen, it's not all sunshine and rainbows. You need to know what you're doing, or you
could lose all your money.

You'll need to learn a lot, and practice, practice, practice.

But if you're willing to put in the effort, options trading can be a pretty exciting way to
diversify your investments and potentially make some serious dough.

Many traders do Options Trading as a side gig (making $200/day) to supplement their 9-5
income with some extra side cash. Others go full time and aim to make at least
$800/day ($200k/year). And there are other's who trade just for fun with no daily goals in
mind.

Whatever your reason, a good perspective to have for trading is a strong WHY.

My WHY is to be in command of my own time, so I can spend more time with my family.

Work my own hours/schedule

Remove debt
Control my own future
CHAPTER 02 - TRADING 101 08

RISKS AND REWARDS OF TRADING

Options trading can be a real rollercoaster ride! You could make some serious bank, but
you also run the risk of losing it all.

The great thing about options is that they give you the power to control a lot of stuff with
only a little bit of cash. So, if you have a strong feeling about a stock or market, options
could be a way to amplify your gains.

But be warned, things can go sideways fast. Options can be super volatile, so if the price
of the underlying asset moves against you, you could end up losing everything you
invested. And if you don't know what you're doing, it's really easy to make dumb
mistakes and lose money.

For example, let's say you have a hunch that Apple's stock is going to drop. You could buy
a put option that would give you the right to sell Apple's stock at a certain price, even if
the price drops further.

This is called trading in a downward direction. If the price does drop, you could make a
sweet profit. But if it goes up, you'll be left holding the bag. So, it's important to do your
homework and only risk what you can afford to lose.
CHAPTER 02 - TRADING 101 09

THE BASICS
Calls and Puts are types of options that you can trade on the stock market.
PUTS CALLS

A call option is like a ticket that gives you the right to

buy a particular stock at a certain price, known as the
"strike price." If the stock goes up in value, you can use
your call option to buy it at the lower strike price and
then sell it at the higher market price, making a profit.

On the other hand, a put option is like a ticket that

gives you the right to sell a particular stock at a
certain price, again, the "strike price." If the stock goes
down in value, you can use your put option to sell it at
the higher strike price and then buy it back at the
lower market price, again, making a profit.

Both calls and puts can be used to make money, but they also come with risks.
CHAPTER 02 - TRADING 101 10

AN EXAMPLE
Options Trades are often displayed with the ticker being traded, the strike price you think
the stock is going to, whether it is a call (long - going up) or put (short - going down), and
the expiration date of the option.

Sometimes the Expiration Date may be left out, in which case it often means it's a same
day expiration (0dte), or weekly expiration (most contracts expire every Friday)

$TSLA 200c 230310

TICKER STRIKE EXPIRATION DATE
PRICE 10 MARCH 2023

CALL OR PUT

The closer you are to the expiration date, the more impact theta has on the value of your
contracts (ie they lose value super fast).

If you are a new trader, it is best to stay away from 0dte trades, or even weekly expirations
with less than 3 days remaining on them, as they can be very volatile and go to $0 very
quickly if the trade moves against you.

In this example, we would be buying an option in Tesla. Let's say it is trading at $195
currently. If we bought this option, we would be saying that by the end of this week
(3/10) the stock will be trading at $200 by expiration. Let's assume the cost of this option
was $1 per contract. Contracts are sold in batches of 100 shares, so that $1/contract would
cost you $100 for 1 options contract.

Lets say Tesla does reach $200 by the end of the week.

You would make $200 (strike) - $195 (current price) - $1 premium paid = $4 profit (400%)

Alternatively, if Tesla doesn't go up and stays at $195, your option would be worth $0.

Unfortunately the math isnt always that straight forward as Options Greeks affect the
value of your options contracts.

OPTIONS GREEKS
THETA - Time Decay impacts the value of the contract the closer you get to expiration.
VEGA - Volatility in the underlying stock can turbo boost the value of your contracts.
DELTA - How much the price. of the option will change (example above)
GAMMA - The rate of change of the Delta
RHO - How Interest Rates affect your contracts.
CHAPTER THREE

THE MARKET
STOCK MARKET OPTIONS MARKET FUTURES MARKET
Where you can buy and sell Where you can buy or sell the Where you can trade contracts for
shares of ownership in right to buy or sell an underlying commodities like oil, gold, or S&P
companies, like Apple, Amazon, asset, like a stock or a Futures at a future date and
or Tesla. commodity, at a certain price. price.

Markets are where people trade stuff, like stocks or other investments. Prices go up or down based on how many
people want to buy or sell, and how much they're willing to pay. Traders use all kinds of fancy charts and news to
decide when to buy or sell. The markets can change a lot based on what's happening in the world, like if there's a
pandemic or a big election, or a Fed Speaker said something to spook/pump the market. It's kinda like a big game
where everyone's trying to make money, but sometimes you win and sometimes you lose.

When you are ready to get started with trading in the Markets, always start very small or
practice with a demo account using fake money. Most traders will lose when they start
and don't become consistent for their first 1 - 2 years.

1
CHOOSE A BROKERAGE
Popular choices are E*TRADE, TD Ameritrade, and WeBull. Stay away from Robinhood.
For Futures, I recommend using Tradovate or TradeStation.

2 OPEN AN ACCOUNT
Follow your chosen brokers instructions to open an account.

3 FUND YOUR ACCOUNT

Deposit funds into your brokerage account so you can start trading options.

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CHAPTER 03 - THE MARKET 12

ACCOUNT TYPES
There are several different account types you can use to trade options:

1
CASH ACCOUNT (NO PDT!)
This is a basic brokerage account where you can trade options using the cash you have on hand. You can
only make trades with funds that have settled in your account, so you may have to wait a few days after
selling an option before you can use the proceeds to buy another one. The best part of this is there is no
PDT! That means you can take as many trades as you like as long as you have settled cash!

2
MARGIN ACCOUNT
This type of account allows you to borrow money from your broker to make trades. With a margin account,
you can trade options using borrowed funds, which can increase your buying power. However, trading on
margin also carries more risk. You can get margin called which requires you to deposit more money if you
go below a certain amount. You are also limited on how many "trades" you can make per day, keeping
$25k in the account at all times.

3 IRA ACCOUNT / SDIRA

An Individual Retirement Account (IRA) is a tax-advantaged account that allows you to invest for
retirement. Some IRA accounts allow you to trade options, but you will need to check with your broker to
see if they offer this feature. You can grow this account tax free, and pay taxes only when you withdraw
money at retirement. A Self Directed IRA (SDIRA) works the same way where you have total control of how
you invest your IRA funds (eg crypto, gold, housing, accredited investments, or the stock market).

4
JOINT ACCOUNT
A joint account is a brokerage account that is shared between two or more people. This type of account
can be useful if you want to trade options with a partner or family member.

5
CORPORATE ACCOUNT
If you are a business owner or corporate entity, you may be able to open a corporate account with a broker
to trade options on behalf of your organization.

It's important to note that the availability of these account types and the specific features they offer may vary
depending on the broker you use. It's always a good idea to do your research and compare the different options
available to find the account that best meets your needs.
CHAPTER 03 - THE MARKET 13

PATTERN DAY TRADER (PDT)

CASH ACCOUNT (NO MARGIN)
The PDT (Pattern Day Trader) rule is a regulation that applies to traders who buy and sell securities using a margin
account. If you execute more than three day trades in a five-business-day period, you're considered a pattern day
trader and need to keep at least $25,000 in your account at all times. This rule is designed to protect traders from
overtrading and the risks associated with excessive trading activity.

Basically, it's a way to make sure traders have enough money in their account to cover potential losses and reduce
the risk of running into financial trouble.

It only applies to margin accounts, not cash accounts, and it's only for traders in the United States.

TRADER TAX STATUS (TTS)

FOR TAX ADVANTAGES
Are you a trader who's tired of paying hefty taxes on your profits? Well, my friend, you're in luck because there's a
way to significantly reduce your tax burden - and it's called trader tax status.

Trader tax status (TTS) is a designation granted by the IRS that allows active traders to treat their trading activity as
a business, rather than a passive investment. This means that traders with TTS can deduct all of their trading-
related expenses (such as education, equipment, and even home office expenses) as business expenses, reducing
their taxable income.

But wait, it gets even better! Traders with TTS are also eligible for the coveted mark-to-market accounting method,
which means that they can report their gains and losses on a daily basis. This is a huge advantage over non-
business traders who can only report their gains and losses on an annual basis.

Now, you might be thinking that getting TTS is too good to be true. Surely there's a catch, right? Well, there are a
few requirements that traders must meet to qualify for TTS. Firstly, traders must engage in frequent and regular
trading activity - the IRS typically looks for at least 3 trades per week. Additionally, traders must demonstrate that
they have a profit motive and are conducting their trading activity with the intention of making a profit.

If you meet these requirements, then getting TTS is definitely worth it. Not only can it save you thousands of dollars
in taxes, but it also legitimizes your trading activity as a business. This can be especially helpful for traders who are
looking to obtain financing or open a trading account with a broker.

So, how do you get TTS? The process involves filing a Form 1040, attaching a Schedule C, and making an election
under Section 475(f) of the Internal Revenue Code. It's recommended that you consult with a tax professional to
ensure that you meet all the requirements and that the election is made correctly.

In conclusion, trader tax status is a valuable designation for active traders who want to reduce their tax burden and
legitimize their trading activity as a business. With the mark-to-market accounting method and the ability to
deduct trading-related expenses, getting TTS can save you a significant amount of money in taxes.

So, if you meet the requirements, don't hesitate to pursue TTS - your wallet will thank you!
CHAPTER 03 - THE MARKET 14

PAPER TRADING
PRACTISE MAKES PERFECT
If you are new to trading, you may be looking for a way to practice without risking your hard-earned money. Or
maybe you're an experienced trader who wants to try out new strategies before implementing them with real
money. Either way, paper trading might be just what you need.

Paper trading, also known as simulated trading, is a way to practice trading without using real money. Instead, you
use a simulated account that mimics the conditions of real trading, including price data and order execution. This
allows you to test out your trading strategies, get familiar with different markets, and gain confidence in your
trading skills, all without risking a dime.

One of the biggest advantages of paper trading is that it allows you to make mistakes and learn from them
without suffering any real financial losses. This is especially important for new traders who are still learning the
ropes and may not have the experience or knowledge to make profitable trades right off the bat. By paper trading,
you can test out different strategies, learn from your mistakes, and refine your skills before you start trading with
real money.

Another benefit of paper trading is that it allows you to experiment with different markets and asset classes
without committing any real money. For example, you may be interested in trading futures, but don't want to risk
your money until you have more experience. By paper trading futures, you can get a feel for how the market
works, test out different trading strategies, and build up your confidence before you start trading with real money.

In conclusion, paper trading is a valuable tool for traders of all experience levels. It allows you to practice trading
without risking any real money, learn from your mistakes, and gain confidence in your trading skills. So, if you're
new to trading or want to try out new strategies, give paper trading a try - your wallet (and your sanity) will thank
you!

FUNDED PROP TRADING

Funded prop traders are traders who are provided with capital to trade by a prop trading firm. These traders are
typically required to go through a selection process and demonstrate their trading skills before being granted
access to the firm's capital.

Funded prop traders are given a trading account with a set amount of capital, which they can use to trade a
variety of financial instruments, such as stocks, options, futures, and currencies. These traders are usually allowed
to keep a percentage of their profits, with the rest going to the prop trading firm.

The advantages of being a funded prop trader include having access to significant capital that would be difficult to
obtain on your own, as well as the support and resources provided by the prop trading firm, such as training,
mentoring, and advanced trading tools. Funded prop traders also have the potential to earn significant profits,
with some prop trading firms offering traders the opportunity to earn six-figure salaries or more.

However, being a funded prop trader also carries risks, as traders are trading with someone else's capital and must
adhere to strict risk management guidelines. Traders who fail to meet these guidelines or who suffer significant
losses may have their trading account revoked, and may be liable for any losses incurred by the prop trading firm.

Overall, funded prop trading can be a rewarding career path for skilled and disciplined traders who are willing to
take on the risks associated with trading someone else's capital.
CHAPTER 03 - THE MARKET 15

BULL BEAR & CHOPPY MARKETS

Understanding the type of market we are in is essential to your current trading style.

Back in 2020-21, the market was in a massive Bull Run. You could throw money at almost
any stock and it would go up.

Then covid hit, and 2021 - 22 was a bear market, where most stocks headed down.

Now, in 2023, the market is choppy. We have mini bull runs inside a bear market. These
markets are hardest to navigate and you need to be able to pivot quickly based on the
short term direction.

All stock market action is a combination of

Fundamental Analysis, Technical Analysis and Mass Psychology

A bull market is a period of rising stock prices and

positive investor sentiment. During a bull market,
people are generally optimistic about the economy
and buying stocks. It's a good time to invest and
make money.

When the stock market is feeling grizzly and

everything seems to be going downhill, we call it a
bear market. This means stock prices are falling,
people are selling their stocks, and everyone is feeling
negative about the economy. It's a rough time for
investors, but can also be an opportunity to buy
stocks at lower prices.

In an ape market, stocks (usually meme names) are

surging and investor sentiment is extremely positive,
often driven by online communities and retail
investors banding together to buy and hold specific
stocks. This can create a volatile and unpredictable
market environment, with some investors making
significant profits, while others experience steep
losses if the stock prices come crashing down.
TRADING 101

POP QUIZ
1
What is an Options Contract?
a) An agreement between two parties to buy or sell a specific asset at a specific price
b) An agreement between two parties to trade assets at any price
c) An agreement between two parties to borrow money at a specific interest rate
d) An agreement between two parties to lend money at a specific interest rate

2
What is a call option?
a) An option that gives the holder the right to sell an asset at a specific price
b) An option that gives the holder the right to buy an asset at a specific price
c) An option that gives the holder the right to trade assets at any price
d) An option that gives the holder the right to borrow money at a specific interest rate

3
How do I avoid PDT rules?
a) You have to keep at least $25k in your account at all times
b) Use Margin
c) Switch to a Cash Account
d) Trade out of an IRA account

4
How can I make a One Million dollars trading options?
a) Start slow, with proper risk management and discipline, with much smaller short term goals.
b) Go big on every trade, risking it all
c) You can't
d) Start with Two Million Dollars

5
How can I trade a Bear Market?
a) Buy Calls with longer dated expirations
b) Buy Puts based on current price action
c) Buy Calls or Puts, being reactive to the current day's price action
d) Follow everything Jim Cramer says

1a, 2b, 3c, 4a, 5c

CHAPTER FOUR

BEING DISCIPLINED
Are you tired of feeling like your trading strategy is all
over the place?

Do you find yourself making impulsive trades or risking

too much on a single position?

It's time to take a step back and focus on the importance

of discipline in trading.

In this chapter, we'll cover a variety of topics that are

essential to becoming a disciplined trader. We'll start
with the importance of being patient and avoiding the
temptation to over trade. We'll also discuss the critical
role that risk management plays in your overall success,
including the use of stop losses and position sizing.

Furthermore, we'll explore the concept of setting clear

account goals and developing a consistent trading
approach. By focusing on these key areas, you'll be able
to achieve greater consistency in your trades and build a
stronger foundation for long-term success.

So if you're ready to take your trading to the next level,

it's time to buckle down and get disciplined!

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CHAPTER 04 - BEING DISCIPLINED 18

HAVE PATIENCE
QUALITY OVER QUANTITY
Patience is a critical trait for successful trading. Many traders fail
because they lack the discipline to wait for the right opportunities
to present themselves.

The market is constantly changing, so you need to be able to wait

for the right moment to make the move, rather than trying to
force trades when the timing is not ideal.

By waiting for the right setup, you can carefully analyze the
current market trends, identify TA patterns, and assess the
potential risks and rewards of a particular trade. This level of
analysis can help you make more informed decisions, which can
ultimately lead to greater profitability.

For me, that often means waiting for the ORB range to break, and
ensuring we have are also trending in the right direction
above/below the 30m 50sma. Some days, I may not even have a
trade to make, and that is okay.

Conversely, impatience can lead to poor decision-making and

unnecessary losses. Traders who are able to cultivate patience and
discipline are more likely to succeed in the long run.

YOU DONT ALWAYS NEED TO BE IN A TRADE!

TIP AND TRICKS

1
Build Patience
If you are itching to get in a trade when your setup is not there, walk away from the screen. If you really
have to scratch the itch, then enter incredibly small (eg 1 cheap contract) only, where it won't impact your
Profit and Loss.

2
Delay Gratification
You don't need to make $1M overnight. Or in 1 week. Set small daily goals each day that are easy to hit.
Then celebrate those wins. Before you know it, your account will be growing.

3
Trading is 80% waiting
Enjoy that free time. This is not like your 9 - 5. Wait for your setup, and if its not there, do something else.
CHAPTER 04 - BEING DISCIPLINED 19

THE ZERO DAY

THE FENTANYL OF TRADING
When it comes to trading options, there are a lot of different strategies and approaches that you can take. But for
newer or less experienced traders, there are a few things you need to be aware of - especially when it comes to
zero day to expiration (0DTE) trades.

1
0DTE ARE SUPER HIGH RISK
First and foremost, it's important to understand that 0DTE trades can be incredibly risky. When you're
dealing with options that are about to expire, the value of those options can swing wildly based on even
small movements in the underlying asset. This means that if you're not careful, you could end up losing a
lot of money very quickly.

2
HOW TO MITIGATE THE RISK OF 0DTE
One way to mitigate that risk is to consider playing options with further expiration dates. While 0DTE
trades can be tempting because they offer the potential for quick profits, the reality is that they can also
lead to quick losses. By playing options with further expiration dates, you give yourself more time for the
underlying asset to move in your favor - which can increase your chances of success.

3
ITM vs OTM OPTIONS
Another important thing to keep in mind is the risk reward of out-of-the-money (OTM) options versus in-
the-money (ITM) or at-the-money (ATM) options. While OTM options can be cheaper to buy, they also come
with a much higher level of risk. If the underlying asset doesn't move in your favor, you could lose your
entire investment. ITM or ATM options, on the other hand, may be more expensive, but they also offer a
higher probability of success - which can make them a safer choice for newer traders.

Ultimately, the key takeaway here is that new traders need to be careful when it comes to 0DTE options.

While they can be a tempting way to try and make a quick profit, they also come with a lot of risk. By considering
longer-dated options and focusing on ITM or ATM options, you can reduce that risk and give yourself a better
chance of success. Remember - trading options is all about balancing risk and reward, and by being smart and
strategic, you can improve your odds of coming out on top.
CHAPTER 04 - BEING DISCIPLINED 20

OVERTRADING
QUALITY OVER QUANTITY
Have you ever found yourself glued to your trading screens, constantly checking the market movements and
entering and exiting trades at a rapid pace? This might be a sign of overtrading, a common pitfall that can wreak
havoc on your trading account and mental health.

Overtrading is when a trader executes too many trades, often with high frequency and low conviction, resulting in
a significant increase in transaction costs and potential losses. Overtrading can be fueled by a range of emotions,
such as fear of missing out, greed, or impulsivity, and can lead to a range of negative consequences, including
burnout, fatigue, and reduced trading performance.

One of the main dangers of overtrading is that it can erode your trading account and eat away at your profits. This
is because transaction costs, such as commissions, spreads, and slippage, can add up quickly, especially if you're
executing a large number of trades. In addition, overtrading can lead to making irrational decisions, such as
chasing losses, revenge trading, or ignoring risk management rules, which can result in significant losses.

To avoid overtrading, it's important to have a clear trading plan and strategy that includes specific entry and exit
criteria and risk management rules. It's also helpful to set realistic trading goals and limit the number of trades you
execute each day or week. Taking breaks, getting enough rest, and managing stress levels can also help prevent
overtrading and improve trading performance.

There are several things you can do to avoid overtrading and stay on track with your trading goals:

1
CREATE A TRADING PLAN
Having a clear trading plan with specific entry and exit criteria, risk management rules, and realistic goals
can help you stay focused and avoid impulsive trading decisions.

I follow a specific strategy (SORBET), and avoid all others. I limit myself to two tickers (SPX and TSLA).

2
TRADE LESS
It's important to set limits on the number of trades you execute each day or week and the amount of risk
you're willing to take on each trade. This can help you stay disciplined and avoid the temptation to
overtrade.

An example that I strive for is to take just 2 trades per day. If my first trade is profitable, then can take a
second trade using profits only. And then a third trade with only those profits. The key is to ensure you lock
in the profits and don't go red on the day.

If I lose 2 trades in a row, I am done for the day. If I hit my daily goal, I am done (or ensure I don't give that
back)

3
USE A TRADING JOURNAL
Keeping a trading journal can help you track your trading performance, identify patterns and mistakes, and
adjust your strategy as needed. My journal is public (see Daily Recaps)

4
TAKE BREAKS AND MANAGE STRESS
Taking regular breaks from trading, especially during volatile or stressful market conditions, can help you
recharge and avoid burnout. Stress and emotional turmoil can often lead to overtrading. Finding ways to
manage stress, such as exercise, meditation, or therapy, can help you maintain a healthy trading mindset.
CHAPTER 04 - BEING DISCIPLINED 21

BLOWING UP YOUR ACCOUNT

Many traders fall victim to the same mistakes and end up losing everything they worked
hard to earn. But fear not, because there are simple steps you can take to avoid blowing
up your account and achieve sustainable gains.

1
THE GAMBLING MINDSET
First and foremost, let's address the gambling mindset that many traders have. It's easy to get caught up in
the thrill of making big profits and taking risks, but this is a surefire way to lose it all. Trading should not be
seen as a game of chance, but rather a strategic investment strategy that requires discipline and focus.

2
NO RISK MANAGEMENT
One common mistake traders make is failing to practice proper risk management. This means not using
stop losses, risking too much on a single position, and not diversifying their portfolio. Without proper risk
management, you leave yourself vulnerable to significant losses and ultimately blowing up your account.

3
OVERTRADING
This is when you make too many trades, often based on emotions rather than logic, and end up losing
money in the long run. To avoid overtrading, it's essential to have a clear trading plan and stick to it. Don't
let FOMO or greed drive your decisions, but instead, focus on making smart and calculated moves.

4
SUSTAINABLE GAINS
It's crucial to focus on making sustainable gains rather than trying to get rich quick. Many traders fall into
the trap of chasing after high-risk, high-reward trades, but this is not a sustainable or realistic approach.
Instead, focus on building consistent gains over time.

WIN 2/3, BUT RED ON THE DAY WIN 2/3, BUT EVEN ON THE DAY WIN 1/3, BUT GREEN ON THE DAY
TRADE 1: $100 Gain (10% on $1000) TRADE 1: $100 Gain (10% on $1000) TRADE 1: $300 Gain (30% on $1000)
TRADE 2: $150 Gain (15% on $1000) TRADE 2: $150 Gain (15% on $1000) TRADE 2: $100 Loss (-10% on $1000)
TRADE 3: $500 Loss (-50% on $1000) TRADE 3: $350 Loss (-35% on $1000) TRADE 3: $100 Loss (-10% on $1000)

With proper risk management, you be 1/3 wins on the day and still end green. This is achieved by taking higher
Risk Reward trades, and when trades invalidate, you take the stops quickly to reduce risk. While the trade works in
your favor you maximize taking profits (letting your winners run, and cutting your losers quickly).

This can only be achieved by entering trades close to your risk area (at support) and position sizing appropriately.

Blowing up your trading account is a common mistake, but it doesn't have to be your
fate. By avoiding the gambling mindset, practicing proper risk management, avoiding
overtrading, and focusing on sustainable gains, you can build a solid foundation for
success and achieve your trading goals. So, stay disciplined and keep on trading!
CHAPTER 04 - BEING DISCIPLINED 22

SELLING EARLY
The "selling too early" mindset is a common pitfall for many traders. It's easy to get
caught up in the excitement of a quick profit and sell a position too soon, only to watch it
continue to climb higher. While it's natural to want to lock in gains, selling too early can
lead to missed opportunities for larger profits. To avoid this, it's important to have a clear
strategy and stick to it, avoiding the temptation to make impulsive trades based on
emotions. Additionally, setting realistic profit targets can help you stay focused and avoid
selling too early. Remember, patience and discipline are key to successful trading.

"Profitable Traders Sell Early"

1
KEEP RUNNERS
I like to trim most of my position at key levels (for me those are typically my ORB fib targets). That will
typically net me about 20%-30% on a trade. Sometimes, these trades will continue to run (eg on a strong
trend day). Keeping runners allows me to continue benefiting from the trade, while taking most of my
profits.

2
YOU CAN'T PREDICT
Often, traders will get out of a position too early while still following their trading plan. Then they see the
trade run another 100%+ and regret getting out too early. The next trade they decide to hold on longer, but
the trade doesnt run, resulting in the trader making less on the trade due to the reversal. This has
happened to me countless times. I recommend journalling your trades, and noting down how much your
trades typically run had you stayed in it. If it happens more often than not, then evaluate why you trim
where you did and adjust your rules. If you end up holding longer, only to see reversals happen more
frequently, then go back to trimming aggressively.

3
BASE HITS ADD UP
Sure, everyone loves to post that fancy WeBull card showing someone just made 100% gain on a trade.
What they don't show you is they already trimmed most of the position earlier and these are their runners.
Taking base hits are key to consistently growing an account. Stacking up multiple 20%+ wins consistently
will give you longevity in the markets and you will be surprised how quickly your account compounds with
that. The home runs are rarer than you think, and waiting for a home run on every trade is a fast track to
blowing up your account.
CHAPTER 04 - BEING DISCIPLINED 23

TO SWING OR NOT TO SWING

If you're a day trader, you know how important it is to stay on top of market conditions
and make quick, informed decisions. But with the current choppy markets, it can be
challenging to determine when to swing and when to hold.

1
HAVE A CLEAR TRADING PLAN
This includes setting realistic profit targets and stop losses, as well as understanding your risk tolerance. If
the markets are particularly volatile, it may be wise to avoid swinging and instead focus on quick, profitable
day trades.

2
STRONG FUNDAMENTALS AND CLEAR TREND
There are times when a swing trade can be advantageous. For example, if you identify a stock with strong
fundamentals and a positive long-term outlook, it may be worth holding onto the position for a few days or
even weeks. Likewise, if there is a strong downtrend on multiple higher timeframes to give you conviction
of a trade, then swinging Puts can work. But make sure you have appropriate risk management in place to
know when to cut the trade if the plan is invalidated.

3
REMAIN FLEXIBLE
It's important to remain flexible and adaptable in the face of volatility. Don't be afraid to pivot your strategy
if necessary, and always prioritize risk management to protect your portfolio. In this highly volatile market,
anything can change things overnight (unexpected news, fed speak, market sentiment), and your position
could be greatly impacted based on your timeframe etc.

4
DON'T PREDICT, ONLY REACT
Often it is easy to make an assumption on which way the markets will go. For example, on March 10, 2023 -
The Silicon Valley Bank ($SIVB) failed - the largest bank to fail since 2008. The common narrative going
into the weekend was more bank failures will hit, and the stock market will plummet at open on Monday.
One would think it would be a no brainer to load up on Puts. Then, Sunday futures opened up 65 points on
positive news from the Treasury and Fed. The market then gave up those gains premarket on Monday
morning, before ripping back higher under very volatile conditions. Even though puts here worked, it
looked dicey watching futures and could have opened either way.

As a day trader, always manage risk, don't make assumptions as the market will find ways to prove you
wrong. Being reactive to Price Action, rather than trying to Predict will serve you better in the long run.
Swinging comes with inherent risk when you cant manage the trade, so size appropriately.

Navigating choppy markets as a day trader can be challenging, but it's not impossible. By
having a clear trading plan, understanding your risk tolerance, and remaining flexible,
you can make informed decisions and stay profitable in any market conditions.

Keep your eyes on the charts and stay disciplined!

CHAPTER 04 - BEING DISCIPLINED 24

WALKING AWAY
It's no secret that trading can be a challenging and sometimes frustrating endeavor.
There are times when we may feel like we've lost our edge and are no longer making
informed decisions. In these situations, it's important to recognize when it's time to walk
away from trading to avoid a bad red day.

Some days making progress isn't making more money than

yesterday. It's identifying you dont have your edge and not having
a bad red day because of it. - @TLAMB91

1
TAKE A BREAK
It's important to understand that it's okay to take a break from trading. In fact, taking a step back and
regrouping can often be beneficial for your mental and emotional well-being, as well as your overall trading
strategy.

2
EVALUATE YOUR STRATEGY
If you find yourself struggling to make informed decisions or feeling like you've lost your edge, it may be
time to reevaluate your approach. This could include taking a break from trading to focus on education
and research, or adjusting your strategy to better align with current market conditions.

3
RECOGNIZE YOUR EDGE
Every strategy has days where they work great, and other days where they just don't. Some strategies
work great on Bull Markets, but suck at Bear Markets. Others thrive on volatility, taking advantage of
every move up and down, while others fail terribly on those days.

It is important to understand where your strategy excels, and when it doesn't. If your rules are being met,
but the trades aren't working (which does happen even to the best traders), then it is okay to take the
small red (remember to cut your losers early when trades invalidate).

Don't force trades when it just isn't there. Your first rule is to protect your profits. So if the market isn't
working for you today, then walk away today and come back again tomorrow.

Walking away from trading when you recognize that you've lost your edge is a wise
decision. Taking a break and reevaluating your approach can help you avoid a bad red
day and ultimately improve your overall performance. So, don't be afraid to step back,
regroup, and come back stronger than ever!
CHAPTER 04 - BEING DISCIPLINED 25

RISK MANAGEMENT

Once you enter a trade, is is important that

risk management plays your number one
role to be successful as a trader.

No strategy is ever going to have a 100% win

rate, but as long as you follow a strategy
where you the amount you win in a trade is
significantly more than you lose, you can put
the numbers in your favor.

Always know your risk going into a trade. I

will often set this to a 10% to 20% loss
depending on the amount of money I have
put into the trade, or I know where on the
chart I need to cut if the trade invalidates.

If the trade goes against you and your

reason for entering the trade has been
invalidated (eg your candle closed above a
resistance area you were looking to reject)
then you want to cut those losers fast.
CHAPTER 04 - BEING DISCIPLINED 26

USING STOP LOSSES

RISK MANAGEMENT
Here is how you can try to maximize profit, and minimize losses
by using Stop Losses.

1
MOVING STOPS
Place your initial stop behind support/resistance. If your trade invalidates (breaks that key s/r) then you
need to stop out!

Once your trade is up 10% - 20% (depending on volatility), move your stop to break even. This will help
ensure your green trade doesn't go red. At this point the worst case is you don’t lose anything.

Once the trade is up to 20% - 30%, move your stop up to 10% to guarantee a win.

2
TIGHTENING YOUR STOPS
Continue to watch the chart. As your trade continues to move in your direction, continue to move your stop
up to guarantee profits. If you see a huge candle/volume spike, it may make sense to take profits then, or
keep a tight stop.

As you approach your target, also tighten your stops or switch to a trailing stop to ensure profits.

3
KEEP RUNNERS
You may decide to keep runners after crossing your target in case it keeps moving in your direction.

4
DON'T LET A TRADE WORK AGAINST YOU TWICE !
If your trade does go red on you before you take profit but the chart still looks good, you can let it work. But
if it comes back green, start setting tight stops. Don't let a trade go against you twice!!!
CHAPTER 04 - BEING DISCIPLINED 27

EXAMPLE
RISK MANAGEMENT

You put $1000 into a trade. With a 20% stop you are risking $200.

1
TRADE FAILS
You stop out.
LOSS = $200.

2
TRADE ALMOST REACHES TARGET
You moved up stops and make 20%.
GAIN = $200

3
TRADE HITS TARGET
You trim at target and make 50%.
GAIN = $500

Now, if you take 3 trades in a day, you can lose 2 trades (total loss = $400), but win on only
1 trade (gain = $500), and come out with a net gain of $100. So you will still be green with
a 33% win rate for the day.

The goal should be to minimize how much you lose on the losing trades, and try to gain
more than you lose on the winning trades. So then even with a poor win rate, you can still
be slightly green, and as you improve your entries on good strategies, you will increase
your win rate, thus significantly improving your net gains to be consistently profitable.
CHAPTER 04 - BEING DISCIPLINED 28

POSITION SIZING
RISK MANAGEMENT

Position sizing is a way to manage risk by determining how much money to invest in
each trade. To do this, you need to consider factors such as your account balance, the
amount of risk you're willing to take, and the size of your stop loss.

A general rule of thumb is to RISK no more than 1% - 5% of your account balance on any
given trade.

In the above scenario, you could have 4 contracts of SPY at $2.50/contract = $1,000
position size, then place a stop at 25%, thus risking $250 on the trade.

Or you could have bought just 2 contracts of SPY at $2.50/contract = $500 position size,
then place a stop at 50%, thus risking the same $250.

The first scenario has more conviction with a tighter stop (higher risk:reward), while the
second scenario has lower risk:reward due to lower conviction, yet both trades are risking
the same amount.

As your account grows from $5,000 to $10,000, you could choose to lower your risk from
5% of the account to just 2.5% of the account. Thus you will continue to make the same
daily goal, but be risking half as much of the account on every trade. Alternatively, you
could keep the risk percentage the same, but increase your position size. The key to
deciding this differs by the individual and what their risk tolerance is, as well as how
consistently profitable they are.

With a 10% daily account size risk, you would need 20 losing trades in a row (or 10 losing
days in a row) to completely blow up your account. However, it would be wise for you to
survive longer by reducing your position size as your account size decreases, thus staying
in the game longer.
CHAPTER 04 - BEING DISCIPLINED 29

DELAYED GRATIFICATION
RISK MANAGEMENT

Instead of focusing on a big goal, set

smaller, achievable levels that will eventually
get you to the end. Start with a low level set
to your account balance, then set an upper
target as the next micro milestone.

My micro levels are based on the 30% rule.

Using an $11k account as an example:

Lower Level (Support) = $10,604
First Milestone (Target) = $13,785.
Once you reach $13k (usually in multiple
trades), it becomes your new support,
and your new target becomes $17,921
and so on...

As you stack profits, you slowly start to size

up towards reaching your next goal, while
avoiding incurring large losses that would
cause you to go below your previous
milestone (support).

I started this approach in Dec and quickly

blew past the first few goals, but
consolidated between my targets in
Jan/Feb, then finally breaking through in
March.

Protecting your gains is critical as you don't

want to fall back to a previous level.
CHAPTER 04 - BEING DISCIPLINED 30

THE ROAD TO CONSISTENCY

SUMMARY

The road to consistency in trading can be a long and challenging journey, but the rewards are worth it.

Here are some key points to keep in mind as you embark on this journey:

1
FOCUS ON THE RISK, NOT THE GAINS
Instead of focusing solely on potential profits, prioritize risk management and protect your portfolio by
setting stop losses and minimizing downside risk.

2
TRADE LESS
Avoid over-trading and prioritize quality over quantity when it comes to your trades. Focus on taking high-
probability trades that fit your strategy.

3 STICK TO YOUR RULES

Develop a clear trading plan with well-defined rules, and stick to it, avoiding impulsive decisions based on
emotions.

4
TRADING IS A MARATHON, NOT A SPRINT
Take a long-term perspective and prioritize consistency over short-term gains. Be patient and avoid the
temptation to make impulsive decisions based on short-term market movements.

5
LEARN FROM YOUR MISTAKES
Every loss is an opportunity to learn and improve your strategy. Keep a trading journal to track your
progress and identify areas for improvement.

6
THINK IN PROBABILITIES
Recognize that trading is inherently uncertain and focus on making informed decisions based on
probabilities, not guarantees. Avoid the trap of trying to predict market movements with 100% accuracy,
and instead react to price action.
BEING DISCIPLINED

POP QUIZ
When should a stop loss be used in options trading?

1
a) Only when the market is highly volatile
b) Only when the trader is new to options trading
c) When the trader wants to limit potential losses
d) When the trader wants to increase potential gains

Why is position sizing important in options trading?

2
a) It allows traders to take on more risk
b) It helps traders minimize potential losses
c) It increases the probability of winning trades
d) It is not important in options trading

Which of the following is a factor to consider when determining position size?

3
a) Volatility of the asset
b) The trader's emotional state
c) The day of the week
d) The trader's experience level

When should traders cut their losses and exit a losing trade?

4
a) As soon as the trade starts losing money
b) When the underlying asset hits a certain price target
c) When the trade reaches a predetermined stop loss level
d) When the trader feels like giving up on the trade

What is the benefit of being patient when waiting for trade setups?

5
a) It increases the probability of finding profitable trades
b) It leads to more frequent trades and more profits
c) It reduces the need for stop loss orders
d) It allows the trader to take on more risk

1c, 2b, 3a, 4c, 5a

CHAPTER FIVE

PSYCHOLOGY 101
RECOMMENDED FOLLOW: @SOUNDTRADEPSYCH

In this chapter, we'll explore the often-overlooked role of

psychology in successful options trading.

While many traders focus solely on technical analysis and

market trends, the reality is that our emotions, biases,
and cognitive processes play a significant role in our
decision-making.

In this chapter, we'll cover managing emotions such as

fear and greed, avoiding common cognitive biases that
can lead to poor decision-making, and developing
effective strategies for overcoming psychological
obstacles in trading.

We'll also explore the impact of personality traits such as

risk tolerance and self-control on trading success, and
provide practical tips and tools for managing these
factors.

TRADING GUIDE
2023 EDITION
32
CHAPTER 05 - PSYCHOLOGY 101 33

THE EMOTIONS OF TRADING

There are a few other emotions that traders should be aware of when it comes to options trading:

1
GREED
Greed can lead traders to take on too much risk in the hopes of making big gains. This can lead to
impulsive decisions and significant losses.

2
FEAR
Fear can cause traders to second-guess themselves and miss out on good opportunities. It can also lead to
overcautiousness, causing traders to miss out on potential gains.

3
OVERCONFIDENCE
Overconfidence can cause traders to take on more risk than they should, leading to significant losses. It's
important to remain humble and remember that the market is unpredictable.

4
IMPATIENCE
Impatience can lead traders to take on trades that don't fit with their plan or to exit trades too early. It's
important to be patient and wait for the right setups.

5
REGRET
Regret can occur when traders make a mistake or miss out on an opportunity. It's important to learn from
mistakes and not dwell on them, as this can lead to further mistakes.

It's essential to be aware of these emotions and how they can impact your trading decisions. By staying disciplined
and focused on your trading plan, you can avoid making impulsive decisions based on emotions and increase your
chances of success.
CHAPTER 05 - PSYCHOLOGY 101 34

ALWAYS WANTING MORE

GREED

One of the most common emotions that traders experience is greed. This is the desire to make as much money as
possible, and it can lead to impulsive decisions and excessive risk-taking.

Greed can manifest in several ways in options trading. For example, a trader may become fixated on making a
certain amount of money, leading them to take on trades that don't fit with their plan or that carry too much risk.
They may also hold onto winning trades for too long, hoping to make even more money, only to see their profits
evaporate as the market turns against them.

So how can you handle the greed emotions in options trading? Here are a few tips:

1
STICK TO YOUR PLAN
One of the most effective ways to combat greed is to have a well-defined trading plan and to stick to it. This
can help you avoid impulsive decisions and keep your risk under control.

2
SET REALISTIC GOALS
It's important to set realistic goals for your trading, both in terms of the amount of money you hope to
make and the level of risk you're comfortable with. By setting achievable goals (See "Delayed Gratification"),
you can avoid getting caught up in the desire to make more and more money.

3 TAKE PROFITS EARLY (JUST HIT SELL)

When you have a winning trade, it can be tempting to hold onto it in the hopes of making even more
money. But it's important to remember that the market can be unpredictable, and profits can evaporate
quickly. Take profits when they're available and don't get too greedy. If you like what you see, if you are
taking a screenshot to share on Discord/Twitter, then you should probably trim first.

4
MANAGE YOUR RISK
Greed can lead traders to take on too much risk, which can be a recipe for disaster. Be sure to manage your
risk carefully and never risk more than you can afford to lose.
CHAPTER 05 - PSYCHOLOGY 101 35

THE HESITATING TRADER

FEAR

Fear is a natural emotion that can play a significant role in options trading. When traders feel afraid, they may
hesitate to take trades, even if those trades appear to be good opportunities. This fear can be particularly strong in
new traders who are still getting their bearings in the market.

So how can you handle the fear of taking trades in options trading?

Here are a few tips:

1
HAVE A PLAN
One of the most effective ways to combat fear is to have a well-defined trading plan. This can help you stay
focused on your goals and avoid making impulsive decisions based on fear or uncertainty.

2
USE STOP LOSSES
Stop-loss orders are an important tool for managing risk in options trading. By setting a stop-loss order, you
can limit your potential losses on a trade, which can help alleviate some of the fear and uncertainty around
taking that trade in the first place.

3 TRADE SMALL / SIZE DOWN

If you're feeling particularly hesitant or fearful about a trade, consider starting small. You can test the
waters with a smaller trade size, which can help you build confidence and reduce the risk of a big loss.

4
STAY INFORMED
Knowledge is power in options trading, and staying informed about market conditions and trends can help
you make more informed decisions. Keep up with the news, watch for market trends, and stay in touch
with other traders (eg in a shared discord room, twitter, etc) to get a sense of what's happening in the
market.

5
REMEMBER YOUR WINS
Finally, when you're feeling afraid or uncertain about taking a trade, try to remember your past successes.
Think back to times when you took a risk and it paid off, and use that as motivation to take the trade.

By keeping these tips in mind, you can overcome the fear of taking trades in options trading. Remember, fear is a
natural emotion, and it's important to acknowledge and understand it. But with the right tools and mindset, you
can use fear to your advantage and become a successful options trader.
CHAPTER 05 - PSYCHOLOGY 101 36

I'M ON A WIN STREAK!

OVERCONFIDENCE

Overconfidence is a common issue in options trading, and it can lead to some serious mistakes. When traders
become overconfident, they may take on too much risk, ignore warning signs, and make trades that aren't based
on sound analysis.

So, how can you recognize and overcome overconfidence in options trading?

Here are a few tips:

1
STAY HUMBLE
One of the keys to avoiding overconfidence is to stay humble. Remember that the market is unpredictable,
and even the most experienced traders make mistakes. Keep an open mind, and be willing to learn from
your successes and failures.

2
CHECK YOUR EGO
It's easy to let your ego get in the way when you're trading options. But remember, trading isn't about
being right or proving yourself to others. It's about making money. So check your ego at the door, and
focus on making smart, data-driven decisions.

3 USE A TRADING PLAN

A well-defined trading plan can help you stay focused and avoid overconfidence. By sticking to your plan,
you can avoid making impulsive decisions based on emotion or overconfidence.

4
MANAGE YOUR RISK
Managing risk is key to successful options trading. By setting stop-loss orders and other risk management
strategies, you can help avoid big losses that can come from overconfident trades.

5
STAY GROUNDED
Finally, it's important to stay grounded in reality. Don't let your past successes or your beliefs about the
market cloud your judgment. Stay objective, and base your decisions on data and analysis.

By following these tips, you can recognize and overcome overconfidence in options trading. Remember, trading is
a marathon, not a sprint. Stay focused, stay disciplined, and always be willing to learn and adapt.
CHAPTER 05 - PSYCHOLOGY 101 37

OMG, I JUST BANKED!

OVERCONFIDENCE

After a big win in options trading, it's easy to get caught up in the excitement and rush to make even more trades.

However, it's important to take a step back and cool off before making any more decisions.

Here are a few reasons why cooling off is important after a big win:

1
AVOIDING OVERCONFIDENCE
When you experience a big win, it's easy to become overconfident and think that you can't lose. This
overconfidence can lead to taking on too much risk or making trades that aren't based on sound analysis.
Cooling off after a big win can help you avoid this pitfall and keep a level head.

2
ASSESSING YOUR PERFORMANCE
After a big win, it's important to take some time to assess your performance. Review your trades, analyze
your strategies, and look for areas where you can improve. This self-reflection can help you continue to
grow and succeed in options trading.

3 AVOIDING EMOTIONAL DECISIONS

When you're riding the high of a big win, it's easy to make emotional decisions that aren't based on sound
analysis. Cooling off can help you avoid making rash decisions and ensure that you're making trades based
on data and analysis.

4
TAKE A BREAK
The first step in cooling off is to take a break. Step away from your computer, get some fresh air, or engage
in a relaxing activity that helps you decompress. Take your profits and walk away. Don't give it back!

5
REFLECT AND SET NEW GOALS
Use this time to reflect on your performance and assess your strategies. What did you do right? What could
you have done better? This reflection can help you continue to grow and improve as a trader. What do you
want to achieve next? Setting new goals can help you stay focused and motivated.

6
STICK TO YOUR PLAN
Finally, it's important to stick to your trading plan. Don't let the excitement of a big win cause you to
deviate from your strategy. Stick to your plan and continue to make data-driven decisions.

By cooling off after a big win, you can avoid overconfidence, assess your performance, and make smart, data-
driven decisions. Remember, options trading is a marathon, not a sprint. Take the time to cool off and stay focused
on your long-term goals.
CHAPTER 05 - PSYCHOLOGY 101 38

HANDLING FRUSTRATION
IMPATIENCE
Trading options can be tough, especially when you're feeling frustrated. It's easy to get down on yourself when you
haven't made any trades recently, or when you're not making the gains you were hoping for. But don't worry,
feeling frustrated is totally normal, and there are ways to deal with it.

Here are some tips on how to handle frustration in options trading:

1
ADMIT YOU'RE FRUSTRATED
The first step in dealing with frustration is admitting you're feeling it. It's normal to feel frustrated when
things aren't going your way, so don't beat yourself up for it. Just recognize that you're feeling frustrated
and try to figure out why.

2
REASSESS YOUR GOALS
If you're feeling frustrated because you're not making the gains you want, take a step back and reassess
your goals. Are they realistic given the market conditions and your experience level? If not, adjust your
goals so they're more achievable. Setting achievable goals will help you stay motivated and avoid getting
too frustrated.

3 STICK TO YOUR PLAN

When you're feeling frustrated, it's tempting to take risks you normally wouldn't. But it's important to stick
to your plan and not make any impulsive decisions. If a trade doesn't fit with your plan, don't take it.
Remember, risk management is key to successful options trading, and taking trades that don't fit with your
plan can lead to big losses.

4
TAKE A BREAK
Sometimes the best thing you can do when you're feeling frustrated is to take a break. Go for a walk, watch
some TV, or do something else that you enjoy. Taking a break will give you some space to clear your head
and come back to trading with a fresh perspective.

5
STAY POSITIVE
Finally, try to stay positive. It's easy to get down on yourself when things aren't going your way, but
remember that everyone has bad days. Stay focused on your goals and keep working at it. With a little
persistence, you'll start to see results.

It's okay not to trade everyday.

If your setup or edge isn't there, just sit on hands and watch the
market. Don't take impulsive trades out of boredom.
CHAPTER 05 - PSYCHOLOGY 101 39

FEAR OF MISSING OUT

IMPATIENCE
Options trading can be a thrilling experience, but it can also be stressful when you see other traders making big
gains while you're waiting for your setup to appear. This fear of missing out, or FOMO, is common among traders,
and it can lead to impulsive decisions that result in losses.

Here are some tips on how to recognize and handle FOMO in options trading:

1
RECOGNIZE THE FEELING
The first step in dealing with FOMO is recognizing when you're feeling it. This feeling often comes on when
you see other traders making big gains, and you start to worry that you're missing out on a great
opportunity. Acknowledging that you're feeling FOMO is the first step in managing it.

2
STICK TO YOUR PLAN
When you're feeling FOMO, it's tempting to make impulsive decisions and take trades that don't fit with
your plan. But it's important to stick to your plan and not get caught up in the hype. Remember, your plan
is based on your risk tolerance and market analysis, and taking trades that don't fit with your plan can lead
to significant losses.

3 TRUST YOUR ANALYSIS

When you're feeling FOMO, it's easy to doubt your analysis and start second-guessing yourself. But it's
important to trust your analysis and stick to your trading strategy. If you've done your research and
analyzed the market, then you should trust your analysis and not let FOMO cloud your judgment.

4
TAKE A BREAK
If you're feeling FOMO, take a break from trading. It's essential to step back and take time to clear your
head. Go for a walk, do some yoga, or do something else that helps you relax. Taking a break will allow you
to come back to trading with a clear mind and renewed focus.

5
CELEBRATE YOUR WINS
Finally, it's important to celebrate your wins, no matter how small they are. Focusing on your successes will
help you stay motivated and avoid getting too caught up in what other traders are doing. Remember,
every trader has a different trading style and risk tolerance, so what works for others may not work for you.

FOMO is a common feeling among options traders, but it can be managed with a little awareness and discipline.

Stick to your plan, trust your analysis, take a break when needed, and celebrate your wins.

With these tips, you'll be able to manage FOMO and stay focused on your trading goals.
CHAPTER 05 - PSYCHOLOGY 101 40

WOULDA COULDA SHOULDA

REGRET
Regret is a common emotion in options trading, and it can be particularly challenging to deal with. When traders
experience regret, they may dwell on past mistakes or missed opportunities, which can make it difficult to move
forward and make new trades. "I would have made 100% if I held", "I could have exited while green", "I should have
taken profits"...

So, how can you handle regret in options trading?

Here are a few tips:

1
ACKNOWLEDGE YOUR FEELINGS
The first step in dealing with regret is to acknowledge your feelings. Don't try to push your regret aside or
ignore it - instead, recognize that it's a normal emotion and allow yourself to feel it.

2
LEARN FROM YOUR MISTAKES
One of the best ways to overcome regret is to learn from your mistakes. Review your past trades, and look
for patterns or mistakes that you can avoid in the future. Use your regret as motivation to improve your
skills and knowledge.

3 FOCUS ON THE PRESENT

It's important to stay focused on the present when trading options. Don't dwell on missed opportunities or
past mistakes - instead, focus on the opportunities that are in front of you right now.

4
USE POSITIVE SELF-TALK
Negative self-talk can fuel regret and make it difficult to move forward. Instead, try to use positive self-talk
to reframe your perspective. For example, instead of saying "I missed out on a big opportunity," try saying "I
learned something from that trade, and I'll use that knowledge to make better decisions in the future."

5
TAKE CARE OF YOURSELF
Finally, it's important to take care of yourself when dealing with regret. Take breaks when you need them,
get plenty of rest and exercise, and surround yourself with positive people who support your trading goals.

By following these tips, you can handle regret in options trading in a healthy and productive way. Remember,
everyone makes mistakes - it's how you learn from them that counts.
CHAPTER 05 - PSYCHOLOGY 101 41

TRADE JOURNALING
SELF IMPROVEMENT
Keeping a trading journal is an essential aspect of a trader's activity. It helps traders keep a record of all their trades
and the decision-making process behind them.

By documenting the rationale for entering and exiting trades, traders can learn from their successes and mistakes
and make adjustments to their strategies. It also helps to identify patterns in their trading behavior and
understand their strengths and weaknesses.

Here is an example of some of my entries that I captured in my Trading Journal:

AMOUNT AMOUNT ENTRY/EXIT REASON

DATE/TIME CONTRACT GAIN PROFIT
IN OUT AND NOTES

Below ORB15 and

System Cloud. Entered
SPY 393p
FEB 24 $487 $248 -$239 -49% on new LOD break below
(0dte)
ORB30. No continuation.
Cut on close over ORB15.

Broke ORBH. Went with

TSLA 200c next weeks. Went +20%
MAR 3 $1,877 $1,879 $1 0.06%
(nextweek) then stopped out b/e.
Then rallied.

Below System Cloud,

TSLA Added at ORBH
MAR 7 $8,826 $12,129 $3,303 37%
187.50p (w) rejection. Trimmed at
ORB Targets.

You don't need a fancy journal. I do mine in Google Sheets. You could also do it in Excel. There are also tools like
TraderSync which have become popular.

The key is to log your trades and why you entered/exited when you did. Find themes, then improve from lessons
learned. Did you take trades not matching your rules/setups? Do you exit too early or not trim enough at your
targets resulting in giving back profits? Is your strategy consistent?

I also post Daily Recaps on Twitter to keep a public log of the charts I traded for the day and where I entered/exited
a trade. I also post where the ideal entries are based on my SORBET strategy rules. What this allows me to do is
have an objective analysis of my trading day. Did I miss setups - and if so why? Did I break rules and what was the
result of doing that. And I can go back to these charts at any time to review/revise my strategy to help learn and
improve from it.
CHAPTER SIX

FOCUSED STRATEGIES
When it comes to trading, new traders often find
themselves in a state of confusion and uncertainty.

They're faced with a barrage of information, alerts, and

opinions from other traders in their Discord Room or on
Twitter, but they lack a clear strategy of their own. As a
result, they end up feeling lost and unsure of what to do
next. How many times have you seen other traders post
trades after the fact, and you wonder to yourself why you
didn't see it? And now you just missed out on an
amazing trade.

Another common struggle new traders face is risk

management. You see everyone around you posting
huge gains, or percentage wins and wonder why you
can't do the same. It's easy to get caught up in the
excitement of trading, and before you know it, you've
taken on too much risk and you're facing significant
losses. This can be a painful and demoralizing
experience, and it's one that many new traders
unfortunately have to go through.

But perhaps the most frustrating thing for new traders is

the lack of transparency in the trading world. There are
so many traders out there who claim to have the secret
to success, but they're often unwilling to share their
strategies or explain clearly how they trade. Details may
be glossed over, or you follow their strategies but for
some reason don't see the same success that they claim.
This leaves new traders feeling like they're missing out on
something, like there's some secret they haven't been let
in on.

If you're a new trader who's struggling with these pain

points, let me tell you: you're not alone. I've been there,
and I know how it feels. But I also know that there's a
solution.

TRADING GUIDE
2023 EDITION
42
CHAPTER 06 - FOCUSED STRATEGIES 43

SEARCH FOR THE HOLY GRAIL

DELUSION
As a new trader, it's easy to fall into the trap of constantly searching for the holy grail of trading strategies that will
turn you into a consistently profitable trader. The truth is, there is no such thing as a perfect strategy that will win
every time. Most strategies will win only about 50% to 60% of the time, leaving plenty of room for losses and
drawdowns.

The delusion of new traders lies in the belief that success in trading is all about finding that one perfect strategy. In
reality, success in trading is much more about discipline, risk management, and mindset than it is about any
particular strategy.

While it's important to have a solid trading strategy, the most successful traders know that it's their ability to
execute that strategy with discipline and manage their risk that separates them from the pack. This means having
a clear set of rules for entering and exiting trades, sticking to those rules no matter what, and always managing
your risk to ensure you can survive the inevitable losses that come with trading.

1
MOST TRADING STRATEGIES ARE GOOD
The fact is that most trading strategies are similar in their win rate. The key difference between successful
and unsuccessful traders is how they manage risk and their mindset when it comes to trading. Successful
traders have a healthy respect for the risks involved in trading and always make sure they are in control of
their position sizes, stop losses, and overall risk exposure. They also have a mindset that allows them to
handle losses and drawdowns without losing their cool or deviating from their trading plan.

2 HAVE THE RIGHT MINDSET

The good news is that with the right mindset and a commitment to discipline and risk management, you
can start winning with any good strategy. It's not about finding the perfect strategy, but rather about
developing the skills and mindset necessary to execute that strategy with consistency and confidence.

3
EXPERIMENT AND LEARN
My recommendation is to experiment and learn from different strategies until you find the one that clicks
for you. It could be Inner Circle Trader (ICT), Moving Averages, Basic Support and Resistance, Opening
Range Breakouts (ORB), combinations of setups (SORBET), or even Options Flow Trading.

Try a strategy for about 2-3 weeks. If you feel it vibes with your personal style, and you consistently win
from it, then cut out the rest of the noise and just focus on that. Then keep refining it as you go, and slowly
start to scale up as your goals change. But in the start, you should be paper trading or trading extremely
small while you learn the ropes.

4
ATTENTION DIFFICULTY / IMPULSIVENESS
I have seen many new traders jump across 3+ discord rooms, following various Trader alerts, following
various different strategies. Some are 2 minute scalps, some day trades, some swings, and a bunch of
different strategies. Then they wonder why they have no consistency. They also aren't focused and aren't
learning how to trade for the long term. Once you focus on one strategy, you will learn to trade by yourself.
Cut out the noise!

So, if you're a new trader struggling to find that winning strategy, remember that it's not about the strategy itself,
but about your ability to execute it with discipline and manage your risk. Focus on developing those skills, and
success in trading will follow.
CHAPTER 06 - FOCUSED STRATEGIES 44

A+ SETUPS
Deciding when to enter into a trade really comes down to stacking reasons to for that trade that are in your favor.

The more reasons you have, the higher the probability of success. Learning this was one of the big reasons for
turning around my success rate with trading.

The A+ Setup is about taking the highest quality trades. Quality over Quantity!

Note, you can have 100 reasons to get into a trade, and it could still fail, so always have a plan on how much you are
willing to risk, and cut the trade when that happens. Even if you are on a 16 trade win streak with your strategy,
never go all in as eventually you will have a failed trade.

No one can ever guarantee the future.

C
CHECK IT OUT - IT IS JUST AN IDEA
You have an idea for a trade (friend sent you a text, you saw some options flow, Jim Cramer yelled BUY!)
At this point, the trade is something to look at, but you do not have a Trade Plan yet.

B BUILDING CONVICTION FOR THE IDEA

You have the idea and looked into the chart. The B Setup is taking that idea and adding your key levels,
moving averages - is there a trend supporting your idea? Did it just breakout? Are the candles in multiple
time frames supporting your thesis? What do you see that could invalidate the trade? Where will you trim
and where will you cut the trade?

A + ADDITIONAL POINTS OF CONVICTION

You have gone from having an idea for a trade, to having a trade plan. But will it work? What reasons exist
for the trade to fail (eg another key level acting as major resistance right above). To go from a B Setup to an
A+ setup, you need to have multiple reasons of conviction for entering the trade. It could be multiple
strategies telling you similar stories.

For me that is why SORBET strategy provides consistent A+ setups.

The System Cloud tells me the trend and if it is bullish or bearish on higher time frames (30m and 60m).
Let's say we are trading above the System Cloud, giving us a Bullish signal (eg look at CALLs on TSLA).

Then the ORB High Break gives another Bullish signal (another reason for CALLs on TSLA)

Other setups that can add to your conviction are:

VWAP Trend - Is it acting as support/resistance?

EMAs (Crossovers, Trend Support)
Fib Levels from higher time frames
Chart Patterns (eg Tweezers, Double Tops/Bottoms, etc)
Candlestick Patterns
CHAPTER 06 - FOCUSED STRATEGIES 45

STRATEGY: SORBET
SYSTEM + OPENING RANGE BREAKOUT

The SORBET strategy combines two already great

strategies - Opening Range Breakout (ORB), and The
System, to give consistent A+ setups.

The System dictates the directional trend of the higher

time frame chart, while ORB dictates when you should
enter and exit a trade based on the ORB levels set in the
first 15 minutes of the day.

When you combine the two strategies, you end up

taking Opening Range Breakout trades in the direction
of the higher time frame trends, thus giving you a
significantly higher probability of being in the right
direction.

SORBET works best on SPX/SPY and TSLA.

Your mileage may vary with other names.

CHAPTER 06 - FOCUSED STRATEGIES 46

WHY SORBET?
STRATEGY: SORBET
The SORBET strategy solves a few struggles that I faced with my trading.

1
PATIENCE
Patience is key for being a successful day trader. For me, SORBET's clear rules for when to enter a trade
allows me to patiently wait for that setup to occur. If I don't get it, then I may not even make a trade that
day. Other days I get the setup early on in the morning and I am done trading by 11am ET. As I have traded
SORBET for many months now, I've come to realize that I am most successful when I wait for the set up.

2
CUTS OUT THE NOISE
SORBET has clear rules on when to enter trades, and more importantly - when to sit on hands. When the
ticker is trading inside the chop zone, I know not to trade. I have watched others attempt to trade in this
zone and get chopped out time and time again. Because of SORBET's clear mantra of "Don't Trade In The
Chop Zone!", I can simply cut out all the noise from other traders during that time.

And because I focus on just this one strategy, and have consistently made money from it, it enables me to
start to ignore alerts that other traders send out. It's having the consistent simple strategy and framework
that allows me to stop playing other peoples games and chasing their alerts, and instead have the
confidence to focus on my own game.

3
CLEAR RULES
SORBET's clear rules of when not to trade (inside the chopzone), and when to be long vs short allows you to
be stubborn about what trades to take. That increases the quality of your trading. It reduces the mental
fatigue of why you should enter a trade based on strategy A, B, C, or D. Its just one strategy you have to
think about. The rules by nature make your entries an A+ setup. eg "Go Long Above The Cloud and Above
ORB range" - means you have a trend (The System Cloud), you broke through a key resistance level (ORB
High), and you aren't fading a higher timeframe trend. It is super easy to visually see on the chart also.

I will cover the rules in more detail in the upcoming pages.

4
WORKS IN BULL, BEAR, AND SIDEWAYS MARKETS
While I was learning and experimenting with a variety of strategies in 2022, I found some strategies only
worked in Bull Markets. Others only on strong trend days because they relied on low time frame moving
averages, but would do poorly on chop days and by the time you realize its a chop day you already lost 2-3
trades.

SORBET tells you when its choppy, so you sit on hands and don't trade. If that saves you from making
losing trades when the risk isn't worth it - then that is a big win, and gets you far on the road to maturity as
a trader. Then when you have a strong trend in the market (Bear or Bull), the System SMA's will tell you
about the trend and you trade with the market. This allowed us to short the hell out of TSLA back in Dec
2022 when it had a strong down trend. It also helped us get long again on its rally back up in Jan 2023.
And allowed us to avoid trading (or size down) when the markets trended sideways around SPY 400.
CHAPTER 06 - FOCUSED STRATEGIES 47

HOW DOES IT WORK

STRATEGY: SORBET
The SORBET strategy is actually pretty simple once you understand it.

1
THE SYSTEM CLOUD
The first part of SORBET is The System (created by Trader Brian Jones). It combines the 10sma and 50sma
from the 30 minute chart to give you a higher timeframe trend. If the 30min 10sma crosses below the 30m
50sma, it is bearish. If the 30min 10sma crosses above the 30min 50sma, it is bullish.

Generally, that means if you are trading above the 10/50sma cloud on the 30min timeframe, you want to
get long. If you are trading below the 10/50sma cloud, you want to get short.

2
THE OPENING RANGE BREAKOUT
The second part of SORBET is the ORB. The Opening Range Breakout works by taking the high and low of
the first 15 minutes of regular session (so 9:30am - 9:45am ET). After 9:45am, if price breaks and holds above
the ORB High level, then that is a Bullish move, and you want to look for longs. Likewise, if price breaks and
holds below the ORB Low Level, then that is a Bearish move, and you want to look for shorts.

3
SORBET - THE A+ STRATEGY
SORBET becomes an A+ strategy when you combine the above two concepts. The higher timeframe trend
from The System tells you the way the market is moving. While the ORB tells you the way the market
wants to move on the particular day. When both of these align, you get a higher conviction trade in the
direction of the trend. So, get long when above the cloud AND above ORB. Get short when below the
cloud AND below ORB. Avoid trading while inside the ORB range and inside the System Cloud.

I used to trade ORB alone (before I learned about The System), and my biggest frustration was getting the
fake breakouts, or getting chopped up on sideways days where the ORB levels would break, but there
would be no continuation. Once I learned about The System, I was able to avoid chop days, and move the
probability of winning trades in my direction by trading the trend.

THE ORB RANGE

BULLISH SYSTEM CLOUD

BEARISH SYSTEM CLOUD
CHAPTER 06 - FOCUSED STRATEGIES 48

BACKTESTING
STRATEGY: SORBET
As I learned to day trade, every mentor I had said the best traders trade like a robot. The algo's they said - they
aren't emotional. They don't hesitate. The algo's have clear rules to follow, and they know when to exit a trade.

Then they would go on and teach me some of their own strategies. But when I would take trades (based on the
rules I was told), I would have inconsistencies. There would always be an "oh, you also need to look at this rule, or
that rule", and suddenly the rules were more of a guide, and the strategy became more of an art form.

My entire career has been in Software Engineering. So, I decided to leverage that expertise and started
programming the rules for various strategies into TradingView. They have an awesome tool that takes the rules
and back tests it against a chart, going back a year. I could see based on the rules I created just how successful
these strategies were, and then refine the rules to improve win percentages and profit factors.

As I did this with multiple strategies (ORB breakouts, EMA crossovers, Peaky Retests, Golden Pockets), I discovered
which ones worked better than others. I always loved the ORB strategy due to its simplicity, and combining it with
The System strategy produced some really great results.

The below stats using SORBET for TSLA shows it is currently 69% profitable (one year backtested). I can also look
back at winning and losing trades to learn how I can refine the rules to do even better. Now the strategy becomes
data driven rather than based on gut instinct, and that makes this strategy immensely powerful!
CHAPTER 06 - FOCUSED STRATEGIES 49

WINNING TRADES
STRATEGY: SORBET
There are countless examples of SORBET having winning trades - best place is to go look at my Daily Recaps.

Here are some examples of trades I took and my thought process behind them. Base Hits add up!

70% 25%

ABOVE ORB, ABOVE CLOUD: GO LONG ABOVE ORB, ABOVE CLOUD: GO LONG
BELOW ORB, BELOW CLOUD: GO SHORT
CHAPTER 06 - FOCUSED STRATEGIES 50

WINNING TRADES
STRATEGY: SORBET
Here are a couple of examples of trades I missed but met the rules and had great continuation!

200% 500%

BELOW ORB, BELOW CLOUD: GO SHORT BELOW ORB, BELOW CLOUD: GO SHORT
CHAPTER 06 - FOCUSED STRATEGIES 51

LOSING TRADES
STRATEGY: SORBET
Like any strategy, SORBET can still give false signals. Trades that I would still take every time as it meets the rules -
but unfortunately the market gods decided not today!

Risk management is key. Accepting that not all trades will work out is key. Sometimes they work, but you get
greedy holding out for your target, which doesn't hit. And that is okay. As long as you allow your winners to win
more, and you recognize losers quickly so your losses are small, then you will win at this game of Trading. Not every
day will be a green day, but keep the red days small. And capitalize on the green days. So that you have green
weeks, and then green months. And slowly chip away at your goals with small losses and bigger wins.

Here are some examples of false signals that SORBET has given, and how to know when to cut those trades:

14% 15%

BELOW ORB, BELOW CLOUD: GO SHORT BELOW ORB, BELOW CLOUD: GO SHORT
CUT ON RECLAIM ON HOURLY 50SMA GOT GREEDY, DID NOT TRIM
CUT ON CLOUD RECLAIM
CHAPTER 06 - FOCUSED STRATEGIES 52

THE CHOP ZONE

STRATEGY: SORBET
The SORBET chop zone exists when price is trading either inside The System Cloud, or inside the ORB range.

Both situations are considered choppy and price is usually range bound.

The safer play here is to avoid trades in these zones until price breaks out and the trend becomes clear.

INSIDE CLOUD = CHOP ZONE INSIDE CLOUD = CHOP ZONE

INSIDE ORB = CHOP ZONE
CHAPTER 06 - FOCUSED STRATEGIES 53

THE CONFLICT ZONE

STRATEGY: SORBET
The SORBET Conflict Zone exists when ORB and The System Cloud are telling opposite stories.

The chart could be trading

Below the Cloud (Bearish), but Above the ORB range (Bullish).
Above the Cloud (Bullish), but Below the ORB range (Bearish).

In this scenario, the price action for the day does not match the higher time frame trend, thus it is safer to not
trade in this zone. It could be an indication of a potential trend change incoming, or just a pullback to the trend.

ABOVE ORB, BELOW CLOUD BELOW ORB, ABOVE CLOUD

LATER, DROPPED BELOW CLOUD FOR AN ENTRY
CHAPTER 06 - FOCUSED STRATEGIES 54

BASIC SETUP
STRATEGY: SORBET
The are a few things you need to add to your chart for SORBET.

1
ADD THE OPENING RANGE
The Opening Range is the HIGH and LOW of the first 15 minutes of the market (930a - 945a). So, after the
close of the first 15minute candle, draw a horizontal line at the HIGH and LOW of that candle. This is your
Opening Range.

You only want to think about taking a LONG position above this range, or a SHORT position below this
range. Trading inside this range should be avoided, to help you stay away from Chop.

HIGH OF FIRST 15 MINUTES

5 MINUTE CANDLES
LOW OF FIRST 15 MINUTES

2
DETERMINE YOUR ORB FIB TARGETS
Trim targets are determined based on Fibonacci Extensions using the Opening Range. Daily price action
has this uncanny ability to find resistance at these predetermined Fib Targets. Call it nature, or algo's, or
whatever you want. It just works for some reason.

Grab your fib retracement tool, and drag from the ORB High to the
ORB Low. Set Fib Extensions for 1.272, 1.618, 2.0, 2.618. Likewise in
the other direction below ORB range: -1.272, -1.618, -2.0, -2.618.

My Cash+ Indicator for SORBET helps plot these ORB levels and fib targets automatically for you to make it
simpler!
CHAPTER 06 - FOCUSED STRATEGIES 55

BASIC SETUP
STRATEGY: SORBET
Once you have your ORB lines, you will need to add the System SMA's to your chart to help you see the market
trend on higher timeframes.

2 ADD THE SYSTEM CLOUD

The 30 minute system cloud is based on the 10 SMA and 50 SMA on the 30 minute chart.
The 60 minute system cloud is based on the 10 SMA and 50 SMA on the 60 minute chart.

If you prefer to trade on the 5 minute chart instead, then you can translate this to the 5 minute:

SMA 5MIN CHART 15MIN CHART 30MIN CHART

30min 10sma 60sma 20sma 10sma

30min 50sma 300sma 100sma 50sma

60min 10sma 120sma 40sma 20sma

60min 50sma 600sma 200sma 100sma

My Cash+ Indicator for SORBET helps plot these SMAs onto multiple timeframes for you automatically so
you dont have to remember these conversions!
CHAPTER 06 - FOCUSED STRATEGIES 56

SIMPLIFY WITH CASH+

STRATEGY: SORBET
Setting up the ORB range and daily ORB fib targets can be annoying to do every day. Likewise, when trading it is a
good idea to look at various timeframes to understand the trend.

I find myself constantly flipping through the 15minute, 5minute, and 1minute charts. I take most of my trades on
the 5 minute chart, but I will look at the 15minute chart to confirm trend direction. Once in a trade I may switch to
a 1 minute chart to help take more precise exits at an ORB fib target. Then watch on a 5 minute chart the rest of
the trade.

1
OPENING RANGE
The Cash+ SORBET indicator automatically plots the ORB range and ORB targets for you. You can just
focus your time on the chart.

2
THE SYSTEM CLOUD
The 10/50sma from the 30m and 60m charts are automatically drawn for you, and recalculated as you flip
through timeframes. The 30m sma cloud is filled (ripster style cloud), so its even more visual to see the
trend from The System.

3
COLORED CANDLES
To aid more with understanding how to trade SORBET, the candle colors are modified by the indicator.
Instead of red down candles and green up candles, SORBET will show the following candle colors:

CANDLE COLOR WHAT IT MEANS

BLUE STRONG BULLISH: Above ORB, Above Cloud, Bullish Momentum.

AQUA MILD BULLISH: Above ORB, Above Cloud, Bearish Momentum.

ORANGE CHOP ZONE: Avoid Trades in this area.

PINK MILD BEARISH: Below ORB, Below Cloud, Bullish Momentum.

MAROON STRONG BEARISH: Below ORB, Below Cloud, Bearish Momentum.

GRAY CONFLICT ZONE: ORB and System Cloud have opposing directions.

4
ALERTS
An alert is fired and shown on the chart when SORBET determines high probability entries based on the
programmed rules and backtesting.

Note - alerts can be wrong, and you need to do proper risk management!
CHAPTER 06 - FOCUSED STRATEGIES 57

SIMPLIFY WITH CASH+

STRATEGY: SORBET
With the Cash+ SORBET indicator, it will simplify your trading setup by automating the work, so you can focus on
executing the trade:

5
FEATURES
ORB Range automatically plotted
ORB Fib Targets automatically provided
System Cloud SMAs automatically plotted, working with multiple timeframes
Candles Colored based on the SORBET rules
Entry Alerts with helpful tooltips
Overbought/Oversold Bollinger Bands
CHAPTER 06 - FOCUSED STRATEGIES 58

GETTING THE INDICATOR

STRATEGY: SORBET
With the Cash+ SORBET indicator, it will simplify your trading setup by automating the work, so you can focus on
executing the trade. Once you sign up as a subscriber or want to try it out with our 14 day free trial, you can add
the indicator to your charts in TradingView.

https://www.getthatcashmoney.com/services/

1
ADD THE INDICATOR - CASH ORB LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash ORB Levels".
CHAPTER 06 - FOCUSED STRATEGIES 59

INDICATOR SETTINGS
STRATEGY: SORBET
With the Cash+ SORBET indicator, it will simplify your trading setup by automating the work, so you can focus on
executing the trade. Once you sign up as a subscriber or want to try it out with our 14 day free trial, you can add
the indicator to your charts in TradingView.

1
CONFIGURE YOUR SETTINGS
Select the Cog to configure the settings. The Defaults should be good to start with. Below is how mine are usually
set. You can enable Fibonacci Price Targets to see where your trim targets should be.
CHAPTER 06 - FOCUSED STRATEGIES 60

ENTERING A TRADE
STRATEGY: SORBET

ABOVE CLOUD + ABOVE ORB = GO LONG

BELOW CLOUD + BELOW ORB = GO SHORT

Enter on the Break AND Hold of the cloud and ORB range. Once the level has breached, wait for the 5 minute
candle to close over your level. Then watch the next 5 minute candle to hold (either continuation with volume, or a
retest and close still over.

See section on trading Breakouts for more information on how to trade a Breakout.
CHAPTER 06 - FOCUSED STRATEGIES 61

AVOIDING A TRADE
STRATEGY: SORBET

INSIDE CLOUD | INSIDE ORB = CHOP ZONE

Avoid trading inside the ORB range or inside The
System Cloud. These area's tend to be where bulls and
bears fight hard and the odds of you winning become
much harder.

BELOW CLOUD + ABOVE ORB | ABOVE CLOUD + BELOW ORB = CONFLICT ZONE

Avoid trading inside the conflict zone. In this area, the

day is trending opposite to the higher time frame,
suggesting a reversal may occur, or significant pull
back is happening. This area can be difficult to trade
due to the conflicting trends.
CHAPTER 06 - FOCUSED STRATEGIES 62

KNOW YOUR LEVELS

STRATEGY: SORBET

HOURLY SMA SUPPORT AND RESISTANCE

The Hourly 10sma and Hourly 50sma will often act as key support and resistance.

When entering a trade, be aware of your distance to the hourly sma's. If they are nearby, it may be worth waiting
for that hourly sma to break and hold to improve your risk:reward. If already in a trade, these can be considered
trim spots.

KEY LEVEL SUPPORT AND RESISTANCE

PREMARKET HIGH / PRIOR DAY HIGH

PRIOR DAY CLOSE

PREMARKET LOW

Key Levels such as PreMarket High/Lows, and Prior Day High/Low/Close are important when evaluating entry risk,
as chances are high that we get a rejection of those levels. Evaluate distance to those levels when entering, or if
already in a trade consider trimming at those key levels.
CHAPTER 06 - FOCUSED STRATEGIES 63

POSITION SIZING
STRATEGY: SORBET
Once I have found my entry based on SORBET, and I understand where my price targets are and where key levels
of support/resistance are, the next step for me is determining my position size.

FULL POSITION
To start with, a full size position for me is about 5% - 10% of my account size, usually about $8k - $10k. This is when I
have very high conviction about a trade. I only started trading with this kind of size after I already grew my
account by about $40k in profits, and had consistency in my trading. In other words, I am risking profits only from
the year.

If you are starting out and don't have consistency, then a full position size for you should be less than $1,000,
regardless of how big your account is. Get the process down first, then scale up as you build confidence.

HALF POSITION
Most of the time, I will trade with a half position (usually around $3k - 5k for me. The following are reasons for me
to decide to go in half sized instead of full sized:

Hesitancy - If my gut for whatever reason is feeling nervous about a trade, I trust it and just size down.
Personal Bias - If the chart and signals are all Bullish, but the narrative around me is to be short, then I will still
follow what SORBET is telling me, but to hedge my risk I will size down (just in case). Now, over time I expect to
cut out that noise, but the reality is the noise does get to you, and if its a reason to counter your idea then just
size down to manage that risk.
News - If there is news scheduled for later in the day I will size down. Examples are a mid-level Fed speaker
doing their media rounds, or the President is expected to speak, etc. I don't expect the news to be a major
market mover, but it could affect the trade, so sizing down helps manage that risk.
Risk:Reward - If I see Key Levels near my entry, I will size down knowing that there is risk at that level.

STARTER POSITION
Occasionally, I will take a starter position. This is a position with 1 - 2 contracts. Usually a total of less than $1,000.

These are the reasons I may take a tiny starter position:

Breakout Trade/FOMO - sometimes when my level breaks, it is moving fast that I don't want to miss out on the
trade (FOMO). If the breakout has not confirmed yet, then I may get a starter position so that at least I can
participate in the trade if it runs without me. Sometimes I will get in before the ORB range is set. Realize that
more often than not, a breakout will fail to confirm and reclaim your level - so being in small significantly limits
that downside risk.
Losing Streak - it happens. Sometimes the Gods are against you. Other times you just stopped reading the
chart properly, or got frustrated and did stupid shit. We are human, and regardless of what you learned and
read here about Being Disciplined, at times you will forget all of it and just do stupid shit that you know better.
So, size down when you have a big losing day. Get back the consistency with back to back small wins. Go back
to Trading 101 to get back in that winner mindset.
News - If it is FOMC day, or Jerome Powell is speaking, or other major news is expected to hit. Size down so you
can trade, but not get fucked up by the volatility that invalidates all Technical Analysis.
Not Feeling It - Sometimes your mood is just off. Mind is not focused, or Distracted because Kids are at home
today, etc. Whatever your reason, you may still want to trade. So trade small in those situations.
 CHAPTER 06 - FOCUSED STRATEGIES 64

TRIM TARGETS AND RUNNERS

STRATEGY: SORBET

Stop Loss

Entry

Target 1

Stop Loss
Target 2

Target 3

1
TRIM TARGETS
Trim as you approach each ORB Fibonacci Target.

I will usually trim 50% - 75% of my position at the ORB 61.8% Fib Target.
Then scale out a few more at the 100% Fib, leaving only runners after that (if you want).

2
TRIM INTO STRENGTH
It is always best to trim into strength, so as your target fib is approaching, trim into the move. If you wait for
hit to hit and start getting a pullback, you will end up with a worse fill price!

3
CUTTING THE TRADE
Stop Loss will be a close back into the ORB range, or a close back into the System Cloud (whichever
happens first).

If you have already taken profits on the trade, then don't let it go red! Once you are left with runners, set a
trailing stop.
CHAPTER 06 - FOCUSED STRATEGIES 65

CUTTING A TRADE
STRATEGY: SORBET

1
STANDARD CUT RULE
Most of the time, I will cut a trade if ORB range is reclaimed (candle close back inside it), or if the System
Cloud is reclaimed. At this point, your reason for entering the trade has been invalidated, so it is best to cut
it. If the levels breakout again, you can always re-enter the trade.

2
KNOW YOUR RISK
There are times when I may give a trade some more room. When I do this, I have to be very aware of my
emotions - am I trading to a plan, or am I trading on hopium - looking for new levels to convince myself of
the trade!

In this example, I entered TSLA calls on the ORB High break (per
SORBET rules).

The candles rejected at PreMarket High, and reclaimed the ORB range.
Normally this would be a reason to cut the trade.

I decided to hold on as I was sized smaller, so willing to give it more

room. I also saw the hourly 10sma nearby and ORB Mid levels which will
typically act as support. A close below that and I would cut. When it
did close below, I set a stop at the low price at that point so any
continuation down further would have stopped me out of the position.

TSLA found support at that level, and continued higher the rest of the
day. If it fell through, it would have been a 45% loss on the trade which
was near the maximum I personally was willing to risk.

3
CUT LOSERS FAST, LET WINNERS RUN
The key to being a successful trader is to ensure your winners win more, and your losing trades lose less.
Go back to review my page on Selling Early. With proper sizing and risk management, you want to be
hitting 25% plus on your winning trades, ideally those also are sized full or half. With the losing trades,
based on your entry, and theta decay, you want to be cutting them before they are down 25% plus (based
on the chart though). Ideally with the riskier trades that do end up losing, you were also sized down, thus
limiting their impact to your portfolio.

Focusing on scaling up slowly as you build profit cushion (see Delayed Gratification), and managing risk are
your priorities so that over time your account is growing with no significant draw downs. Losses will
happen. Just manage the size of those losses.
CHAPTER 06 - FOCUSED STRATEGIES

STRATEGY: SORBET

CHECKLIST

This simple printable checklist allows you to determine if you have an A+ setup before
taking the trade.

If you dont have each box checked, then you can still take the trade, but know that it is
riskier so you should likely size down to better manage the higher risk.
1 ABOVE THE CLOUD AND ABOVE ORB = GO LONG 2 BELOW THE CLOUD AND BELOW ORB = GO SHORT

ORB RANGE

30m 10sma

30m 50sma 30m 10sma

ORB RANGE

3 AVOID THE CHOP ZONES AVOID THE CONFLICTING ZONES

ORB RANGE
30m 10sma

30m 10sma

ORB RANGE
30m 50sma
INSIDE THE CLOUD = AVOID ABOVE ORB + BELOW CLOUD = AVOID
INSIDE THE ORB = AVOID BELOW ORB + ABOVE CLOUD = AVOID

4 TRIM PROFITS AT ORB TARGETS

THE SORBET STRATEGY

CHAPTER 06 - FOCUSED STRATEGIES 68

DAILY RECAPS
STRATEGY: SORBET

I highly recommend as homework you review my Daily Recaps at

https://www.getthatcashmoney.com/daily_recaps/

There, I review every trading day and entries/exits I took based on the SORBET strategy.

The bottom section uses the Checklist from the previous page to review the entries.

These recaps serve as live examples of trades using this strategy, and will help you learn
with examples.
SORBET STRATEGY

POP QUIZ
1
SPX is trading above the 30m System Cloud, and just broke ORB Low
a) Buy Calls
b) Buy Puts
c) No Trade

2
SPX is trading below the 30m System Cloud, and just broke ORB Low
a) Buy Calls
b) Buy Puts
c) No Trade

3
TSLA is trading inside the 30m System Cloud, and above ORB High
a) Buy Calls
b) Buy Puts
c) No Trade

4
TSLA is trading above the 30m System Cloud, and just broke ORB High
a) Buy Calls
b) Buy Puts
c) No Trade

5
QQQ is trading above the 30m System Cloud, and inside the ORB range
a) Buy Calls
b) Buy Puts
c) No Trade

1c, 2b, 3c, 4a, 5c

CHAPTER SEVEN

READING THE CHART

When it comes to trading, whether you're investing in stocks,
cryptocurrencies, or other assets, one of the most important
tools in your arsenal is technical analysis. This approach involves
analyzing price movements and chart patterns to identify
trends and potential trading opportunities. In other words, it's
all about "reading the chart."

Technical analysis is based on the idea that past price

movements can help predict future price movements. By
analyzing patterns in the charts, traders can gain insight into
market sentiment and identify potential entry and exit points.
The goal is to use this information to make informed trading
decisions and maximize profits.

One of the most common tools used in technical analysis is the

candlestick chart. This type of chart shows the open, high, low,
and close prices of an asset over a specified time frame. By
analyzing the patterns formed by the candlesticks, traders can
identify trends, support and resistance levels, and potential
reversal points.

Other technical analysis tools include moving averages,

Bollinger Bands, Relative Strength Index (RSI), and many more.
Each tool provides a different perspective on the market and
can help traders make more informed trading decisions.

It's important to note that technical analysis is just one

approach to trading, and it has its limitations. It can be difficult
to predict market movements with 100% accuracy, and relying
too heavily on technical analysis can be risky. It's important to
combine technical analysis with other forms of analysis, such as
fundamental analysis, to gain a more complete understanding
of the market.

In this chapter, we will review some common chart pattern

strategies.

TRADING GUIDE
2023 EDITION
70
CHAPTER 07 - READING THE CHART 71

IDENTIFY KEY LEVELS

If you are a Day Trader, it is important you are familiar with certain Key Levels that come
in to play each day.

At minimum, you need to be aware of the following Key Levels:

Yesterday High
Yesterday Low
Yesterday Close (Gap Fill Level)
Premarket High
Premarket Low

Other Key Levels that are useful are the Opening Range (ORB) High and Low as they
define if we will chop all day or set a direction.

Finally, if you have a watchlist with levels, you will want to mark those levels on your
charts.

TRADING KEY LEVELS

The best way to trade key levels is using the Break Hook and Go.

The Break Hook and Go technique requires you to patiently wait for a key level to break,
then retest and hold, before continuing.

This allows you to confirm the level is valid for the day and is holding as key
support/resistance.

The retest after the break confirms its strength, and then you can enter the trade.
CHAPTER 07 - READING THE CHART 72

FIBONACCI LEVELS
WHAT IS THIS VOODOO, AND WHY DO THEY WORK
Fibonacci levels are a popular technical analysis tool used by traders to identify potential support and
resistance levels in financial markets. The tool is based on the Fibonacci sequence, a mathematical
sequence of numbers where each number is the sum of the previous two. In trading, Fibonacci levels are
used to identify potential areas where the price of an asset may experience a reversal or continue in its
current direction.

WHERE TO ADD THEM

To use Fibonacci levels, we typically draw horizontal lines across the chart at key levels, including the 23.6%,
38.2%, 50%, 61.8%, and 100% levels. These levels represent the percentage of a price move that is expected
to retrace back to that level. For example, if the price of an asset increases by $10, the 38.2% Fibonacci level
would represent a potential retracement of $3.80.

To draw them, you're charting software will usually include a Fibonacci Tool. You then take the high and
low pivot of a range to plot out the Fibonacci Retracements and Extensions.

My ORB strategy for example will take the ORB High and ORB Low to plot out the ORB Fib Targets where
the strategy recommends to trim your position.

The Daily Fib Pivots indicator takes the previous day High and Low to determine Fib Targets for the day.

And for Longer Time Frame Fib levels, go out to the Daily Chart, and find key pivot areas where price
direction flipped, and plot your Fib Levels between those High/Low ranges.

HOW TO TRADE WITH THEM

We use Fibonacci levels in combination with other technical analysis tools, such as trend lines, moving
averages, and candlestick patterns, to identify potential trade setups.

For example, if the price of an asset is approaching a key Fibonacci level and there is also a Break Hook and
Go off the key level, you may interpret this as a potential buy signal.

The Golden Goose Strategy relies on the 21ema on the 5min chart to overlap a Longer Time Frame Fib
Level. The combination of the 21ema as support along with a key Fib Level provides multiple levels of
conviction for a trade.
CHAPTER 07 - READING THE CHART 73

THE BREAK HOOK AND GO

BREAK WITH VOLUME HOOK (RETEST) OF LEVEL AND GO (CONTINUATION)

The Break refers to the scenario Once price has broken through Once the retest occurs, you want
where price action breaks through the support/resistance level, often to ensure that level is held. It can
a key level you may have (THE it will come back to retest the happen that the price falls back
BREAKOUT). Although many level. This is known as the Hook (or through the level and closes under
traders will trade a breakout, there Retest). it, invalidating the original
is inherent risk in doing so as price breakout.
has moved away from the key In the above image, what was
support/resistance, thus reducing once support was broken. We now In the case that the level is held -
your risk to reward ratio as your wait for confirmation for this level we retested it and price is starting
stop will be further away from the to become resistance. 5 candles to move back up (with the candle
entry price. Also in the case of after the break, you see price closing over the level again), this is
options, the breakout may have retest the level. It wicked slightly an indication of the bounce and a
caused an IV spike, resulting in above, but closed below the level, safe place to enter. You want to
you paying a higher premium on confirming it as resistance. Further place your initial stop just below
the breakout. conviction is added on the next the level, and move stops as price
candle where the level again has moves in your favor to guarantee a
As you can see in the above held, and price direction has now win and maximize gains.
image, when the candle broke reversed from that level.
through the previous support line, I will generally allow price to move
there was continuation for a Safe places to enter a trade at this to the next leg down before
couple of candles, but price then point is as close as possible to the moving my stop to break even to
quickly reversed. Traders caught level once we retest it and close account for volatility in the move.
chasing those breakout candles under it. Your stop would be As we continue to move, then I will
will likely now have to sit through placed just over the line move stops based on my profit
a reversal, and stressing through (accounting for the volatility of the taking goals.
the trade. It is far safer to wait for ticker at the time).
the retest of the level after the
break.
 CHAPTER 07 - READING THE CHART 74

THE BREAKOUT
A breakout occurs when a key support/resistance level breaks. This could be the ORB
High/Low, A gap fill, Key Fib Levels, or even a Moving Average you use. Once you have a
strong breakout, wait for the retest (hook) and go.

BULLISH BREAK

WEAK BREAK STRONG BREAK

To trade a strong bullish break, ensure the break candle
has the majority of its price action above the your level.
Then enter on the retest/hold of that level.

If the level doesn't hold, then do not enter.

BEARISH BREAK

WEAK BREAK STRONG BREAK

To trade a strong bearish break, ensure the break candle
has the majority of its price action below the your level.
Then enter on the retest/hold of that level.

If the level doesn't hold, then do not enter.

True breakouts will have continuation, so you can still capture a large portion of the move
by being patient. So stop FOMOing into a trade by buying false breakouts!
CHAPTER 07 - READING THE CHART 75

THE REVERSAL
INSIDE BARS
An inside bar is a candlestick pattern that occurs when the range of a price bar is
completely contained within the range of the previous bar. It can indicate that the
market is taking a breather and consolidating after a strong move.

To trade inside bars, traders can wait for the price to break out of the range of the
inside bar. If the price breaks out to the upside, it can be a bullish signal, and traders
can look to enter long positions. If the price breaks out to the downside, it can be a
bearish signal, and traders can look to enter short positions.

OUTSIDE BAR REVERSALS

An outside bar reversal occurs when the high of the current bar is higher than the
high of the previous bar and the low of the current bar is lower than the low of the
previous bar. It can be a strong signal that the market is about to reverse.

To trade outside bar reversals, traders can wait for the price to break out of the range
of the outside bar. If the price breaks out to the downside, it can be a bearish signal,
and traders can look to enter short positions. If the price breaks out to the upside, it
can be a bullish signal, and traders can look to enter long positions.

OUTSIDE BAR CONTINUATION

An outside bar continuation candle occurs when the high of the current bar is higher
than the high of the previous bar, but the low of the current bar is not lower than the
low of the previous bar. It can indicate that the market is likely to continue its trend.

To trade outside bar continuation candles, traders can look for opportunities to enter
trades in the direction of the trend. For example, if the price has been trending higher
and an outside bar continuation candle forms, traders can look for opportunities to
enter long positions. Likewise, if the price has been dropping, and price drops lower
with continuation in the trend, you can go short.
CHAPTER 07 - READING THE CHART 76

VOLUME AND PRICE ACTION

RECOMMENDED READ: ANNA COULLING - VOLUME PRICE ANALYSIS
Trading Volume and Price Action is a great way to gain insights into market dynamics and identify potential
trading opportunities.

1
GET TO KNOW THE BASICS OF VOLUME PRICE ACTION
To get started, it's important to understand the basics of volume price action. Essentially, this refers to the
relationship between the price of an asset and the volume of trades executed in the market. When the
price of an asset rises and the volume of trades also increases, it suggests there's strong buying pressure in
the market. On the other hand, when the price falls and the volume increases, it suggests there's strong
selling pressure.

By understanding these basics, you can start to identify potential trading opportunities based on the
relationship between price and volume.

2
USE VOLUME INDICATORS TO CONFIRM PRICE ACTION
Volume indicators are a great tool to use alongside price action analysis. These technical indicators track
the volume of trades executed in the market. By using them to confirm price action, you can gain
additional insights into the underlying market dynamics and identify potential trades.

For example, the on-balance volume (OBV) indicator tracks the cumulative volume of trades executed in
the market. This can be used to confirm trends and potential reversals. If the price of an asset is rising and
the OBV is also rising, it suggests there's strong buying pressure in the market - a bullish signal. Conversely,
if the price of an asset is falling and the OBV is also falling, it suggests there's strong selling pressure - a
bearish signal.

3 LOOK FOR VOLUME PRICE ACTION PATTERNS

In addition to using volume indicators, you can also look for specific volume price action patterns. These
can help you identify potential trading opportunities. For example, a volume spike on a breakout can
indicate there's strong buying pressure and the breakout is likely to continue. Similarly, a volume spike on a
reversal can indicate there's strong selling pressure and the reversal is likely to continue.

By identifying these volume price action patterns, you can make more informed trading decisions.

4
PRACTICE PROPER RISK MANAGEMENT
It's always important to practice proper risk management when trading volume price action. Make sure
you use stop-loss orders to limit potential losses and don't risk more than you can afford to lose.

Remember, there are always risks associated with trading volume price action, including false signals and
market volatility. By practicing proper risk management, you can minimize your potential losses and
maximize your potential gains.

Trading volume price action is a great way to gain insights into market dynamics and identify potential trading
opportunities. By understanding the basics of volume price action, using volume indicators to confirm price action,
looking for volume price action patterns, and practicing proper risk management, you can increase your chances
of success. Remember, no trading strategy is foolproof, so always be prepared for potential risks and losses.
CHAPTER 07 - READING THE CHART 77

DOUBLE TOPS/BOTTOMS
A double top is a chart pattern that occurs when an asset's price rises to a certain level, then falls back down, and
then rises again to the same level, but fails to break through it. The pattern looks like two peaks, with a valley in
between.

On the other hand, a double bottom is a chart pattern that occurs when an asset's price falls to a certain level, then
rises back up, and then falls again to the same level, but fails to break through it. The pattern looks like two valleys,
with a peak in between.

1
WAIT FOR CONFIRMATION
One of the key things to keep in mind when trading double tops and double bottoms is to wait for
confirmation before entering a trade. This means waiting for the price to break through the pattern's
neckline before entering a trade.

For a double top, the neckline is drawn across the two valleys that form the bottom of the pattern. For a
double bottom, the neckline is drawn across the two peaks that form the top of the pattern. Once the price
breaks through the neckline, it confirms the pattern and signals a potential trend reversal.

2
USE VOLUME AND MOMENTUM INDICATORS
Volume and momentum indicators can be very useful when trading double tops and double bottoms.
High trading volume and strong momentum can confirm the pattern and provide additional signals that a
reversal is likely.

For example, you can use the Relative Strength Index (RSI) to measure momentum and confirm the
pattern. If the RSI is trending downwards while the pattern is forming, it can indicate a potential reversal.

3 SET STOP LOSSES AND TAKE PROFITS

As with any trading strategy, it's important to manage risk by setting stop losses and take profits. A stop
loss can limit potential losses if the trade doesn't go as planned, while a take profit can lock in profits when
the trade is successful.

When trading double tops and double bottoms, it's often a good idea to set the stop loss just below the
neckline for a double top and just above the neckline for a double bottom. This can help limit potential
losses if the pattern fails to confirm.

4
BE PATIENT
Finally, it's important to be patient when trading double tops and double bottoms. These patterns can take
some time to form and confirm, so it's important to wait for the right signals before entering a trade.
Rushing into a trade based on incomplete signals can lead to losses.

Double tops and double bottoms can be very effective reversal chart patterns when traded correctly. By waiting for
confirmation, using volume and momentum indicators, setting stop losses and take profits, and being patient, you
can increase your chances of success when trading these patterns. However, as with any trading strategy, it's
important to manage risk and be prepared for potential losses.
CHAPTER 07 - READING THE CHART 78

EXAMPLES
DOUBLE TOPS AND DOUBLE BOTTOMS

DOUBLE TOP DOUBLE TOP

A double top occurs when you get equal highs where the
price rejects. It is confirmed when price exceeds the peak of
the valley.

You can enter puts on a reject and hold off the equal high,
with a stop above the high.

DOUBLE BOTTOM
A double bottom occurs when you get equal lows where the
price bounces. It is confirmed when price exceeds the peak
of the valley.

You can enter calls on a bounce and hold off the equal low,
with. a stop below the low.

DOUBLE BOTTOM
CHAPTER 07 - READING THE CHART 79

TWEEZERS
A tweezer top and bottom pattern is a type of candlestick pattern that occurs when two
candles have almost the same high or low, respectively.

TWEEZER BOTTOM (BULLISH)

The tweezer bottom pattern occurs when there are two

candles with almost the same low, and the second
candle has a bullish (green) body.

EQUAL LOWS

TWEEZER TOP (BEARISH)

EQUAL HIGHS
The tweezer top pattern occurs when there are two
candles with almost the same high, and the second
candle has a bearish (red) body.

To trade this pattern, you'll want to look for it on a chart and then take action based on
the type of pattern you see. If you see a tweezer top pattern, it may indicate that the price
is about to go down, so you could consider placing a short (sell) trade. On the other hand,
if you see a tweezer bottom pattern, it may indicate that the price is about to go up, so
you could consider placing a long (buy) trade.

Of course, like with any trading strategy, it's important to use other indicators and do
your own research before making any trades. But that's the basic idea of how to trade a
tweezer top and bottom pattern!
CHAPTER 07 - READING THE CHART 80

FLAGS
BULL FLAGS

Flags are a type of technical analysis pattern that are commonly used by traders to
identify potential trading opportunities. They are formed when the price of an asset
consolidates in a narrow range after a strong directional move, before continuing in the
original direction.

There are two types of flags - Bull flags and Bear flags.

A Bull Flag pattern forms after a strong upward price move, followed by a period of
consolidation in a narrow range. This consolidation is usually represented by a
rectangular or parallel channel pattern, with the upper and lower trend lines forming
parallel lines. The pattern resembles a flag on a pole, hence the name "bull flag."

1 IDENTIFY THE FLAG PATTERN

Look for a strong upward price move, followed by a period of consolidation in a narrow range. This
consolidation should be represented by a rectangular or parallel channel pattern.

2 WAIT FOR THE PRICE TO BREAK OUT OF THE PATTERN

Wait for the price to break out of the pattern in the original upward direction. This breakout should be
accompanied by high trading volume.

3 ENTER CALLS
Once the breakout occurs, consider placing a long (buy) order, with a stop loss order placed below the
lower trend line of the flag pattern.
CHAPTER 07 - READING THE CHART 81

FLAGS
BEAR FLAGS

A Bear Flag pattern forms after a strong downward price move, followed by a period of
consolidation in a narrow range. This consolidation is usually represented by a
rectangular or parallel channel pattern, with the upper and lower trend lines forming
parallel lines. The pattern resembles a flag on a pole, hence the name "bear flag."

1 IDENTIFY THE FLAG PATTERN

Look for a strong downward price move, followed by a period of consolidation in a narrow range. This
consolidation should be represented by a rectangular or parallel channel pattern.

2 WAIT FOR THE PRICE TO BREAK OUT OF THE PATTERN

Wait for the price to break out of the pattern in the original downward direction. This breakout should be
accompanied by high trading volume.

3 ENTER PUTS
Once the breakout occurs, consider placing a short (sell) order, with a stop loss order placed above the
upper trend line of the flag pattern.

In both cases, it's important to use risk management techniques, such as stop loss orders,
to minimize potential losses. Additionally, it's important to use other technical analysis
indicators and do your own research before making any trades.
CHAPTER 07 - READING THE CHART 82

VWAP
VOLUME WEIGHTED AVERAGE PRICE

The VWAP is a technical indicator that helps traders understand the average price at
which an asset has been traded over a period of time, based on both price and volume.
This can help traders identify whether the current price of the asset is overvalued or
undervalued relative to its average trading price.

Here are the steps to trade using VWAP:

1 ADD THE VWAP TREND LINE TO YOUR CHART

Most trading platforms offer VWAP as an indicator. So, add VWAP indicator to your chart.

2 DETERMINE THE TREND

Identify whether the market is trending up or down.

3 IDENTIFY PRICE DEVIATION FROM VWAP

Look for price movements away from the VWAP. If the price is trading above the VWAP, it may indicate
that the asset is overvalued, and if it is trading below the VWAP, it may indicate that the asset is
undervalued.

4
LOOK FOR VOLUME CONFIRMATION
Higher trading volume will typically confirm a price move above or below VWAP.

5 MAKE A TRADE DECISION

Based on the trend, the deviation from VWAP, and the volume confirmation, decide whether to buy or sell.

For example, if the price of an asset is trading below the VWAP line and there is a higher
trading volume, it may be an indication to go long (buy). Similarly, if the price is trading
above the VWAP line and there is a higher trading volume, it may be an indication to go
short (sell).

It's important to note that VWAP is a lagging indicator and should be used in
combination with other technical indicators to make trading decisions. Also, different
securities may have different ideal timeframes for using VWAP.
CHAPTER 07 - READING THE CHART 83

MOVING AVERAGES
SIMPLE (SMA) AND EXPONENTIAL (EMA)

A Moving Average (MA) is a widely-used technical indicator that helps traders identify the
average price of an asset over a certain period of time. It smooths out short-term price
fluctuations and can help identify the trend direction of an asset.

Here are the steps to trade using Moving Averages:

1 CHOOSE A TIME FRAME

Determine the time frame you want to trade. Moving averages can be calculated over different time
frames, such as 50-day, 100-day, or 200-day. Day Trades will also often trade on a 1min or 5min chart using
the 9ema, 21ema, 34ema, and 89ema (fibonacci numbers).

2 PLOT THE MOVING AVERAGE ON YOUR CHART

Add the MA indicator to your chart. The most commonly used moving averages are simple moving average
(SMA) and exponential moving average (EMA).

3 IDENTIFY THE TREND

Determine the trend direction by observing the slope of the MA line. If the MA line is sloping upwards, it
indicates an uptrend, and if it is sloping downwards, it indicates a downtrend. If flat, it could indicate a
reversal coming.

4
LOOK FOR MA CROSSOVERS
When the price of the asset crosses above or below the MA line, it can be an indication of a trend reversal or
a continuation of the trend. This is called a crossover.

If the price crosses above the MA line, it could be an indication of a bullish signal, so you
may want to consider a long (buy) position. If the price crosses below the MA line, it could
be an indication of a bearish signal, so you may want to consider a short (sell) position.

It is important to note that MA crossovers can produce false signals, so it's important to
use additional technical indicators to confirm a trend reversal or continuation.

In addition to MA crossovers, traders can also use MA as dynamic support and resistance
levels. When the price of an asset approaches the MA line, it can act as a support or
resistance level, indicating potential buy or sell signals.

Overall, MA is a versatile technical indicator that can help traders identify trends and
potential trading opportunities. But, as with any technical indicator, it is important to use
other indicators and do your own research before making any trades.
CHAPTER 07 - READING THE CHART 84

EXAMPLES
MOVING AVERAGES

EMA CROSSOVER STRATEGY

The 9/21ema strategy on the 5min chart requires waiting
for the EMAs to cross. If the 9ema crosses above the
21ema, it is a bullish signal. Then wait for the 9ema to be
retested. If the 9ema holds as support, it is a signal to
enter longs (CALLs).

This can be played on the shortside by waiting for the

9ema to cross below the 21ema, then wait for the 9ema
to be retested as resistance before entering shorts
(PUTs).

Your stop is a close back inside or over the 9/21ema cloud.

5MIN CHART Take profits based on other key levels/targets.

9/21 EMA CROSSOVER + TREND A variation of this strategy is to use the 30ema instead of
the 21ema - The Peaky Blinders strategy.

SMA STRATEGY
The System (described many times in this guide), uses
the 10sma and 50sma on the 30min chart.

This strategy says to be Bullish when trading above the

50sma, and bearish below the 50sma.

Combining it with the 10sma, you get The System Cloud,

and you wait for the SMA crossover and play the
break/retest of the cloud.

30MIN CHART
10/50SMA CROSSOVER + TREND
CHAPTER 07 - READING THE CHART 85

BOLLINGER BANDS

Bollinger Bands are a popular technical indicator used by traders to identify potential
buying and selling opportunities in the market.

Developed by John Bollinger in the 1980s, the indicator consists of a moving average, and
two standard deviation lines plotted at a set distance above and below the moving
average.

When trading The SORBET strategy, I have been using the 50-day simple moving
average (SMA) on the 30 minute chart from The System to determine my Bollinger
Bands.

You can use it similar to how we treat the 100 point extended line on SPX using The
System where we say its time to take profits.
CHAPTER 07 - READING THE CHART 86

BOLLINGER BANDS
IDENTIFYING OVERBOUGHT / OVERSOLD
When using Bollinger Bands, it’s important to keep in mind that the market tends to stay within the
boundaries of the 1 standard deviation line and the 2 standard deviation line. This means that when price is
trading between the two lines, it’s considered to be in a “normal” state.

If price breaks through the 1 standard deviation line and trades above or below the 2 standard deviation
line, it’s considered to be in an “overbought” or “oversold” state.

TRADING THE TREND

One strategy for trading with Bollinger Bands is to look for buying opportunities when price is trading near
the lower band and selling opportunities when price is trading near the upper band. This is because, when
price is trading near the lower band, it’s considered to be oversold and may be due for a rebound. On the
other hand, when price is trading near the upper band, it’s considered to be overbought and may be due
for a pullback. When the bands are flat/sideways, chances are higher for price to bounce off the band.

Another strategy is to trade with the trend using the bands: when price is between 1 standard deviation
and 2 standard deviation, it’s considered to be trending, and we can trade in the same direction of that
trend with the help of the bands.

OUTSIDE THE BANDS

It’s also important to note that price can and often does trade outside of the Bollinger Bands. This can
happen during strong trending markets or during times of high volatility. When price breaks outside of the
bands, it’s a sign that the market is either unusually bullish or bearish.

HOW TO SET UP YOUR CHART

If using TradingView, you can add their stock Bollinger Band indicator. Set the length field to 50 to use the
50sma on a 30 minute chart. If you trade on a 5 minute chart, and want to use the same 50sma from the
30min, then you will need to set the length field to 300.

A better way to use the Bollinger Bands with The System is to use our Cash+ Indicator for SORBET. The
indicator will automatically plot the Bollinger Bands for you on your preferred time frames.

SUMMARY
Bollinger Bands are a useful tool for traders to identify potential buying and selling opportunities in the
market. By looking for buying opportunities when price is trading near the lower band and selling
opportunities when price is trading near the upper band, and also trade with the trend between the 1
standard deviation and 2 standard deviation bands, traders can improve their chances of success in the
market. Bollinger Bands should not be used in isolation, and should be combined with other signals.
CHAPTER EIGHT

CASH+ INDICATORS
The Cash+ Indicators were designed to automate the
work behind many of the strategies that Day Traders use
on a daily basis.

For me, that meant building indicators that could

simplify the trading of my favorite strategies such as The
System, ORB, EMA crossovers, etc.

As these strategies were implemented into code, it gave

me the advantage to be able to backtest them to
analytically determine their success rates.

This chapter discusses some of the indicators I have built

and are available to subscribers. Free 14 day trials are
also available to try them out at no cost, no card needed.

https://www.getthatcashmoney.com/services/

TRADING GUIDE
2023 EDITION
87
CHAPTER 06 - FOCUSED STRATEGIES 88

STRATEGY: THE SYSTEM

BY TRADER BRIAN JONES

The System Strategy is trading based on the 10 SMA and 50 SMA crossover on the higher
timeframe 30min and 60min charts.

It was created by @MasterBJones

Regardless of your trading style, The System allows you to have a higher macro outlook
in mind while you trade on your shorter 5min or 1min timeframes.

When all timeframes line up in the same direction, you end up with a very powerful trend
indicator.
CHAPTER 06 - FOCUSED STRATEGIES 89

ENTERING A TRADE
INDICATOR: THE SYSTEM TREND

1
THE BUY AND SELL SIGNAL - 10/50 SMA CrossOvers
If SPX is trading above both the 10sma and 50sma on the 30min chart, it is bullish and look for Calls.
If SPX is trading below both the 10sma and 50sma on the 30min chart, it is bearish and look for Puts.

Once the SMAs cross over, it helps solidify the trend and look to buy the retest of the 10sma.

The SMAs on the hourly chart also help with the trend to give more confluence for the trade, and the SMA's
on the hourly chart will act as support and resistance similar to the SMAs on the 30min chart.

2 THE CHOP ZONE

If price is trading between the 10SMA and 50SMA levels on the 30min chart, then this is considered a chop
zone, and trades should be avoided or sized much smaller as direction is uncertain.

3 CONVICTION
The strongest signals are when both the 30m and hourly charts are telling the same story.

4 OVER EXTENDED
Once SPX gets a 100 point move away from the 50 SMA, it is considered in over-extended territory and
expect pullbacks. While SPX may still have a LONG signal, you may consider avoiding going Long while
over extended on the long side. But consider buying the dip until the trend changes again.

5 THE REVERSAL
If we currently are in a BUY signal, but the price action breaks below the 50 SMA, then you have an
indication of the bears regaining control. This will bring the SMA’s back together and create an eventual
SELL signal. You can trade to get ahead of the official SELL signal by trading a SHORT position when we
break the 50 SMA on the 30m chart.

The opposite can be played in the inverse setup, where we may have a SELL signal, but then go LONG if we
break through and start trading above the 50 SMA.

Once we get the reversal into the 50SMA, we should start to buy/sell the pullbacks in anticipation of the
EMA crossover occurring and a new signal being announced.
CHAPTER 06 - FOCUSED STRATEGIES 90

TRIM TARGETS
INDICATOR: THE SYSTEM TREND

Once you enter a trade based on The System, it is wise to take profits as you see fit.

This could be based on key support and resistance levels on your chart.

Personally, I like to use ORB Trim targets (covered in the next few pages).

Eventually, price will want to revert to the mean, and make its way back to towards the
10sma and 50sma. When that happens, and if you still have a position open, then be sure
to exit your position on a close over the 10sma (into the chopzone).
CHAPTER 06 - FOCUSED STRATEGIES 91

GETTING THE INDICATOR

INDICATOR: THE SYSTEM TREND

1
ADD THE INDICATOR - CASH THE SYSTEM TREND INDICATOR
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash The System Trend Indicator".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings. The defaults should be sufficient, but this is how mine
are set up:
CHAPTER 06 - FOCUSED STRATEGIES 92

INDICATOR CHART
INDICATOR: THE SYSTEM TREND

1
EXAMPLE CHART
The chart will display The System Cloud based on the 30minute 10/50sma. The moving averages for the 60 minute
10/50 sma will also be shown, as those will also act as support/resistance.

You will also see the Oversold/Overbought Bollinger Bands based on the 30minute 50sma.

CANDLE COLOR WHAT IT MEANS

BLUE STRONG BULLISH: Above ORB, Above Cloud, Bullish Momentum.

AQUA MILD BULLISH: Above ORB, Above Cloud, Bearish Momentum.

ORANGE CHOP ZONE: Avoid Trades in this area.

PINK MILD BEARISH: Below ORB, Below Cloud, Bullish Momentum.

MAROON STRONG BEARISH: Below ORB, Below Cloud, Bearish Momentum.

THE SYSTEM STRATEGY

POP QUIZ
1
SPX is trading above the 30m 10sma and 50sma
a) Buy Calls
b) Buy Puts
c) No Trade

2
SPX is trading below the 30m 10sma and 50sma
a) Buy Calls
b) Buy Puts
c) No Trade

3
TSLA just crossed above the 30m 50sma
a) Buy Calls
b) Buy Puts
c) No Trade

4
TSLA is trading below the 30m 10sma and 50sma
a) Buy Calls
b) Buy Puts
c) No Trade

5
QQQ is trading between the 30m 10sma and 50sma
a) Buy Calls
b) Buy Puts
c) No Trade

1a, 2b, 3a, 4b, 5c

CHAPTER 06 - FOCUSED STRATEGIES 94

STRATEGY: THE ORB

OPENING RANGE BREAKOUT

The Opening Range Breakout (ORB)) is a commonly

used strategy where levels of support and resistance for
the day are determined from the opening period. The
direction for the day is often set at the opening bell -
whether it is an uptrend or downtrend day.

I usually use the 15 minute ORB (uses the High and Low
from the first 15 minutes of the regular session 930am -
945am ET), but there are others who have successfully
traded with a 5 minute ORB or even a 30 minute ORB
strategy.

What we have found is that the price of a security will

tend to retest and bounce and breakout from these
opening highs and lows. You can take advantage of that
price action by setting those levels on your charting
software and triggering Calls or Puts when those levels
cross with volume or are retested.

Whats more, the Fibonacci Extension levels from the

ORB range also tend to attract the price and become S/R
levels themselves. This gives you a good Profit Target
area to guide when you should exit an options contract.
CHAPTER 06 - FOCUSED STRATEGIES 95

ENTERING A TRADE
INDICATOR: THE ORB LEVELS

To trade the Opening Range Breakout strategy, you want to allow the market to settle
down for the first 15 minutes. You will often get a lot of volatility at the open, so this allows
you to sit out the craziness of the opening bell and let the direction work itself out. Once
the first 15 minutes are up, game on.

You can trade the ORB strategy on any timeframe, but I recommend the 5 minute chart.
The 5 min helps avoid the fake-outs in my opinion. Whichever timeframe you choose,
you want to make sure your confirmation is a candle close over the ORB level and then
enter on the retest of the ORB level, or if the next candle holds the ORB level.

1
BREAK WITH VOLUME
Look for a break of the opening range level (lets say the high of the opening range in this example). You
want the level to break with significant relative volume, supported with the price action of the underlying
stock. If you have a strong break of the level, you can enter a CALL position at this time. This can be
considered riskier as if the volume doesnt continue, the price could move against you. If you do enter on a
break with volume, you want to ensure you have a suitable Stop Loss in place - usually just below the ORB
High level - so you can minimize losses if it moves against you.

2
BREAK HOOK AND GO
A safer approach is to wait for a retest after the initial breakout, and confirmation of a bounce (aka Break
Hook and Go). After the initial break, often the stock will retrace to the ORB High level (in the case of bullish
direction). You can enter on the retest and hold of that ORB High level, with a Stop Loss just below the ORB
High.

This approach allows you to stop out with minimal losses if the ORB High level does not hold. We have
often seen retests like these propel a stock to new daily highs.

If the neckline for the retest was pretty close to the ORB level, then you can be safer more by waiting for
that neckline to break.

In both of these scenarios, it is critical to ensure the volume is telling the story. If there is a
lack of volume to push the stock higher, then its likely to not carry to new highs.
CHAPTER 06 - FOCUSED STRATEGIES 96

TRIM TARGETS
INDICATOR: THE ORB LEVELS

The ORB indicator for Trading View will give you price targets based on the fibonacci
extensions from the opening range.

Price tends to gravitate to these levels and so are good profit target areas to start
trimming your position.

Typically, after an ORB level break, I will take my first trim (trimming 50% to 75% of my
position at the 61.8% ORB Fib Target. Then I will take another trim at the 100% ORB Fib
Target.

At this point I am usually out of most of my position within maybe 1 - 2 runners left.

If it is a strong trend day, usually you will get some sort of pullback where price bounces
between these ORB Fib Levels, as well as pulling back to the 9ema (5 minute chart).

It is always smart to take profits early, and if the trend continues then you can always
reenter with profits.
CHAPTER 06 - FOCUSED STRATEGIES 97

TIPS AND TRICKS

INDICATOR: THE ORB LEVELS

1
The 9ema on the 5 minute chart
I will usually overlay the 9ema (on the 5m chart) and VWAP alongside the ORB indicator. The 9ema is great
to use as support when in CALLs and as resistance when in PUTs. If getting into CALLs and price is below
the 9ema (5m chart), then its a no entry sign. Likewise VWAP should also support your trade as another
level of support/resistance.

A really powerful combination is when the break of the ORB level coincides with the 9ema on the 5min
chart. That provides an A+ setup with multiple factors setting up a higher conviction trade.

2
Trading the trend with the 200sma
The 200 sma provides a good direction of long term trend. If the ticker is trading above the 200sma, then
look to take longs, ideally from a break of ORB High. Likewise, if trading below the 200sma, then look to
take shorts from a break of ORB Low.

3
ORB Fibonacci Levels aren't just Targets
Usually with ORB High you are looking for calls, and breaks of ORB Low you are looking for puts. But you
can also take a short position from a rejection of ORB High, or go long from a bounce/retest of ORB Low.

Likewise, if we have a strong trending day, then the ORB fibonacci levels also act as support and resistance
and can be used as levels to enter a position once it starts acting as support.
CHAPTER 06 - FOCUSED STRATEGIES 98

GETTING THE INDICATOR

INDICATOR: THE ORB LEVELS

1
ADD THE INDICATOR - CASH ORB LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash The ORB Levels".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings (It will show as Cash SORBET as the same indicator now
also handles the SORBET strategy). The defaults should be sufficient, but this is how mine are set up when trading
just ORB:
CHAPTER 06 - FOCUSED STRATEGIES 99

INDICATOR CHART
INDICATOR: THE ORB LEVELS

1
EXAMPLE CHART
The ORB indicator will automatically plot the ORB range for the day once set. You also have the option to set Price
Targets based on Fibonacci (as seen below), or standard 50% ranges. I prefer the Fib targets personally as they
seem to be respected more often.

To trade this, look for a Break, or Retest of the ORB High or ORB Low levels, then enter in the direction of that
move (eg Calls on Break/Retest of ORB High). As you get the move, use the ORB fibonacci levels as your trim
targets.
CHAPTER 08 - CASH+ INDICATORS 100

KEY LEVELS

PRIOR DAY HIGH

PRE MARKET HIGH

PRIOR DAY LOW

If you are a Day Trader, it is important you are familiar with certain Key Levels that come in to play each day.

At minimum, you need to be aware of the following Key Levels:

Yesterday High
Yesterday Low
Yesterday Close
Premarket High
Premarket Low

Other Key Levels that are useful are the Opening Range (ORB) High and Low as they define if we will chop all day
or set a direction.

Finally, if you have a watchlist with levels, you will want to mark those levels on your charts.
CHAPTER 06 - FOCUSED STRATEGIES 101

GETTING THE INDICATOR

INDICATOR: THE CASH LEVELS

1
ADD THE INDICATOR - CASH KEY LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash Levels".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings. The defaults should be sufficient.
CHAPTER 06 - FOCUSED STRATEGIES 102

INDICATOR CHART
INDICATOR: THE CASH LEVELS

1
EXAMPLE CHART
The Cash Levels indicator will automatically draw the various selected levels on your chart. These levels act as key
support/resistance levels, so is useful when determining entries and exits based on your strategies.

I will often use this in combination with my SORBET strategy, and others.

In this example, you can see how PreMarket High acted as resistance multiple times, before SPY was able to break
through. Yesterday's Close can be used as a Gap Fill level as in this case a gap up was created at open.
CHAPTER 08 - CASH+ INDICATORS 103

THE GOLDEN POCKET

The Golden Pocket is the area between the 61.8% and 65% Fibonacci Retracement.
I highly recommend learning about Fibonacci Numbers.

One of the things you will learn is the 0.618 is known as the “Golden Ratio”. Thus, we call
this trading strategy the “Golden Pocket” as we are looking for a retrace to the 0.618 level.

The Cash+ Golden Pocket Indicator will automatically plot the Golden Pocket on your
chart, starting at 10am ET. It will automatically calculate the 0.618 - 0.65 area based on the
current days high and low, as well as the wider 0.5 area, and display them on the chart.

The strategy can also help alert high probability entries based on retests of the Golden
Pocket.
CHAPTER 08 - CASH+ INDICATORS 104

ENTERING A TRADE
INDICATOR: THE GOLDEN POCKET
As with all things trading, nothing is ever always exact, thus you add positions using this strategy is in that 0.618 -
0.65 pocket, with a stop over the 0.65 level. This allows us to enter a trade with defined risk with great risk to reward
ratio. You know exactly where to stop out, and it will usually be very close to your entry.

1 WAIT 30 MINUTES
Let the market settle down for the first 15-30 minutes so that a trend can develop. The Cash+ Golden
Pocket Indicator will start plotting the Golden Pocket on the chart after 10am.

2 WAIT FOR A PULLBACK

Once we have a move in one direction, price action will eventually pullback. This is where you need to be
patient and wait for a retrace to the 0.618 Golden Pocket level. At this point you are looking to buy a
position at a discount while the trend stays in tact.

3 WAIT FOR THE GOLDEN POCKET RETEST

Once we retest the 0.618 level, you can now enter a LONG or SHORT position based on the direction of the
bounce. You should place a stop loss just below the 0.65 level. You may choose to add to your position
between the 0.618 and 0.65 levels as we may wick in that range. A close over 0.65 should signal you to stop
out of your trade.

4 MANAGING THE TRADE

As the chart moves in your favor after the retest, you can take profits as you see fit, look for trims at
HOD/LOD, or simply continue to move your stops to ensure profits. But don’t let a green trade go red! After
an initial move down, its always wise to move your stop to break even.

The strongest moves have happened when we close back over the 50% retracement line on the next
candle after we retest the 0.618 level.

If we end up closing inside the Golden Zone (between the 0.5 and 0.618 region), then its a sign of
momentum dying and the trade loses its strength.

5 TRENDING DAYS
On a trending day, you want to stay in the trade as long as possible, and let the market take you out via
stops placed just above key levels once crossed. You should trim all remaining positions if we retrace back
over the 0.5 level as at that point the strategy is invalidated.
CHAPTER 06 - FOCUSED STRATEGIES 105

GETTING THE INDICATOR

INDICATOR: THE GOLDEN POCKET

1
ADD THE INDICATOR - CASH KEY LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash Golden Pocket".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings. The defaults should be sufficient.
CHAPTER 06 - FOCUSED STRATEGIES 106

INDICATOR CHART
INDICATOR: THE GOLDEN POCKET

1
EXAMPLE CHART
The Cash Golden Pocket indicator will automatically draw the Golden Pocket range for you. On a successful retest
of the Golden Pocket, it will alert you of a potential entry.
THE GOLDEN POCKET
CHAPTER 08 - CASH+ INDICATORS 108

THE PEAKY BLINDERS

BY @MOE_MAMBA_

The Peaky Blinders Strategy is waiting for the 9/30 EMA crossover (5m Regular Hours
Chart).

Once the 9EMA and 30EMA cross, wait for the Break Hook and Go off the 30 EMA.

The Cash+ Peaky Blinders Indicator will automatically plot the 9EMA and 30EMA on your
chart.

It will automatically label when an EMA crossover happens, and alert you on the chart
when we get a successful retest of the 30 EMA with a recommendation of going long or
short off that level.

The Cash+ Peaky Blinders indicator will also recommend a Stop Loss level just under the
30EMA to encourage you to minimize losing trades, while riding the winners.

No strategy will win 100% of the time, but this strategy provides a low risk high reward
scenario.
CHAPTER 06 - FOCUSED STRATEGIES 109

GETTING THE INDICATOR

INDICATOR: THE PEAKY BLINDERS

1
ADD THE INDICATOR - CASH KEY LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash Peaky Blinders".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings. The defaults should be sufficient.
CHAPTER 06 - FOCUSED STRATEGIES 110

INDICATOR CHART
INDICATOR: THE PEAKY BLINDERS

1
EXAMPLE CHART
The chart will plot the 9ema and 30ema (from the 5 minute timeframe) onto any time frame. It waits for the EMA
crossover to occur, and then on the first successful retest and hold of the 30ema, it will alert an entry (break hook
and go of the 30ema).
CHAPTER 08 - CASH+ INDICATORS 111

DAILY FIB PIVOTS

The Daily Fib Pivots indicator can be used to display the Fibonacci Retracements and
Expansions based on the previous days high and low.

If you want to learn more about Fibonacci Retracement Levels, Investopedia is an

excellent source of information.

In a nutshell, Fibonacci retracement levels are ratio’s between a high and low value,
based on Fibonacci percentages.

The major Fibonacci levels that we often see price respect are the 23.6%, 38.2%, 61.8%, and
78.6% ratios.

The 50% ratio is also very popular (although not officially a fib ratio).
CHAPTER 08 - CASH+ INDICATORS 112

DAILY FIB PIVOTS

INDICATOR: THE DAILY FIB PIVOTS

With the Cash+ Daily Pivots TradingView Indicator, we will automatically plot the Daily Fib Levels using the
previous days high and low values.

For each date, the gray lines represent the prior day high and low values. The lines in between are the Fib
Retracement levels (each color is labeled on the right), and the lines that go above/below the gray high/lows are
called the Fibonacci Extensions.

HOW TO READ THE DAILY FIB PIVOTS CHART

These daily Fibonacci levels have an uncanny way of becoming areas to watch for support and resistance and
allows your to better time your entries and exits as we approach these levels.

Price will often bounce around at these Daily Fib Levels, so each line can be used as support and resistance to help
you trim your positions as these levels approach, or enter a trade if you get a bounce at one of these levels (ideally
with other ideas to make this an A+ setup - eg the 9ema or 21ema).
CHAPTER 06 - FOCUSED STRATEGIES 113

GETTING THE INDICATOR

INDICATOR: THE DAILY FIB PIVOTS

1
ADD THE INDICATOR - CASH KEY LEVELS
Click on "Indicators" in the top toolbar, go to "Invite-Only Scripts", and select "Cash Daily Pivots".

2
CONFIGURE SETTINGS
Click on the cog for the indicator to configure its settings. The defaults should be sufficient.
CHAPTER 08 - CASH+ INDICATORS 114

ENTERING A TRADE
INDICATOR: THE DAILY FIB PIVOTS

HOW TO TRADE THE DAILY FIBONACCI PIVOTS

Now that we know how these daily fibonacci levels play out during the day, we want to trade them.

The simplist way to trade with our Daily Fib Pivot indicator is to treat the Daily Fibonacci Levels as key levels of
support and resistance, and trade them with the Break Hook and Go technique.

Wait for a level to hold or break/retest, and that provides your risk on/off level.

If the chart is bearish and you are looking to take a Short Position, then enter on the retest from below of the
level, and place a stop just above it.
If the chart is bullish, and you are looking to open a Long Position and you can see more potential upside, then
wait for the level to break, and enter on a retest with your stop just below the level.

Never enter a trade for just one reason alone. I usually go for a minimum of three areas of confluence to increase
chances of success.

So in the above example, you have the following reason to enter:

Reason 1: Break Hook and Go off a key Daily Fib Level.

Reason 2: A Bullish/Bearish trend (EMAs or Higher Highs and Higher Lows) in the direction of your trade.
Reason 3: To add more conviction to a trade, having an EMA retest along with the Daily Fib Level would make
this an A+ setup. If this is the 21EMA, it would be similar to a Golden Goose Strategy. If the retest is with the
30EMA, then it would be similar to a Peaky Blinders Strategy

Once you have entered the trade (and assuming you havent stopped out already), you can start to move your
stops up as we approach the next key fib levels. You can either trim your position as we hit those levels, or keep a
tight stop near it in case we find major resistance there.
DAILY FIB PIVOTS
CHAPTER NINE

OPTIONS FLOW
As a trader, you’re always looking for an edge that can help you make profitable trades.

One way to gain an edge is to track the flow of options – the buying and selling activity of options contracts by
different market participants.

By understanding who is buying and selling options, and why, you can uncover hidden opportunities and make
better-informed trading decisions.

As a trader, you’re always looking for an edge that can help you make profitable trades.

1
One way to gain an edge is to track the flow of options – the buying and selling activity of options
contracts by different market participants.

By understanding who is buying and selling options, and why, you can uncover hidden opportunities
and make better-informed trading decisions.

Another advantage of options flow trading is that it can help you identify potential trading opportunities

2
that may not be apparent from looking at the underlying stock or asset.

For example, if you see a large volume of options contracts being bought at a specific strike price, it
could indicate that there is underlying demand for the stock or asset at that level.

This could be a potential entry or exit point for your trade, depending on your own analysis and market
conditions.

Overall, options flow trading can provide valuable insights into the sentiment and positioning of different market
participants, and help you identify potential trading opportunities that may not be apparent from looking at the
underlying stock or asset.

By incorporating options flow data into your trading strategy, you can gain an edge and make more profitable
trades.

TRADING GUIDE
2023 EDITION
116
CHAPTER 09 - OPTIONS FLOW 117

BLACK BOX STOCKS

OPTIONS FLOW 20% OFF CODE

BlackBoxStocks provides traders with real-

time options flow data.

The platform offers a variety of data points

such as volume, open interest, and implied
volatility.

BlackBoxStocks also provides a heat map

which highlights unusual activity, as well as
the ability to create custom alerts.

Additionally, the platform provides a suite of

tools to help traders analyze and manage
their options trades with cutting edge
charting tools.

BlackBoxStocks is designed to provide

traders with an edge by helping them
identify profitable opportunities in the
options market.

Personally, I am a BIG fan of Black Box Stocks. Not only do you get the great Options
Flow from them, but they have an insanely great team of traders to guide you
throughout the day on live voice and discord, and point out interesting flow.

They frequently give out trade alerts worth following, as well as teach you how to trade
(both Options Flow Trading as well as Technical Analysis).

I have been a member of BlackBoxStocks for a few years now and has been worth every
penny.

You can sign up for the BlackBoxStocks flow service with my affiliate link:

http://staygreen.blackboxstocks.com/SHJG
CHAPTER 09 - OPTIONS FLOW 118

TIME FRAME
Either Short Time Frame, or Continuously Pounded All Day Long

SAME STRIKE + EXPIRATION

With Large Size, Ideally in the Millions!

CONTRACT PRICE INCREASING

ASK OR ABOVE-ASK
SWEEPS
No Solo Blocks!

Options Flow without all of these boxes checked can still work out.

But the higher probability trades will have all or most of them checked.

Use the flow as one piece of the puzzle. Always confirm it with the chart and make sure you have a
plan for stop losses and targets.

OPTIONS FLOW CHECKLIST * Checklist inspired from the BlackBoxStocks team

HAPPY TRADING