We dive into our latest option trade in NFLX and show you how to safely cheat and trade inside the standard deviations. Using Elliott Wave and Fibonacci we show you how to collect more credit, improve your risk / reward ratio, but still maintain a high degree of probability.
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Again another example of the power of Elliott Wave and Fibonacci.
I always review the 1 STD in TOS option chains to get a feel.
I always used the Greeks and the Probabilities of(Touching, ITM, OTM)
I look for 80% Prob. of OTM when I sell options.
Using the power of Elliott Wave and Fibonacci I can now fine tune and get more premium with a greater level of confidence. Thank You for the additional info. I am currently reading and studying Elliott Wave and Fibonacci books and videos. You use Motive Wave software. Is there a less expensive competitor that has the same functionality? Or is Motive Wave the Best and just by it?
Hi John,
Great summation and perfect understanding of the concepts I’m trying to convey. I think it’s great to understand where the standard deviations lie and combine them with Fib and Elliott Wave. As an aside, I think we all know that normal distribution is a flawed market measure as a stock can’t go below zero. So a log normal distribution is more accurate, though not used because it’s too difficult for many to grasp. If you’re a trying to be a big wave surfer, then you head to MotiveWave – DETAILS HERE. eSignal’s Advanced Get is good too if you’re just starting out and want the heavy lifting done for you.
Hi Tod,
You have to incorporate time analysis to get good projections. Time is more important than price, especially when dealing with time sensitive instrument like options, when time is “right” – price will be there.
I 100% agree that time is important, however there is only so much I can cover in a 3-minute video. When it comes down to weighing significance of time vs price measurements, price is always more important. When it comes to selecting expiration and strikes, they are equally important and we do time measurements to select the ideal expirations. Watch for that in coming videos.