There is something I want 2 share, its still in experimental basis so by posting this post I am hoping to read the other side of the coin, pros n cons of my experiments so plz be free to express ur opinion friends..
First its regarding option trading using pivot points and saints flow method ( strictly positional so only hourly bars no aggressive/pure stuff here) . what I am doing is writing call when sell signal triggered and at day closing I buy call of near SAR, same with puts when buy signal triggers, operative word here is buy call at DAY CLOSING TO NEGOTIATE GAP UP AGAINST WRITTEN CALL MOVES. Ex. Suppose on hourly there is pvt crack say 3100 then we write 3100 call now say market behave as per our likings n at day closing,here comes the imp part we dnt open our naked write position to the mercy of gap ups so we buy 3200 call considering we have SAR at 3160 ( including filter) if market opens in favor of our short position we kept open our 3200 call buying position as it is till new sar established …well its very simple technique but putting it in words sounds bit complicated, as is the irony with all option strategies….
Objective – only objective is fixing the risk and so fixing the profits, so its not exactly flow method as saint sir uses flow method for capturing big trades, here we let it go big moves when move is in line next day …but.. now consider at first day we write 3100call n we brought 3200 call n next day market open gaps up but within our sar then? We sell our long call in profit n wait for market to hit our sar. If sar hit we write put as long triggered but if sar didn’t trigger we kept open our written call position … in free time I will post my charts n trades of 2 months to clear it more, I use to trade options using inbuilt indicator PARABOLIC SAR this is bit evolution and logical version of previous, meanwhile excuse me for bit confusing post
Regards Alex.
P.S. To cut the chase down when we deal with option writing, math says LIMITED PROFIT AND UNLIMITED LOSS, afterwards everything is ur choice.