A trader explains how to use price action signals to trade options: buy calls on bounces when price is near the upper range at open, buy puts on rejections in downtrends. The key is targeting the largest move within whatever trend is happening, whether up or down.
Bounce is for the calls, rejection is for the puts. Price opening quite close to the upper side. Price is coming here on the pre-market opening. If I'm looking for the puts, if we are in the downtrend, picture is looking like this. Here potentially price can make the lower high at the level, and that is the place where I look for the price to get to the level, get rejected, create another leg for the lower low. It doesn't matter if that's the uptrend or downtrend. You want to primarily look for this move, the biggest move in the trend. On the uptrend is going for long. There are still going short at some point, but that's risk Thank you.
