SPX ZERO DTE Options: From 1000 Failed Trades to 5/5 Winners Using This Algorithm - Real Results

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Yeah, good morning everyone, this is your host Qamar Zaman from the studios of Coffee with Q. Before we introduce my good friend John Kaplan, who is our guest and a member of a new product that we have developed I want to tell you something about Coffee with Q. Coffee with Q is a podcast show where we interview subject matter experts from different fields. I've done subject matter experts from marketing to subject matter experts in law. And just recently, about 6 months ago, uh, for my passion, I started to do stock market trading, day trading, and I was in one of the rooms where I met John. I think John and I had pretty much— we were in the same batch, I would call it, and we kind of discussed. And I would be announcing my entries at that time, what I was doing, and John was using the system that he was using at that point. We had an alignment of interest, and then while I was building the algorithm, what we call the QAlgo. So I'll talk about that in the discussion. So I want you guys to know that I have John Kaplan. John is from California or from New York, and now he lives in California. Who knows where he lives? He's all over. Welcome, John, to Coffee with Q Podcast.

Hey, Kumar, thank you. Thanks for having me. And, uh, Looking forward to this conversation.

Thank you, John. So John, before we talk about our common interest, which is intraday trading, tell us a little bit about you, John, so the audience can get to know you and where— why you do what you do and why you do this now, especially the trading.

Yeah, I have a lot to share about my journey as it it pertains to the last, oh gosh, 6, 7 years of learning about how to trade. But prior to that, my— most of my life was in different types of entrepreneurial businesses, uh, but the emphasis was always sales and marketing. And so I've been super successful in sales, um, and, uh, there's so, so many stories to tell. I actually, at one point Didn't expect to stay there, but I moved to Thailand and ended up living there for 8 years. And I sold commercial real estate in Bangkok and spoke fluent Thai. I mean, my story would fill up a whole podcast. So I'm gonna skip my life story because there's too much detail. But I am—

We have some commonality because I lived in Hong Kong and I used to go to Thailand.

Hong Kong. All right on. Yeah, I actually worked for a Hong Kong-based real estate company in Bangkok, Thailand. So I And right now in the Hamptons, where my parents live. They grew up in New York City. They still have a place in the city, but they moved out here and they stay here now. And I visit very frequently. And I live in the Silicon Valley area, Mountain View, California, middle of Silicon Valley in California. So with that said, let's jump into the trading part of my life story.

Great. So you just segued into trading and you said that you have been trading for 5 to 7 years? That's right.

And got into it in 2017 and then, um, was just holding, buy and hold, buy and hold. I'm still holding today. Um, but about a year or 2 later, I got kind of hung because I'd seen the gains, you know, and I got hungry to learn how to do something. And options came across my line of sight and I was shown how you could buy calls and puts and make money, you know, make crazy gains. All right, let's put it that way. So I embarked on many, many years of learning. I joined many different rooms, had many different mentors, paid a lot of different educational fees, took a lot of courses. And, you know, more or less you get into a room, you, you take, you buy the course, you get into the room, you follow the trades, and you learn by, by doing. And, um, I'll cover really quickly a couple of the key, uh, uh, uh, mentors I had. One, the first guy, I'm not going to name anybody or mention any other Companies' names, but he used to tell every morning he'd tell a couple of really funny dad jokes. So I'll call him the dad joke guy. But one of the many things he was doing was trying to do quick scalps on SPY, SPY in the morning. And his thing was his claim to fame was like, look, if I can get up every morning and take one trade and make 10% of my money. I'm doing great. And I thought, that sounds pretty damn good to me. Uh, problem was just wasn't consistent. Uh, didn't really, you know, you'd have a bunch of wins and then all of a sudden you just couldn't win no matter what you did, right? And, and so I didn't, didn't really feel like I had a handle on it, but that was probably my first taste of what it was that I was really dreaming of being able to do. I joined a group, uh, or a room, and I will say the guy's name was Larry, and spent about a year learning everything about options trading. It was like a school almost. I took notebooks and I filled notebooks with all my notes. Iron condors, diagonals, calendars, put credit spreads. And then that morphed into one of his favorite trades was an earnings trade where you put on these 2 calendar structures the night before the earnings announcement. And then as long as it stayed, you know, it didn't go up too much or down too much, you were guaranteed to walk away with a profit the next day. And I actually took what he taught me and morphed it into something called a double diagonal, a double long diagonal. There's 2 types. There's long and short. But a double long diagonal is, if you look at the chart of it, the wings go very high on the right and the left. So if, if, if that stock, you know, makes their earnings announcement, let's say, and the price goes flying up or flying down, you're guaranteed to make money. No matter what happens, you walk away with a profit. The only place you'd lose is in the middle.

Yeah.

There was something called Volatility Crush, and this was a play on volatility. And so if the price only moved like 1% up or down, you'd get crushed and you'd take a loss. And I thought this was the most brilliant thing I'd ever come up with. In fact, I thought this is all I'm ever going to do the rest of my life. And I got really, really good at it. And, um, There was one week in the first month or two I was doing this, I had— I took— put on 14 different earnings trades. It was fun, you know, the night before the announcement you put the trade on and the next morning you wake up and you had money. Uh, 14 out of 15 trades won in that week. So again, you know, this is sort of, um, a great, uh, example of what I've been through in my journey. So I thought, okay, I found it, the secret to success. Yeah, and I became obsessed, and I put on over 1,000 earning trades over the next year and documented every one of them with screenshots before and after. And I really tried to create a like a science, like a math for how exactly to design this structure. Problem was when I started doing it, for whatever reason, the nature of the market and that particular earning season was such that. Every stock, when they made their announcement, made a wild move—8%, 10%, 20%. One or two earning seasons later, for whatever reason, I think the market was bored. There was no volatility. There was no volume. Nobody was doing anything, and whatever the announcement was, nobody cared. Nobody was paying any attention, and every single stock would move 3% up or 4% down or 1% up or 2% down, and I got crushed, crushed, crushed. Then I redesigned my structure so that you made money in the middle. You only lost if it went too far outside of bounds. And that worked for a little while, and then that didn't work. And after 1,000 trades, I measured it, and I was breaking even regularly, week after week, month after month, breaking even on those trades. I was having winners and losers. So I said, I'm done with this, right? And I elaborated on that story only because I think it's a perfect example of the next 6 things I did. I got into something called range-bound trading and followed a really great mentor. Where you'd put on these $20,000, $30,000 structures that were like these huge— they operate kind of like an iron condor or a calendar, double calendar, triple calendar. As long as the market didn't move too far, you were basically making money on the time decay. You were essentially selling options and waiting for time to pass, and it was guaranteed money.

Yeah.

As long as the market didn't suddenly go flying way outside your structure. Which it would always do, right? And so that I got tired of that. Then I got into futures, and I shared with you, Kumar. I did a thousand hours of back testing in 2022 into 2023 for about five months. I sat until my back was killing me, days, nights, weekends, coming up with a way using an algo I had purchased, and I was using it on TradingView to. Put it on, put on a trade on the— I was using NASDAQ futures at the time, and with a, with, with a, a stop and, and a profit target based on some signals, based on signals. And I thought I had the perfect formula, and I grew an account about 15x. I started with fairly small money. It was up 15x, and I started to size up. And the, the, the whole system I built started to not work as well. You know, went from like a 60% win rate, and I was doing 1.5 to 1. So, you know, if you risked $1,000, you'd make $1,500. You, you either lose $1,000 or make $1,500.

Yeah.

So that 60% win rate with that kind of a risk to reward, that's fabulous. But started to go down to 52%, then 50%, then 48%. You'd still be okay. But then it started to go even lower, and I was again breaking even. And I said, all right, I'm going to stop this and walked away from that. And then even earlier this year, the beginning of the year, I got into trading the opening range break. You watched— in this case, we were watching— this was another room I joined— watching the 15-minute candle on the SPX. And wherever it closed, you draw a high and a low. And then you'd— the clever— what this woman in the room, she had figured out was that the first opening break Oftentimes was unreliable, but the second break, which didn't happen every day, but like today I think we had one. You break low, break the bottom, then you break the top. That was the trade to take, the second opening range break. And we did it with a put credit spread, which is way out of the money. And you were just hoping that it didn't come back and touch your spread and you just walk away with the credit, the credit that you'd sold it for. So we did that, but the risk to reward was terrible. The risk reward was absolutely terrible. So on a bad day, you'd give up, you know, four or five days of what you gained, basically. So long story short, I joined a room. This is where I met Kumar, and we were trading SPX options and zero-day expiration. And I have to tell a funny backstory. This is a really good story here on that. So when I first started with the dad joke guy doing these S PY options. This was really kind of my passion. How could you get into an option in a call or a put and 10 minutes later walk away with 10% or more? Yeah, and just be done for the day. And in 2022, the CBOE went to a 5-day expiration model for a couple of underlines, the S&P, the NASDAQ, and a few others. So you could trade zero-day 5 days a week. And I was so excited about this as every other trader was. Like, this was it, man. This is going to be it. We're going to learn how to trade zero-day. We can do it 5 days a week as long as you have a formula for doing it. Which, by the way, I didn't mention, but the opening range break was a spread on a zero-day SPX options. And you're just waiting for the time decay in that case. So there's money to be made with this instrument. But I just hadn't cracked it yet. But I was so enthusiastic and there was such a buzz when that happened that I paid for with DMV to change my license plate, which today it still reads S&P Zero DTE. That's my car license. I should send you, Qamar, I should send you a photo of that.

Yeah.

I couldn't get the and, so it's SP Zero DTE. But the ironic and almost depressing fact is that after about 4 or 5 months of trying different things, that's in 2022 when this happened, I really didn't have anything that was reliable. And so I've been driving a car all these years until I got in that room a few months ago where we met, where we, you know, was learning a lot about how to trade zero-day expiration S&P SPX options specifically. I've been looking and hoping and praying to find a system that was reliable because you have to get the direction right. That's the whole key here. If you can get the direction right, you can make a fortune. And so, you know, I believe in law of attraction, and that's another topic for another podcast. But I believe that I was putting out into the universe a vibrational signal with my license plate.

Yeah.

And it came back around. So that's a quick run through my trading story.

Amazing. So the next question is related to— you went through a lot. I mean, I've not talked to somebody that has gone through so many, you know, uh, process, and then you are learning and those are working and then they are not working. Uh, so it's kind of like pie in the sky. So when we met, you know, the structure that we were trading, um, You had already known about indicators, etc. So what was the, you know, the biggest challenge that you were facing at that time? You know, because obviously things are working, the win rates were pretty high, you know. So what was the challenge?

Well, the challenge, and it still is a challenge for me as of today, Is the concept of a stop loss. Because if you have— the funny thing is, if you get in one of our trades, and we'll talk more about how these trades work, but you're— I, I like to call it long or short. Long is a call, short's a put. But you're basically placing a bet that it's going to move up, and the next candle or 2 could go against you.

Yeah.

And if you panic, as can happen— I sometimes do— I'll just exit that trade. I'll bail. I'll bail on the trade, and then by the fifth, five, fifth minute, sixth minute, turns around, goes in my direction. On the other hand, if it keeps going against me enough and I don't bail, I could take such a sizable loss that it would wipe out many, many, many, many, many positive trades.

So I'll stop you there.

So yeah, please. I'd love to hear your thoughts.

Right. And this is I think we discussed that yesterday. When you enter a trade, you're entering on a pullback, I'm assuming, or are you entering on not a pullback?

I want— you know, this is a topic I'll have to talk to you about another time, but I really want to develop a better ability to get in on that pullback and less so chasing the breakout. Because when you see that breakout and it goes, goes, goes, goes, goes, and you finally click the mouse and get in You're a little late now.

Yeah, right. So that's what was happening. So to solve— answer one of your problems, the room, uh, people were entering on the breakout most of the time, 99% of the time. And that I also did. We got lucky. And, and exactly when that did happen, I, instead of taking a big dump, I just came out really fast like you said, you know. And then you have to wait for the 5 candles before the change happens, right? And so what happens is psychology kicks in. So you got on an option, you paid, let's say, $15, and then within the 5 candles, it went to $8. Okay. And I've seen that, right? And at that point, you're too far. So you can either close at that point or wait I've already lost half of my money, I'm going to wait for the win. And if that doesn't happen, that becomes a dog, you know?

Yes.

And somebody doesn't like dogs, right? So exactly. So when I found that problem, that's when around March I knew that this was emotional trading and there was no science behind it. So I, I started to write code because that's what my background is. Started to write a basic amount of code on TradingView or Thinkorswim actually. And then I would learn and take entries on, you know, retraces and all. And I found the magic entry, you know, and that magic, magic entry always like while the room was getting it at $11, I waited, I got it at $9 and boom. From 9 to 11, I took it. Okay. That's when my whole process of the mission to get in got in. So go ahead. I'll let you talk.

No, perfect. Perfect. I thought that was really useful. And that's actually— we knew we were in the room together, folks. You know, it's a Zoom call. So we're chatting on the right-hand margin and, you know, folks are saying, hey, I'm having a great day. I'm having a— I had a couple of wins. But I always noticed Kamar pretty much winning every day. You know, just win, win, win, even on days where we had a couple of those dogs. Yeah. And so there was a curiosity there. And needless to say, you've just told us what was going on behind the scenes. You had used your coding background and your intelligence to develop a system to mitigate or prevent those sorts of losses and give you better entries. And I became extremely interested to, to be a part of this. That's how that happened. Yeah.

And subsequently, that became the Q Algo. But I want to ask you this question related to this. So you had already been familiar with algos. You have used TradingView. You have used a lot of paid or free algos, indicators, et cetera. Why were they not working?

Yes, actually, that's a good segue into talking about your algo and the differentiators because I mentioned to you the other day, the one that I had built for the NQ futures with that other algo that I—

The Q Junior, the Q Junior, you called it.

Yeah, it gave me a precise entry. When that candle closed and it said buy, as soon as the candle closed, bam, I got in the trade that second. And vice versa, you know, with sell, I'd go short on the futures. And I kept doing adjustments to the sensitivity settings of the buy-sell signals because if you have small waves, you want to catch the bottom of the little wave. Because if you get in too late, you'd be at the top of the wave. You'd be getting in at the wrong time. You'd be going long at the top, right? And it'd come down. So you had to adjust the sensitivity, which meant where on the wave it would give you a buy or a sell signal. What I noticed with your system is it's a confluence. Let's say there's 10 things you can look at. And at any given time, I might be looking and waiting for 4 or 5 or 6 of them to confirm, and it's— that's the moment to get in. And on another trade, it might be a different 4 or 5 or 6 that are confirming. It's not the— it's not an exact formula. I think anybody looking for— see, I felt like that was the lazy man's approach. What I was trying to build was something that would literally, just like a robot, tell me go long now, go short now, and then like a dummy, I could sit there all day long and just make money. But trading is never going to be that simple. Never going to be that easy. You're going to have to develop an eye, a trained eye to watch for these confluences and to see, okay, I'm feeling, let's say puts, right? I'm feeling where it's starting to go roll over. Oh, wow. The market's starting to move down. Oh, this, this number 1, number 2, 3, 4, 5. Oh, I got number 5, number 6, number 7. I'm in. I'm in. You see, if you wait for all 9 or 10, you might be late, actually. By the time all 9 or 10 of those indicators are screaming to go short, It might be the end of a very big down move, right? So it's developing a kind of a keen eye and a sense of how to read the patterns. There's 3 panels, the top, middle, and the bottom, and you're watching all of them. And, and I feel brand new to this because it's been 6 days of using it and recording my results. But, uh, that's— that, that, that's— did I answer your question?

Yeah, you did. And before I go to the next question, I'll tell you A little bit of the reasoning. So when I started trading, I was very new to trading. I had a mentor called G. G, the first class that we did, he installed for me. I didn't even know how to trade, uh, trade Thinkorswim. So he said, okay, this is— before that, we went to a template. He installed 6 charts for me and he put SPY on all of them. And he said, this is 5, 4, 3, And then he put 7 indicators, TTM Squeeze, RSI, MACD, VWAP. And I said, and then he says, okay, this is the manual on go and read the candles. And I was like, oh my God. I said, I'm not going to do that. That's not what I signed up for. And I, I was really upset. Okay. It's like I said, no, I'm here to just tell me, press a button, buy, press a button, sell. Okay. That was my pain. I was solving my pain. Your pain is the same. I can press a button, go and go up. Okay. Even if I have to see 6 things, I don't want to understand candles. You know, I don't want to understand which is a marubozu candle, which is the doji candle. I don't want to do that. Okay. Just teach me basics. And I started searching, uh, couldn't find it. Anybody, everybody was selling either a bot that took a trade for you that you don't have to worry about. You just get 3%. Uh, win or then 87% drawdown. So it's kind of like I said, you know, I'm done. That's when we met. The structure was kind of clear, uh, and I said, okay, now because the, the mentor is trading in his way, what can I do to put my simple mind and solve the problem? That's where we met, and hence Q Algo was formed. So now let's look at, uh, before we talk about your results, let's talk about What you see— so I'm going to bring up the chart actually. Yeah, sure, sure. So that way we are— context is what we need to talk about. Otherwise, very good talking and people will get So you are looking at the QAlgo ecosystem, which comprises of multiple modules that do the things. So when you saw this, what was your first impression?

Right. You know, first impression was I'm looking at things that I've seen before, lots of indicators. Look like these. But what you've done here is it took a bit of trial and error to realize, wow, this is much more advanced. And you've customized and designed this platform very specifically for— at least I'm partial to trading zero-day SPX options, which means you're looking to scalp, you're looking for— you want to catch pivots, you want to see the market's been going down, but now it's going up, and you can feel that it's a reliable shift in the trend. And is now going up. And that can all happen in, you know, I don't want to say seconds, but in, in a very short period of time. And so most, uh, indicators are lagging. So you're going to be unfortunately, um, late. You're going to be late to the party, right?

Yeah.

Uh, this— if you're watching the, the, the top, and you've got a lot going on in the top chart, but also down, uh, the second chart, uh, the one in the middle, that throttle, the gas, you know, if it's red, You know, there's, there's, there's fuel taking you down. And if it's green, there's fuel taking you up. And then you've got the bottom chart where you're looking for the candles to go above or below what we call the river in the middle. And as that— and if all of these things are happening in confluence or starting to happen quite— I meant to say earlier, it's like picture a jet taking off with a very steep vertical ascent. That's what you're looking for. You're looking for that takeoff. Oh, wow, it's going straight up. Or wow, it's nosediving straight down. And when you see that shift in direction and the angle is sharp, you can feel very safe to jump in a trade.

Nice. So to summarize, while you had seen multiple indicators, you have worked with them, even though this was overwhelming, once you understand it, it's not complicated to watch and learn. Make sense? That's—

I would agree. It's, it's, uh, it's about training my eye to look across all the charts. So that takes a little work. You know, because you got to keep— you can't get laser focused on only one thing. Actually, over on the right-hand side, you see bull, neutral, neutral. So right there, down the middle, bottom, bull, neutral, neutral. Like, you can't obsess with that. You can't really obsess with any one thing. There's the white and yellow line running through the middle of the top chart, though. We call those the pancakes because they get, like, skinny or they get big, fat, and fluffy. And so it's all working together in synergy.

Do you want to explain over here that when you looked at it and you started to build the muscle memory of understanding, was there any feeling that this is actually working for you and it's not lagging? Because, you know, most indicators are lagging, except especially in price action. The only thing that is not lagging is the price itself.

Okay. Now that I think about it, some of the indicators might be slightly lagging. Some of them are almost not lagging at all, and some of them have zero lag, such as the candles, you know, the bars themselves. The bars themselves are gonna go flying up or down because those are just the, the market itself. So that's the real price action. So Again, it's about training yourself to balance the things that are moving fast with the things that are moving a little more slowly with the things that are moving much more slowly to come up with a best guess on whether it's the right time to get in a trade. You don't wanna be too early or too late. Yeah. I was gonna suggest if we're on the 18th here, we could— I'm staring up at a different monitor where I'm seeing your chart. But if we look, if I share my screen, I show you 5 trades I took.

They were all winners.

And then we could look at each one and see why I took it.

Yeah. And when, when you do that, I will also explain the different components. So we are on at 9:30, we are on the 18th. So tell me where you want me to take a look.

Yes. Do you want me to show my results chart now or later?

You can send it to me and I'll show it, but you can talk about it. So if you tell me the time.

Yeah, I'll tell you right now. It was 9:42. Exactly. 9:42. Okay, that's nice. I took a, a put. Yeah, I took a put and I was out at 9:43. So essentially that candle right there, um, I got in at the beginning of the candle and it dropped. You can tell it was a red candle because the, uh, outline— it's a— it's green in the body but it's red around it, right? So it's the open of the candle And then the close of the candle is where I entered and exited. And, uh, it was a small scalp. Yeah.

9:42. Okay. Right. Roughly. Yeah. All right. And then you are out in how many seconds?

Exactly 1 minute. Precise. 1 minute and 5 seconds.

Okay. Yeah. Do you have a question? Uh, but that was your first trade, uh, and you didn't know a lot about the structure at that time, the system. So when you saw that, okay, what was your motivation? What was— why were you taking a put when there was a background was green and pretty much actually a black background? So that's a range. What was it that you saw that was— that gave you a put?

Well, you know, it's not textbook as far as the Q algo. But if you look at the— you're on 9:41. If you go to 9:40, that candle also has a red border. I'm also looking at another chart where I'm seeing the color of the candles. On my own other monitor, but go to 9:40. 9:40, you're on 42.

Okay.

Yeah, that was actually a red candle down. Then 9:41 was a very large red candle down. And that's when I entered at the end of 9:41, that large candle down. And I got in and rode it for 1 minute through that 9:42 red candle. And what had happened was the throttle down in the middle panel was going down. It was going down fast. The pancakes were getting smaller, and the, um, the bottom chart, you could see that we had, uh, the formation of these red, uh, candles that were dropping as well. Yeah. So I— but I didn't stay in long because I realized we were actually still in an uptrend. So I stayed in only 1 minute, right?

So you actually Because that was the first day you took an entry here. There was a short candle, the throttle was going down, and then you took a scalp. Even though it was a dangerous move, you know, you got out. Uh, if you had not got out, um, and you would have stayed, yeah, you know, you would have been churned. Okay, so a risky move, a very risky move, but yes.

But now, okay, but now let's move from— put the, uh, put the mouse on 43. 9:43. Yeah, 43. Just do that. Uh, I, I was already out when that candle started, but let's go to 9:44 now. I got in a call right there, 9:44.

Before we go there, so this entry that you took, a put?

Yeah.

You took it at 9:40, right?

No, I took it in 9:42 at the beginning of that candle that you're on, at the top of that candle. It was a red candle. Yeah, and I got out at the bottom of that candle at exactly 9:43. So I rode it for 1 minute at the body of that candle from the top to the bottom. And then if you move 2 candles over to the right, I entered a brand new trade at 9:44 in a call.

Okay, but my question was, when you took the 9:42 trade, I know you were listening to somewhere else. Was that a motivation to—

No, sir. No, no, no, that was not. No, I, I wasn't. I just I, I knew I was taking a risky trade. That's why I exited extremely quickly, essentially in 1 minute.

Cool. All right. So what was your next trade?

9:44. That's 2 to the right. You're on 45. Yeah, 44. I entered a call and I rode that one for a minute to the middle of the 9:45 candle. Yeah, go 1 more candle over where you have the green arrow. And we'd had a huge candle, and that's where I got out toward the end of that one. And that one was—

that was a very smart entry. Yeah. You know why? Do you know? Now you probably know why, but at that time you didn't know. I, I bet you 5 days ago you didn't know that, but now you know. I know the secret, right? Yeah. Yeah. So when you took the 9:44 candle, okay, there was something happening here In relationships to the pancakes. Yeah, right, right. But you didn't know pancakes at that time very well. Now you do, right? Right. So, so that was a very good move. And the reason it was a good move— so number one, um, the pancakes were forming, the momentum oscillator was high, the trend was high, and then the fish were coming out of the river. Yeah, that was a great pull.

So that one I took $1.70 of premium, I think, on each contract then. Uh, and, and I wanted to say, I am trading in the beginning, uh, this first week I'm trading 1 contract, and I had 5 trades that day. All 5 were winners. Well, I'll show you the next 3, uh, but, uh, until I see a consistent win rate for a week or 2 Uh, and then I will start to go up in size. But I think any new trader, uh, doing this should do the same thing. Make sure they know what they're doing and make sure they know how to handle a loser, uh, before, uh, before just sizing up.

It's important. Correct, correct.

Cool. You want to see the next one? Yes, please. 9:56, got in a put.

Yeah, that's the one I remember taking it to. Um, yeah.

Got in a put, got out at 9:58.

That was it. So 2 minutes. Yeah. You got out and red background confirmation number 1. Pancake bake over here, really red. And then the fish is out. Cool. And then you close it at what time?

I closed it at 9:58 and 17 seconds. So that candle, I mean, a little early because that candle kept dropping. To be frank, I could have stayed in another 30 seconds maybe. But that actually was the bottom of the move at the end of that candle. So yeah, I set my limit order to exit. It hit it. So got in for $9.50, got out at $11.10. So it was about $1.60 on that one.

Okay, what was your next one? So that was a put. And okay, what's the next one?

Right? And then the next one, 10:03 took a call. 10:03 took a call. Call. Yep. So 10:03 took a call, and I had to sit in that one a little while. And you can see the size of those candles that followed. I got in toward the end of that, the top of that candle, pretty much toward the top. And I was in until 10:06.

At the beginning of the 10:06 candle, I got out. Yeah, that that was a 500 trade. Yeah. Maybe, yeah.

Yeah, it's a nice slow one.

Yeah. And, and at that point, and this is where, since you're talking, so you got out at, uh, you got it at 10:03. Yeah, you get out and, and you, and even though the, it's not very clear, the premiums don't move very fast.

That's correct. Yeah, they were really slow to move because the candles were sort of just zigzagging in a very, very small range.

And that's And because that's the significance, so the reason premiums don't move, that's why I avoid trading in the black background, because premiums could get you stuck. And then even though the move could be bullish, uh, if the premiums get you stuck, the fear gets you to close the trade. So we always do things because of fear, right?

Right.

So if the fear got you stuck, Then you say, well, this is not moving, I'm going to close it, but it may be a good move. So yeah.

So I got out after about 3, a little over 3 minutes, uh, at, uh, 10:06, and I had taken under a dollar. I took 70 cents because I could feel that it, it, you know, I sometimes like to give an analogy. If you're hitting a ceiling, you're banging your head up against this ceiling and something's preventing you from breaking through, right?

And it keeps—

the market will drop a little, come back, hit the ceiling, drop a little, come back, hit the ceiling, drop. And what one great trader that I've followed for years, he would call that, there's a passive seller.

Yeah.

He calls it a passive seller sitting there just selling every time people try to go above it, he just stops them. And so if that's what's there, I don't want to sit in this too long, it might drop. And that's what it did. You look 2 more minutes later, it just dropped.

So I got out in time. Yeah, liquidity.

And the last one is at 10:22. Uh, 10:22, I took a, I took a call, got out at 10:24. Yeah, let's take a look at that. Yeah, yeah, yeah, yeah. Everything was screaming to go, go long right there and got out at 10:24.

So that's a passive seller. He had grabbed the liquidity of everybody. Then you, when you got in, you know, the trend went up. It was a short-term, short-term trend, right?

Yeah. And then it started to go back down.

Yeah. So you had 5 wins in your 18.

That's it. 5 trades, 5 wins.

Okay. Any other things to share for— obviously you have been trading since 18, right? So, and then you want to share something today, did you say?

Yeah, there was one thing in terms of the something I noticed yesterday where we had a downtrend. If you— I think if you start to drag the chart and we take a look at yesterday's market, I guess starting at around 9:30, obviously you gotta drag it past the overnight, right?

What was the date yesterday?

Today's the 21st, so 20. It was 20th. Oh yeah, you got to do a little more dragging because it is 9:30.

So we are here.

So drag it all the way over so 9:30 is on the left, and we'll take a look. Wasn't there a big down move yesterday?

So 9:30 was here. Yeah. Um, good.

So you'll see that, um, it's a, it's a continual downtrend. And if you look at where it goes, the background goes from black to red.

And black. Yeah.

Yeah. Or like right there is one example. And then the background turns red.

Yeah.

Yeah. That right there would have been an entry right where it turned. The background turned red.

Over here.

A beautiful entry. Yeah. And then if you go to the right, the next time it turned black and then it turned red again. Yeah. Beautiful entry. But go up left. Go left and the other way, please. And you'll see there's 2 more. Yeah, yeah, here.

Yeah, black.

Yeah, it turned red, take an entry. Turn red, take an entry. And so what I wanted to say is it's a new observation I made, which is, you know, sometimes you're in a trend day, like yesterday was definitely a day for puts. Yeah. But you ask yourself, well, okay, it's going down, it's going down, it's going down, it's going down, which it just keeps going down. When do I get in? When do I get in? I don't know exactly when to enter. Well, when it goes from black to red. And I thought it did that more often yesterday than on this chart. I thought it had about 4 or 5 different instances. Multiple times.

Yeah, multiple times. So it opened up. You know, we were in the red day. Then it— so this blue line, the white line, the white line, the pancakes touches here. So this is the— so before, right? So the moment they touch, okay, they start to open up. So this is your gap. So this is a good entry. This is another entry here because that's the pullback.

You asked me earlier about buying the pullback.

Yeah, it's a pullback. Yeah.

Or selling the pullback. In this case, we're doing puts on a pullback.

So that's, that was my secret sauce that I was telling you about, that I've developed the pullback strategy also. And there's pullback here, there's pullback. You know, the trend is long-term. So this is the radar telling you, but pullback happens, you take the trade. And then these are pullbacks. So The yellow dots, okay? When the trend is constantly red, you see the yellow dot, one dot, second dot, pullback, pullback, pullback. You know, these are small pullbacks happening. And then these yellow boxes, the gummy bears, these are, you know, pullbacks. Then these are big pullbacks. You know, the gray boxes. The white boxes are pullbacks. And you, you had, uh, we won't talk about the winners yesterday, but you had, uh, you had all wins yesterday too, right?

No, yesterday I had 2 losers. And, you know, um, I'm trying to remember what it was. Oh, I was, I was just playing around with the stop loss and, and, and—

oh, okay. One of them was good.

Glad I got out because it was a call And it might have been if you look at that big black area to the left about 10:20. Here. No. Yeah, somewhere in there I might have fallen for it.

Ah, this one. You.

And I'm glad I got out.

But yeah, you went for a pause.

It was the other one came after that, and I was in a put, and it just went against me very little, and I got scared, and I got out, and and regretted it because of course.

What was the time? You know.

Oh. Let me pull up that chart. Yeah, the yesterday's scaredy cat move. I see one here. Yeah, this is the one. Ten. No, it was ten seventeen actually. I was in a a put. Ten seventeen. I got in a put. So, ten seventeen.

Ah, over here. Yeah. No, actually.

I mean, obviously, if I held on to it for 20 minutes or 30 minutes, we would have been okay. But I just bailed. Bad timing to get in a put.

Yeah, too, too late. So exhaustion, exhaustion. Like, you know, again, you, like you said, the best time to enter is in the black area. Okay. The end of the black area as it starts to turn. So, but you know, we learn these things, right? We learn, we kind of self-build our hypotheses, right?

Well, let me, let me ask you, if you go back and look at these times just prior to that put, go to 9:39. This is, we're on yesterday, right? Yeah, 9:39. 9:39. Yeah. Took a put, stayed in 1 minute. Now go to 9:41. Let me crunch this. Okay. No, no, I'm sorry. I'm sorry. 9:43 was the second one. 9:43. Yeah. Took a put. Yeah. Stayed in. Stayed in 20 seconds. Now go to 9:44. Wow. That's the next minute. Got in again. Took a put. Stayed in exactly 53 seconds. And then one more. One more. 9:51.

That was a great put.

Yeah, took a put and stayed in 12 seconds. So I was having a great time with puts, but then that one that I just showed you where I bailed, I was at the very bottom. I pretty much bought— I sold the very, very bottom there at 9:30, uh, at 10:17 rather. I don't know, I don't know why, you know, why I even got in it, but I got out.

Well, you don't know hindsight. Yeah, 50/50. All right, good. So let's talk about today. So do we have time? Yeah, let's just go over a few. Yeah, yeah, today we don't have to talk about everything. So I'll just reset this so it goes to today. Okay, um, let's see. So I will go to 9:30 since we're here.

So first trade, 9:32 call.

9:32 I couldn't get that trade because of the— my order didn't fill, fill, but I got up other ones. So 932 call. Okay. Yeah, that was a call.

Short call. Yeah, 932 call that lasted 15 seconds. Um, a 937 call. Yeah, that was a pancake call.

So yeah, 5 pancake up, up, 19 seconds.

Where where is 937?

937 is right here.

Yeah, I just wrote you know what did I say? 19 seconds. I mean just just wrote that really quick. And then the next one over the rest were puts three puts. I took a 945 put.

Yeah yeah 945.

I took and that one was nine seconds, guys. Yeah yeah yeah me too. And that one I got two dollars on the premium in nine seconds.

Perfect timing.

Nine nine nine.

Confirmation was a sell yellow box, you know. But this was a fake out.

Yeah. Yeah. A nine forty. So that was nine. What did I say? Nine forty five, right? Nine fifty three grabbed a put. Yeah. The next two were painful. Nine fifty three took a put and it was a win. I had to be in it a whole three minutes. I took a put.

Oh yeah.

I took a put at, uh, 9:50. I'm sorry, let's see, 9:53. Correct, 9:53.

Yeah, okay.

And I got out 9:55.

Yeah, I was kind of like, yeah, you got lucky. But yeah, yeah.

And then lastly, 9:57, took another put, sat through 3 minutes of pain. And got out with a, with a $1.10 of premium win in 3 minutes at 10%.

So when you took it at, what was the last one, 9:57?

Yes.

So my recommendation is I wouldn't take a put here because path shift is coming. V path is validated. That means that the path is validated to go up.

Ah.

Okay. So this was, uh, lucky move. But I actually took a call here. See, when I saw this and I wrote the call, uh, for $5 move. Yeah, but it was a short, you know, I was scalping like crazy. Nice day today. So you had all wins today?

5 out of 5.

Okay, good. Nice. So this is amazing, John. Um, great case study. We got to learn Your background. You are a good case study. You took some, um, citations for flying. You could have got a DWI, but, you know, the algo was not recommending, but you did it. So again, we have to go with our intuition, but algo will help you. As the other guy used to say, you know, algo will help me, uh, save me from the 15% losers that I don't want to get. So yes, that helps. That that is the help big thing, you know. So I send out the grandma newsletter. What's your thoughts on that? Because I I spent a lot of time in creating that story. Do you take the time to read them?

I have been reading them, and I've also been looking at the the you you know the SPX is what we trade. Yeah, and the levels. And where there's volume, where there's open interest, which options are trading, what, what, where there are potentially supports, resistances, or what you could call option call walls, put walls. Yeah, it's really critical. Um, I have, you know, I'm now only a week or so into this. I need to rearrange my entire workspace to have SP. I don't have it in front of me really. I want to get like a couple of, um, windows open with, with SPX, with some levels marked on SPX, because the last year or so I've only been marking up my ES chart.

So one secret that I'll tell you on this call today, I look at ES, but when I'm trading, I also have SPX. So sometimes I take a 5-second trade while ES hasn't even caught up, SPX is already, and vice versa. Wow. So having the SPX on the front of you will also give you another confluence that is not part of the indicator, okay, or the algo, but it's giving you a confluence because that's where you're trading, you know, you're trading the asset. So yeah, and SPX is a manufactured database, okay, so it runs faster. So you will understand that. So this was a great podcast. Any, any key takeaway For anybody that's, um, listening, uh, experts, from the expert.

Yeah, I would say that, you know, there, there's so many things to touch on, uh, but I would suggest, uh, watch your impulses. And, you know, you, you have to wait for these confluences. I know there was, uh, one or two trades I've taken in the last, in the last 6 days Where I looked back and I felt it was impulsive of me in a negative use of the term impulsive, like I was anxious. Let's say it was a put. The market just kept trending down, trending down. I just felt like I didn't want to miss this move, so I just jumped in sort of randomly and wasn't really focused on watching for those turning points. As I mentioned, you're looking for the sort of an acceleration, like it's suddenly going up, up, up, up, up, or it's going down, down, down, down, down. Like it's either accelerating up or accelerating down. Accelerating down, just because we've been going down, going down, going down, you don't just say, okay, well then I guess I'll just get in, right? That could be a mistake. And the other thing is managing your losers correctly. So something I'm forever battling with, but I think one of the cures that apparently the one that you found, Q, is to not have any losers. But that's— Then it becomes easy to manage the losers because, you know, whatever your philosophy around managing losers is, you don't really have to use it very often.

Correct. Um, and I can't say that I don't get losers. The thing is that I cut losses. So the end— at the end, and losers for me are like 10 cents, but the gainers are 50 cents. Okay, so that's what my loser is, 10 cents.

Beautiful.

I don't have dogs. Okay, I don't have dogs.

That's right.

That's what I say, I don't have dogs.

Yeah, if for someone new starting out, I mean, I, I've experimented. If you're using, uh, Thinkorswim, which is the platform, uh, most of us are using, You, when you enter, you can actually set a fixed exit, like a limit order to get you out at a profit, take profit. And then you can also have a fixed stop loss. And I've played around with the take profit maybe at $2. And then the, the stop loss, I've experimented with 30%, 20%. You know, you could even use 40%. But I think it's a good idea to have that stop just in case the some news comes out and the market suddenly blows up 30 points up or down, at least you got out without losing everything, you know. But, um, that's another whole topic. The other thing I was going to say, uh, I've lost it. Okay, that was it. That was sort of my closing remark.

One key takeaway, what time would you not trade regardless of the— how good the trade is? What is one time That you would not enter and wait?

I think the first hour is your best time. In fact, the first 30 minutes, 45 minutes is your best timing because as one mentor of mine called it, volume, volatility, and momentum. Volume, volatility, momentum. He called it VVM. If you've got volatility, you got big moves, you got volume behind the moves, and you got momentum in a direction, You can really make a lot of money as a trader. Sometimes around, if we're talking Eastern time, 11, 12 noon, 1 o'clock, you get into this sort of lackadaisical where it's like up a point, down a point, up a half a point, down a quarter of a point, up a point and a half, down a quarter point for half an hour, for half an hour. And if as a trader, if you kind of stare at it too closely, you might think you see the beginning of an up move and get in long. You can get killed in that kind of trading in that tight range. So watch out for that. And you know what the other thing is? If you've made your money in the morning and you walk away and you come back and you look and you say, oh, wow, it made a huge move up and a huge move down, and you feel like you missed it, don't feel like that. Just feel glad you had your 5 trades, 5 winners. If you become obsessed with watching the market all day long, hoping for some sort of a crazy move you're going to catch, you're more than likely going to take a few unnecessary trades and maybe Add a few losers to what was a very good morning, uh, win rate.

Yeah, that's overtrading. Yeah, I actually closed my Thinkorswim. So, you know, when this closed, I'm not gonna be motivated because when you restart, it takes time, you know. So I'm just saying, okay, I'm done. Great. Thank you for being a guest and a beta tester for QAlgo. Uh, it's glad to have you.

Yeah, I'm looking forward to learning a whole lot more. I really appreciate it, Q. Thank you for everything that you've shown me so far. Thank you, John. Hey, smart trades, no lie. Q album AI.