Options Made Easy: Your Guide to Profitable Trading, Second Edition

Step 2—Set Your Filters^[1]

^[1] This won’t be necessary if you choose to trade just one stock. For example, many traders simply trade the SPY, which is the stock derivative equivalent of the S&P 500 index. By and large the SPY mimics the movement of the S&P 500 and has its own options chain, so you can trade the options too. Personally, I’ll trade the SPY but only on the high-probability scenarios. Remember, there’s no shame in sitting on the sidelines if you’re not sure or if your entry requirements are not met.

You can build sophisticated filters on even the most reasonably priced charting packages nowadays, such as TCNet (Telecharts 2000), which now comes with real time data.

What Do You Filter For?

This depends on your personal preferences. ...