Enter On Red Days ONLY Explained

In Options Auto Trader, you have the ability to control when your trades are executed based on market conditions. One of the advanced entry rules available is the Enter On Red Days ONLY setting, which allows your auto trader to enter trades exclusively on days when the market is experiencing a decline in price. This article will explain how this feature works and how to enable it to align with your trading strategy.

Step 1: What Are Red Days?

A Red Day is defined as a day when the current price of an asset is lower than its opening price. For options sellers, red days can offer a significant advantage because volatility tends to be higher, allowing you to collect more premium. Higher volatility generally means higher option premiums, which can benefit options sellers looking to capture more income.

Step 2: Default Behavior (Set to False)

By default, the Enter On Red Days ONLY setting is set to false. This means your auto trader will enter trades based on the regular rules and frequency you have set, regardless of whether the day is a red day or not. The auto trader will follow your specified entry days and frequency, entering trades whenever your conditions are met.

Example:

If you have your auto trader set to enter trades on Mondays and Wednesdays, it will do so on those days even if the market is not experiencing a red day.

Step 3: How to Enable "Enter On Red Days ONLY"

If you want your auto trader to only enter trades on red days, you can enable this feature:

1. Log into your Options Auto Trader account.
2. Go to the Auto Trader Settings for the bot you wish to configure.
3. Scroll down to the Advanced Entry Rules section.
4. Look for the option labeled "Enter On Red Days ONLY" and set it to True by checking the box or toggling the switch.
5. Save your settings.

Once this setting is enabled, the auto trader will only execute trades on days when the current price is lower than the opening price (i.e., red days).

Step 4: How "Enter On Red Days ONLY" Affects Other Rules

When the Enter On Red Days ONLY setting is enabled, it overrides the specific entry day rules you may have set. This means that even if you’ve scheduled trades to occur on specific days (e.g., Mondays and Wednesdays), the auto trader will ignore those day rules and only enter trades when the market is experiencing a red day.

Example:

If you have your auto trader set to enter trades on Monday and Wednesday, but Monday is not a red day, the auto trader will not enter a trade on Monday. However, if Wednesday is a red day, the trade will be placed on that day.

Frequency Still Matters:

While this setting overrides specific entry day rules, the frequency rule you’ve set will still be followed. If you’ve set the frequency to once a week, the auto trader will only enter one trade during that week, but only on the first red day that occurs.

Step 5: When to Use "Enter On Red Days ONLY"

This setting is particularly useful for options sellers who want to take advantage of the higher volatility often associated with red days. Higher volatility can result in higher option premiums, making red days ideal for collecting larger premiums and potentially increasing profit.

However, this setting may result in fewer trades if red days don’t occur as frequently. It’s important to weigh the potential for larger premiums against the possibility of reduced trade frequency.

Conclusion

The Enter On Red Days ONLY setting in Options Auto Trader gives you more control over when your trades are executed, allowing you to take advantage of higher volatility on red days. By enabling this setting, you ensure that your trades are entered only when the market is in decline, which can result in higher premiums for options sellers.

If you have any questions or need help configuring this setting, feel free to contact our support team for assistance.