The objective of this video is to provide clear instructions on how to set the manage details for your Auto Trader. By following these steps, you will be able to effectively set the take profit percentage, stop loss percentage, early management, and hedge options in order to maximize profits and minimize losses.
Step 1: Set Take Profit Percentage
Determine when the auto trader should close the trade for a profit.
Example: If you brought in $1,000 in credit and set the take profit to 75%, the auto trader will close the trade when the profit reaches $750 (75% of $1,000).
Step 2: Set Stop-Loss Percentage
Define when the auto trader should close the trade to mitigate losses.
Example: If you brought in $1,000 in credit and set the stop loss to 300%, the trade will close once the loss reaches $2,000 (300% of $1,000 credit).
Step 3: Set Early Management (Days)
Decide when to close a trade early before it reaches its expiration date.
Example: If you set early management to 21 days, the trade will automatically close once it has 21 days or fewer remaining before expiration.
Step 4: Set Hedge for 1-1-2 Strategy (Optional)
If you are trading a 1-1-2 strategy, you can choose to close the entire trade when it hits your take profit percentage or set up a hedge when the stop loss is triggered.
You can opt for a PDs hedge or a ratio hedge based on your preference.
Step 5: General Advice for Stop-Loss Settings
For non-defined risk trades (like selling puts, calls, or strangles), it is recommended to set a stop loss.
For trades with predefined stop losses, like iron condors, you typically do not need to set a separate stop loss.
Step 6: Use the Question Mark Icon for Help
If you need further clarification on any setting, click on the question mark icon to get an explanation with examples.
Step 7: Final Review
Review all the settings to ensure they match your preferences.
If you have any questions, reach out using the chatbox for further assistance.
Once you have set your trade management rules, the auto trader will follow these parameters to help optimize your trades and manage risk.
Cautionary Notes:
It is important to understand the Auto Trader settings and their implications before making any changes.
Be cautious when setting the take profit and stop loss percentages to ensure they align with your risk tolerance and trading strategy.
Double-check all calculations to avoid any errors in setting the trade management rules.
Tips for Efficiency:
Use the question mark icon next to each setting for a detailed explanation and example.
If trading non-defined risk trades (e.g. selling puts, selling calls, strangles, 1-1-2), it is recommended to set a stop loss.
For iron condor trades, stop loss is not necessary as it is predefined.
If you have any questions, refer to the question markers or use the chat box for assistance.
TERMS OF SERVICE: Please be aware that continued use of the Options Auto Trader is subject to our Terms Of Service. If you have any questions or wish to review these terms, feel free to visit the website.