Make $$$ Trading SPX Options from Day 1
How to Profitably Trade SPX Options Without Watching the Market All Day
Are you looking for a simple and time-efficient way to trade SPX options? This post outlines a beginner-friendly blueprint using Alpha Crunching’s TTR indicator to make confident trade decisions. With just a few minutes per week, you can implement this strategy and spend less time glued to your screen.
Why This Strategy Works
This strategy is designed for retail traders who want:
- A data-driven edge in trading.
- A hands-off approach with minimal screen time.
- Reliable returns from SPX put credit spreads.
Step 1: Leverage the Alpha Crunching TTR Indicator
What is TTR?
TTR stands for Tomorrow's Triumph Rate. It represents the historical percentage of times the SPX closes higher the next trading day over the past two months.
How to Use It:
- Log into Alpha Crunching.
- Check the TTR for Monday. For example, if Monday’s TTR is 63%, it indicates SPX has closed higher 63% of the time the next day (Tuesday) over recent months.
Key Criteria:
- A TTR value above 60% (preferably increasing or flat from the previous week) suggests the odds are in your favor for a positive close the following day.
Step 2: Confirm Market Trend with the 20-Day SMA
Before entering a trade, validate the market trend using the 20-day Simple Moving Average (SMA).
- Above 20-SMA: Indicates an uptrend and favorable conditions for the trade.
- Below 20-SMA: Suggests caution, as the market may be in a downtrend.
This dual confirmation ensures you avoid taking trades in unfavorable market conditions.
Step 3: Execute the Trade
Once the conditions are met:
- Trade Type: Sell an SPX put credit spread at-the-money.
- Expiry: Use a short-term spread expiring the next day (e.g., Tuesday).
- Risk-Reward: Aim for a 3:2 ratio to balance profitability and risk.
Historical Performance
Backtesting with Alpha Crunching shows impressive results:
- Win Rate: 81% over nearly two years.
- Profitability: Over $10,000 trading three spreads at a time.
- P&L Curve: Consistent gains with reduced risk due to selective trade timing.
The strategy avoids trades during market downtrends, further boosting its edge.
Weekly Routine
- Sunday:
- Log into Alpha Crunching to review TTR data for Monday.
- Ensure the TTR is above 60% and is flat or increasing.
- Monday:
- Confirm SPX is trading above its 20-day SMA.
- Place your put credit spread at the end of the day.
Why This Strategy is Ideal
- Requires less than 10 minutes of weekly analysis.
- High win rate with robust historical performance.
- Focuses on data-driven decisions for consistency.
Closing Thoughts
This SPX options strategy combines simplicity and statistical edge, making it perfect for traders who want strong results with minimal time investment. Try it out and let us know how it works for you in the comments!
For more trading insights and strategies, stay tuned and explore Alpha Crunching’s tools.
