920 Trading Process

The 9/20 crossover trading strategy is a time-tested trading strategy that utilizes the power of the 9 period simple moving average (SMA) and the 20 period simple moving average (SMA) to generate highly probabilistic trade setups. While there are nuances to the strategy that can only be learned through experience, the basic premise is simple: buy calls when the 9-period simple moving average (SMA) crosses above the 20-period SMA, and buy puts when the 9-period SMA crosses below the 20-period SMA.

It's critically important to have ironclad trading rules in place before using any strategy. Feel free to use these or your own, but the most important thing is to be consistent with following them.

Law 1: Protect your capital at all costs.

Law 2: Predefine your risk before entering a trade.

Law 3: Always follow the trend.

Law 4: It's better to be out of a trade and wish you were in than to be in a trade and wish you weren't.

Law 5: Keep your emotions in check. Hope and fear are your biggest enemies.

Law 6: The first part of the move is typically the strongest.

Law 7: Contracts will lose value in times of consolidation/accumulation and through theta (time decay of money), especially the closer to expiration.

Law 8: Let your trades play out to their natural conclusion. Have a specific reason for closing a trade as well as for opening it.

Law 9: Successful trading is based on probabilities. Judge your trading effectiveness over a series of trades, not trade by trade.

Law 10: Losing trades are part of trading. Don't get down on yourself when a trade doesn't go in your favor.

Law 11: Trade execution is more important than making money. As long as you have a verifiable trading edge, the probabilities will work out in your favor.

Law 12: Do your best to trade with a carefree attitude. Trading is a marathon, not a sprint.

Law 13: Trust the process. Fall in love with the process, as it is the process that will ultimately determine your success or failure.

Law 14: Treat trading as you would any other business endeavor.

Law 15: Only trade A+ setups and don't chase trades. If you miss the move, wait for the next setup.

Law 16: Your success or failure is 100% dependent on your ability to follow your trading laws/rules and process.

Law 17: Don't watch your P&L while in the middle of a trade. Let price action relative to the 9 and 20 determine when to close your trade.

Law 18: Don't try to maximize the value of your plays. Rely on price action relative to the 9 and 20 to give you your exit signal.

The trading process starts in premarket. It is best to set your key levels before the opening bell. 

1. I set the premarket high and premarket low by drawing a horizontal line at each of these levels.
2.  I then look for 5 minute double tops and double bottoms.
3.  I then draw a horizontal line at these levels. As you will see, these levels will give you key targets throughout most trading days. 
4. After I set my premarket levels, I look for possible ranges outside of premarket levels.  I do this by looking for previous day 30 minute double tops and double bottoms.  These are also good areas to potentially target throughout the day. 

These levels will act as support and resistance throughout the trading day.