Crushing The SPY-T Challenge 2024: Make 25% Returns In Just 30 Days!

Crushing The SPY-T Challenge 2024: Make 25% Returns In Just 30 Days!

SPY T Challenge 2024

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It’s that time again, to prove to you the Spy-T trading can work for you. A new year brings the Spy T Challenge, demonstrating that you can achieve at least a 25% return per month or more through overnight swing trading. Achieving 25% in 30 days is ambitious; let’s see if your broker can match that. I begin this journey with you, starting with a smaller $1,000 account. However, my ambitions exceed the 25% challenge. I’ll soon share my actual goal and how I plan to reach it in this 30-Day Challenge. Remember, it encompasses roughly 20 trading days, depending on the month you chose to begin the challenge. I’ll provide insight into my process, beginning with how I traded the first few days.

Spy T trading is a relatively straightforward method, catering to those who aspire to be more than long-term investors but lack the patience or time for day trading. It leverages the overnight gap – the market closes at one price and opens the next day either higher or lower. This gap forms the basis of our trade, which consists of three parts: the timing of our buy at the day’s end and sell the following morning, the signal guiding our decisions, and our trading method that includes hedging, typically a two-to-one options ratio.

For this challenge, with my $1,000 account, I’ll focus on Spy T B trades, which are more conservative. However, I’ll also use Spy Tbt and Spy Tbq trades for more aggressive strategy days. These still involve a hedge but provide greater flexibility when our indicator is correct.

The next question is: Do we buy calls or puts? That depends on your indicator. If you have a preferred indicator, use it, especially if it’s been reliable for you. If not, that’s where I come in. At spytomorrow.com, we offer a free indicator available at 4 PM Eastern Standard Time, revealing market pressure direction – up or down.

By “pressure,” I mean the underlying market direction indication at the day’s close of the trading day (not necessarily end-of-day direction), which often predicts the next morning’s opening direction. High pressure suggests an upward opening, while negative pressure indicates a downward start. Our indicators also include confidence numbers, offering clues about the pressure’s reliability.

For my initial trade, I visited spytomorrow.com, where the main indicator pointed to downward pressure. However, having access to additional algorithms that showed a mix of signals, my confidence in the overnight movement was lower. So, I opted for the Spy Tb trade, the more conservative approach.

When trading options, volatility is very important. Currently, volatility is low, making SPY trades less attractive unless you opt for more aggressive strategies. Instead, I chose IWM for its higher volatility, enabling both conservative and aggressive trades. I purchased options about eight days out: IWM 196 put for roughly $1.80 and a IWM 201 call for about $0.89.

After waiting overnight, the market opened lower, and the 196 put was valued at about $3.16, while the 201 call dropped to around $0.36. I sold shortly after the market opened. Despite an early exit, IWM continued to decline, presenting further opportunities. However, before detailing the outcome, let’s examine a hypothetical scenario where the market direction was opposite to my trade, illustrating the potential of Spy T trading.

Suppose the indicator had suggested an upward trend, and we bought a 190 call for $1.90 and a 193 put for $0.82, totaling $2.72. If, the next morning, we sold the 198 call for $0.89 and the 193 put for $1.63 (a total of $2.52), our loss would be 7%.

In reality, I purchased the put for $1.77 and sold it for $3.21. I bought the call for $0.89 and sold it for $0.31. Holding onto the call, hoping for a rise, paid off slightly. Thus, my total investment of $2.66 yielded just shy of a 32% return.

The idea is to be as accurate as possible, minimize losses, and maximize gains over the next 30 days. For my next trade, despite a flat market opening and an incorrect indicator, I continued with Spy T B trades, adjusting my strategy based on the level of aggression or conservatism desired.

Depending on your approach, you can choose trades with varying expiration periods and risk levels. Whether you opt for aggressive short-term trades or more conservative long-term positions, hedging is essential to protect against market volatility. For my nextt trade, despite a downward indicator with low confidence, I chose another conservative Spy T B trade, this time with an IWM option seven days out. The market’s flat start followed by a downward trend led to a quick exit, resulting in a minimal loss.

The indicator was technically incorrect because, although the SPY opened flat, with a minimal change of 0.01% to 0.03%, it never really dipped below the zero line. However, the IWM remained low for most of the day and actually experienced a drop. If I had stayed in the trade, I could have profited from the IWM’s movement. Despite the indicator’s inaccuracy, adhering to trading our SPY-T trade rules. My rules permit re-entering the market once—not doubling down but repurchasing my option if I see a potential opportunity. Yet, I chose to remain patient and hold my ground. While there was a chance to profit by holding onto the put, my experience shows that 80 to 90% of the time, staying in leads to greater losses. So, despite the potential gain, exiting the market was a prudent decision.

You might wonder whether it’s wise to hold onto a losing option for longer. That decision is personal, but remember that time is not on your side, especially with short expiration dates. Theta’s relentless decay can erode your profits or exacerbate losses, even if the market eventually moves in your favor.

As the month progresses, I plan to undertake more aggressive trades. The first half of the month, often filled with economic news, can be challenging. Tomorrow, for example, the CPI report is due, which could significantly impact the market depending on the outcome. I’ll follow the indicator’s guidance but opt for a Spy T B trade, allowing for profitability regardless of market direction—provided the movement is substantial.

Money management is paramount: maximizing wins and minimizing losses is the essence of trading. Despite being up 7% on the account by the second day, there’s still much of the month left. It’s essential to control what you can: position sizes (determining market investment and risk levels), expiration dates (choosing between aggressive or conservative timelines), and the type of Spy T trade (deciding on a more aggressive Spy T Q trade, a conservative Spy T S trade, or avoiding directional trades for this challenge).

I advise against purely directional trades—buying calls or puts without hedging. While they offer significant gains, the lack of a hedge can increase risk. Consistency in earning is key, and several bad days of directional trading can deplete your account quickly, making a recovery difficult within the 30-day Spy T Challenge.

For your challenge, select a 30-day period and aim for 19 to 21 days of overnight swing trading. Decide on your level of aggression as you improve in Spy T trading, targeting an average portfolio growth of 25% or more each month. I look forward to discussing more in the next video.

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