In this article, we will discuss how I trade my tastyworks plan. When I started trading this new tastyworks account, I set a few hard and fast rules. I decided that I would be completely transparent with this account and share all of my trades in the weekly Coffee With Markus YouTube Series. I also elected to exclusively trade the PowerX Strategy using the PowerX Optimizer.
Trading this new account opens up several opportunities for those who actively participate in the Coffee With Markus YouTube Series.
For one, you’ll be able to observe trades that I execute on tastyworks during the live sessions. If you have questions regarding these trades, I typically address them during the extended Question and Answer session.
You’ll also see first hand how I use a proven strategy, the PowerX Strategy, to set up entry and exit points for each trade. I also use this strategy to manage the risk or position size of each trade.
And last but certainly not least, you’ll be able to learn how I use the PowerX Optimizer software to consistently execute profitable trades. This proprietary software was developed by our team of developers over several years. The algorithms used behind the scenes in the PowerX Optimizer software suite have been optimized to find high-probability trades based on the parameters you elect.
Not only does this software find high probability trades, but it also highlights the best entry and exit points to maximize your profitability and your probability.
How I Trade My tastyworks Plan
Lets go over some basic account and strategy information. I’ve funded this account with $20,000. I will only trade options using the PowerX Strategy and the PowerX Optimizer.
Trade Specific Rules In my tastyworks Account
The entry and exit specific rules that I will use to grow this account will be based on my PowerX Strategy. I will only trade these rules and refine this strategy as I take more trades. Typically I take 40 trades to gather enough information to determine what adjustments need to be made to the strategy. This is how I will trade my tastyworks plan.
Entry Specific Strategy
I will only use the PowerX Optimizer with default settings AND I will take all trades unless:
- a.) The stock is crazy.
- b.) The bid-ask spread is too big.
- c.) The risk of options assignment is more than 2% of the account or $400.
I will only trade “in the money” (ITM) options and I will adjust the position size so no trade exceeds $400 or 2% of the total account value.
Exit Specific Strategy
I will use the Black Bar test to determine when I should exit a trade using the two following indications:
- a.) Indicator opposite direction: warning
- b.) Indicator opposite direction: exit next morning
OR I will either exit the trade with a stop loss the next morning or after I hit my profit target the next morning.
Important Notes Regarding How I Trade My tastyworks Account
I generally recommend not having more than 5 open trades at any given time in your account. For the purpose of refining this strategy, I will specifically over trade this account. Meaning I will take every trade that the PowerX Optimizer software recommends. This will probably result in more than 5 trades. I am not recommending that you take this approach. I am specifically violating this rule to accelerate the acquiring data so that I can refine this strategy and determine what works best for this specific market condition using the black bar rule.
The secondary goal for trading this account is to determine how long it will take this strategy to gain $2,000. This would constitute a 10% return on investment.
To accelerate refining this strategy, I am willing to put $4,000 at risk which equals 20% of the total account value OR complete 40 trades, whichever comes first.
These are the basic criteria that I will use to execute trades and grow my new tastyworks account, live in CWM..
Trading Futures, options on futures and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. The lower the day trade margin, the higher the leverage and riskier the trade. Leverage can work for you as well as against you; it magnifies gains as well as losses. Past performance is not necessarily indicative of future results.