GOLDEN RULES

Mindset!
Price is the only absolute. Value is just perception, not reality. Always remain objective.
Be bold when I am a Champ (i.e. winning), and stay on guard when I am not. Trade smaller
position size when Im losing, and do not attempt a knock out.
If Im not willing to take the ball, I cant win! I get paid for taking risk, and I must be ok with the
risk.
Focus on trading like a Super Star, not on the Profits.

Technique
No trades on, or before, earnings.
Know the overall trend of the Market, and all Green and Red zones. The overall Market trend is
most important, and always wins.
Momentum precedes Price - Trade what you see, not what you think. If the Market is making
higher highs and higher lows, dont attempt bear calls unless the Market is entering a significant
red zone on a daily chart. If the Market or stock is making lower highs and lower lows, dont
attempt bull puts unless the Market or stock is entering a significant green zone on a daily chart.
Always remember: price has a memory in green and red zones.
Always control emotions - Panic and Fear are not strategies for Success!
Always know my expectations before entering a trade.
Always plan my trade, then follow my plan. No Matter What!
Do not watch intra day charts when making decisions on a daily chart.
If I cant accept the risk, then the position size is too big.
If I find myself wanting to move my stop during the intra day session, then Im not ok with the
original game plan... reduce size until this desire goes away, and I can let the trade work.
Take advantage of time decay over holiday weekends only if price is in a major zone.
Its not profit until its in my account. Dont count chickens before they hatch, and never attach
myself emotionally to the outcome of the trade. Remember: I dont need the credit on this trade
bad enough to allow a small loss to become a big loss.
Do not enter new trades if Im sick, or not feeling well. Never exit a trade just because Im not
feeling well.
The only secret in trading is ME. Control my emotions and I control my profitability.
Always Take Action when Im supposed to.
My rules are the Edge I need win.
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Page 1

DAILY PREP - PRE GAME

Check my PC before the Market opens and verify that all charts are loading properly.
Know my brokers phone number and my account number just in case of an emergency (loss of
power, PC freeze, etc).
Do not trade on an empty stomach.
Analyze my Daily, Weekly, and Monthly Charts to verify proper zones.
Quickly review all open positions, and verify that everything is still trading within my plan.
Futures lead the overall Market... know the trend of the YM, ES, and NQ contracts.
Review stock Charts and set alerts for possible trade zones that could be hit that day (red or
green depending on the Market trend).
What am I expecting today based off my personal chart analysis? Journal my thoughts and
review at the end of the week to see if Im improving my ability to read charts.

My Notes:

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Page 2

TAKING THE TRADE

Conservative

on

Weekly Options

Never will I attempt to sell Monthly Options using my Conservative weekly strategy.
I always look for the extremes to sell Weekly Options

Upper Band Trade (Bear Call Only) - 1.) First, price action penetrates
upper Bollinger Band 2.) Second, CCI must be at a +200 to be a valid setup at the extremes.

Set up

Confirmation

My Notes:

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Page 3

TAKING THE TRADE

Conservative

on

Weekly Options

Never will I attempt to sell Monthly Options using my Conservative weekly strategy.
I always look for the extremes to sell Weekly Options

Lower Band Trade (Bull Put Only) - 1.) First, price action penetrates
lower Bollinger Band 2.) Second, CCI must be at a -200 to be a valid setup at the extremes.

Set up

Confirmation

My Notes:

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Page 4

Aggressive

on

Weekly Options

Always stick with the TREND using my aggressive strategy

Northbound Trade (Bull Put Only) - Price action should be in an uptrend

floating between support of the 20 EMA and the resistance of the upper Bollinger bands.
Look to sell bull put spreads off the support bounce of either the 20 EMA, or the lower
Bollinger Bands when the CCI is between -50 and -100. NOTE: Do not discount upward
sloping trend lines within the Bollinger Bands (wait for the uptick of the CCI for Confirmation
off support bounce).
WARNING: NEVER ATTEMPT TO SELL WEEKLY BEAR CALLS IN A UPTREND. ALL
CCI READINGS OF +100 ARE TO BE IGNORED, AND SHOULD NOT BE IDENTIFIED
AS POTENTIAL TOPS OR TURNING POINTS FOR BEAR CALL SPREAD TRADES.

Set up

Confirmation

My Notes:

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Aggressive

on

Weekly Options

Southbound Trade (Bear Call Only) - Price action should be in a

downtrend, floating between resistance of the 20 EMA, and the Support of the Lower
Bollinger bands.
Look to sell Bear Call spreads off the resistance bounce of either the 20 EMA or the Upper
Bollinger bands when the CCI is between +50 and +100. NOTE: Do not discount
downward sloping trend lines within the Bollinger Bands (wait for the down tick of the CCI
for Confirmation off Resistance bounce).
WARNING: NEVER ATTEMPT TO SELL WEEKLY BULL PUTS IN A DOWNTREND ALL CCI READINGS OF -100 ARE TO BE IGNORED AND SHOULD NOT BE
IDENTIFIED AS POTENTIAL BOTTOMS OR TURNING POINTS FOR BULL PUT
SPREAD TRADES.

Set up

Confirmation

My Notes:

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Page 6

Aggressive

ON

MONTHLY Options

Use exact rules above for Price Action Confirmation, except sell the front month options.
When confirmation appears, always sell an option with an 85% probability of expiring worthless.

Northbound trade (Bull Put Only) - Same rules apply as aggressive

weekly entry.

Set up

Confirmation

Southbound Trade (Bear Call Only) - Same rules apply as aggressive

entry.

Set up

Confirmation
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Page 7

ZONES
Determine where the battle has taken place and wait patiently in ambush mode. Be
aggressive the first time the Bollinger Bands align in a Green or Red Zone - This is my
Probability Enhancer and I will always take those trades on the first re-entry of those zones.

Probability Enhancer

My Notes:
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Page 8

STRATEGIC OUTLOOK
To further enhance my odds, I will always confirm the TREND of the weekly chart to ensure I
have a strategic big picture outlook before placing a trade on a daily chart.

ALLOCATE PRECISE CAPITAL

Never risk more than 1% of my entire account value on a weekly spread trade.
Never risk more than 3% of my entire account value on a monthly spread trade.

SIZE MATTERS
weekly Spreads
These are the acceptable rate of returns when selling
weekly spreads.
ATM = 50% or Greater on invested capital
1 Strike OTM = No less than 35%
2 Strike OTM = No less than 25%
20% is absolute minimum I want to receive as a credit on weekly spreads

monthly Spreads
The lowest acceptable rate of return is 10% with an 85% probability of success. If I cannot get at
least 10% on the trade, I will look to deploy my capital elsewhere. The only exception to this rule
is if I can be at least 10% away from the price of the stock and still get a minimum of 8% ROI on
the spread I plan on selling.

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Page 9

WHEN TO EJECT
First and most important Rule - Never allow a small loss to become a big loss. Dont predict price
action. Only react to it!

Weeklies - Conservative and Aggressive Eject points

Stock price between $1 - $50: 5% Above the Active High or Active Low - Hit Eject
Stock price between $51 - $100: 3% above the Active High or Active Low - Hit Eject
Stock price $101+: 1% to Maximum of 1.5% above Active High or Active Low - Hit Eject

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Page 10

WHEN TO EJECT
First and most important Rule - Never allow a small loss to become a big loss. Dont predict price
action. Only react to it!

Monthlies
Bear Call Spread - If the stock reverses downward trend, and violates resistance and resistance
becomes support, Ill close out the entire trade.

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Page 11

WHEN TO EJECT
First and most important Rule - Never allow a small loss to become a big loss. Dont predict price
action. Only react to it!

Monthlies
Bull Put Spread - If the stock reverses upward trend, and violates support and support becomes
new resistance, Ill close out the entire trade.

BUY TO GET PAID

Any time before Option Expiration, if the spread I sold has a value of .05 or less, I will buy back the
spread and free up the margin to deploy my capital into another opportunity.
DISCLAIMER
You have not been promised a profit by applying any of the trading rules in this 12 page trading plan. You agree
that The Ziegler Group, LLC, its employees, members, agents, and affiliates are not responsible for any losses you
may incur as a result of following this plan. You agree not to hold The Ziegler Group, LLC, its owners, members,
employees, agents, and affiliates liable or responsible for any possible claim for damages arising from any decision
you make based on the information in this trading plan; even if The Ziegler Group, LLC, its employees, members,
agents, or affiliates were solely negligent. Past performance is not indicative of future performance. Always consult
with a licensed broker before making any purchase or sale of any stock or option, and never trade with funds you
cannot afford to lose.
Page 12
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