About this template
New updated/improved bot posted here: https://app.optionalpha.com/community/posts/daily-shorts-3-day-price-trend
Intro:
I created this bot a while ago just to test an idea that I had. I don't have a backtest for it but it has paper traded pretty well since inception on Sept 19, 2022 (almost 9 months, with 174 closed positions). Slow and steady uptrend. I've been running it on SPY, but you can change the ticker if you want.
Allocation:
I started this bot with a $3000 allocation. It rarely exceeds 50-60% of allocation.
Entry:
Everyday at noon, open a new 7 DTE position (1 contract, customizable) based on the following 14 day RSI trend logic:
- If the ticker RSI is trending up over the past 3 days (intraday, prior day, and 2 days prior) and it isn't overbought (RSI < 70), open a SPS. Default set to -0.25 delta short leg, $5 wide wing (customizable).
- Else, if the ticker RSI is trending down over the past 3 days (intraday, prior day, and 2 days prior) and it isn't oversold (RSI > 35), open a SCS. Default set to 0.25 delta short leg, $5 wide wing (customizable).
- Else, if the prior 2 day trend is up, and the intraday RSI is curling down, open a SCS. Default set to 0.25 delta short leg, $5 wide wing (customizable).
- Else, if the prior 2 day trend is down, and the intraday RSI is curling up, open a SPS. Default set to 0.25 delta short leg, $5 wide wing (customizable).
-Else, open an IC. Default set to +/-0.15 delta short legs, $5 wide wings (customizable).
Updated Monitor to use Exit Options
Exiting Positions:
All values are customizable by setting the corresponding Exit Options, but these are the defaults.
Profit Taking:
-Accelerated PT: Close positions that reach 50% profit if open for Accelerated PT Days Open market day or less (default is 1 market day).
-PT High: Close positions at 75% profit if expiration is more than Reduced PT 1 DTE market days away (default is 2 market days). Uses a trail of 60%/15%, trail turns off below 45%.
If position return is below PT Nearing Expiration (%) (default is 45%),
-Reduced PT 1: Close positions at 40% if expiration is Reduced PT 1 DTE market days away or less (default is 3 market days).
-Reduced PT 2: Close positions at 25% if expiration is Reduced PT 2 DTE market days away or less (default is 2 market days).
-PT Low: Close positions at 5% if expiration is PT Low DTE market day away or less (default is 1 market days).
Stop Loss:
The monitor has 2 toggles to control stop loss exits. One continuously checks for stop conditions (stop loss and breached strikes); the other only checks at the EOD (at 3:30 pm and after). Here are the default values.
-Close positions at 200% stop loss if expiration is 1 market day away or less at EOD.
-Close positions if short strike is breached and expiration is 1 market day away or less at EOD.
At Expiration:
The bot will attempt to close positions at 3:30 pm and after on expiration day, if:
-Position return is < PT Expiration Close @ EOD (%) (default is 75%) OR
-Short leg chance of ITM is > Chance of ITM Expiration Close @ EOD (%) (default is 15%) OR
-Short leg OTM amount is < OTM Expiration Close @ EOD ($) (default is $2)
PDT:
This is a PDT safe bot (make sure Exit Options are set accordingly).
Performance: (Updated 9/16/23)
