You have probably seen many articles discussing examples of a day trade call. In my article, I will break down what a day trade call is and how to complete one. When trading options, you will learn to read the chart on a trading platform. For my explanation, I will use the TD Ameritrade thinkorswim platform. On the thinkorswim platform, you will see red and green candles forming. The colors of the candles are indicators in which direction the price is moving. The green candle will indicate the price is rising, and the red colored candle will indicate that the pricing is dropping. We will be focusing on the green candle going up.
Before you learn how to enter and exit a call option, you first need to understand the totality of the circumstances. In the stock market, you have two possibilities of movement; calls and puts. A call option is essentially someone predicting that the price of the option will rise. If the option goes up, the person who purchased the call option will make a profit. The goal is then to sell the contracts before the option starts to head in the other direction; in which they would then lose money. The biggest risk of a call option is that the stock price may only increase a little. This would mean you could lose money on your investment. This is because you must pay a premium per share. If the stock doesn’t make up the cost of the premium amount, you may receive minimal returns on this investment.
Day Trade Call Example: Setting the Playing Field
Before we can even think about rubbing chalk on our hands and getting ready to get into a trade, we have to start with the basics and label our support and resistance zones. This is because in doing so, we have narrowed down our playing field and increased our chances of profit. Just think of it like this, if you were playing a sport, and you didn’t know what team you were on, how would you know who to pass to? Or which side was the appropriate side to score on? The same applies to day trading and knowing what open positions are appropriate. Once your playing field is narrowed down, you can then focus on strategy.
Just like life offers several paths, directions, choices, and options that have future consequences; so, does day trading. A day trader cannot go in blind without a plan, in which they then get themselves in the negative and start to borrow funds from people or a brokerage firm. You have to use a tested strategy, or you could lose a lot of money. Options involve risk, but it is also to note that you can do things to minimize your risk tolerance. Things like not holding a position overnight, and closing transactions quickly if the market starts to go against you.
It may seem like a lot of little things to remember, but with the MK VIP training program everything is laid out for you where all these pieces are put together for you. It won’t be like other programs where you get a puzzle with 500 pieces, and you are left alone to try and figure out how to get to the end. You have assistance the whole way through your training. After you graduate from the program, you have resources constantly at your disposal.
Going Hands-On
Now that you have your playing field, you need to implement your strategy, so you can succeed in your trading activity. For the strategy, you will need to follow a sequence of candles. You will need a zone candle, reversal candle (opposite color), confirmation candle, and then an entry candle. For a call, we will be predicting that the market will be moving upwards. Looking at the image below, it is evident that most of the day was a great opportunity for puts. But then we take a look and as we approach power hour; the last hour of the business day trading hours. 384.41 has been a zone that has been retested, meaning that as the market fluctuated, this specific zone was revisited. I have marked the areas in yellow, so you can follow along in the image below.
For this last touch, let’s keep an eye on it, as it may turn into an opportunity to enter into a trade. So that you can keep up, I zoomed into our target area, so it can be clear what we will be doing. The yellow dot indicates a touch-on out zone, the green candle next to it is our reversal candle, and the one above that is our confirmation candle. This is confirmation that the market will trend upwards, since the candle formed above the reversal candle. Then the blue dot marks our entry candle; in which we will not purchase a contract and enter. Now we just have to watch the chart and our exit is planned for when the 388.83 zone is touched; the image is labeled below.
We have now hit our target zone, and we will walk away with a profit. Once the target zone was touched, we sold our position and closed it. We can now continue to watch the market to see if it will continue to go up for the day to enter another position or just call it a day. Since most traders don’t have $25,000 in their accounts first starting, they are limited to three trades in five day period. If an investor does not abide by the pattern day trader rule, they will be labeled as a pattern day trader and will be forced to deposit $25,000 in their brokerage account. This will lock up your day trading account until The image below is to show you where we exited our position.
Summary: Day Trade Call Example
Now that we have explained what a day trade call example is, you have an understanding of what a day trade call looks like. I explained to you how to minimize risk and how to get your playing field ready. I then walked you through using the TD Ameritrade thinkorswim platform. Furthermore, I showed you how to smoothly enter and exit a trade and walk away with a profit. We also discussed the rules to keep in mind so that you don’t get your trading privileges away from the financial industry regulatory authority. I can teach you the best strategy that if you put in the work and practice you will have consistent winning trades.
As simple as I just walked you through a call, that is exactly how it will be for your trading if you put in the work. Imagine how successful you could be in combining this strategy with the additional knowledge that the MK VIP trading program provides. My goal has always been to help as many day traders achieve their personal financial goals, whether they are novice traders or experienced traders. The MK VIP training has plenty of resources to help you get started on reaching your day trading goals. With my program, you can learn how to begin day trading, and you will be profitable for at least 80% if not more of your trades.
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Maurice Kenny has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
Feel free to check out other FREE educational resources to help guide you as you begin your new journey to financial freedom.
Also, download a (FREE E-BOOK) by Maurice Kenny, “DAY TRADE LIKE A MILLIONAIRE.”
