DISCLAIMER: Stock, forex, futures, and options trading is ...

DISCLAIMER: Stock, forex, futures, and options trading is not appropriate for everyone. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using the information in this special report will generate profits or ensure freedom from losses. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a market. The impact of seasonal and geopolitical events is already factored into market prices. Under certain conditions you may find it impossible to liquidate a position. This can occur, for example, when a market becomes illiquid. The placement of contingent orders by you, such as "stop-loss" or "stop-limit" orders will not necessarily limit or prevent losses because market conditions may make it impossible to execute such orders. In no event should the content of this correspondence be construed as an express or implied promise or guarantee that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

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Options Income Engine: Charting Software & Broker Trading Platform

Objectives: review good charting software and plot the Options Income Engine indicators. And then we want to review a typical online broker trading platform.



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Options Income Engine: Charting Software & Broker Trading Platform

Okay, here I am looking at a chart of Tesla, TSLA, compliments of Trade Navigator Charting Software by Genesis. This is excellent charting software that you may want to use in charting the markets that you are trading. Other good charting software packages include TC2000 by Wardon Brothers and Metastock, and there are others. So I am showing you the Trade Navigator software, most good charting software packages behave in a similar fashion, and what you want to look for is ease of use, good graphics, high functionality and, of course, low cost.

So here we have the TSLA daily chart showing the candles in the candle format. You can change the format by clicking on the `Edit Chart" settings, going to price and changing from candlesticks to open high-low close bars, those are the more traditional kinds of price charts. But I prefer candles even though they give you the same information as the price bars, it's easier to see at a glance what's happening, if it's a down day you are going to see a big red candle body and if it's an up day you are going to see a green candle body. So you can more easily see what is happening here in the price action.

Okay, now to add an indicator, you can add several, but if they are not already listed you can go down to add, click add indicator, and that brings up a whole array of easily over 100 different, commonly used, technical indicators. Okay, now if it is already listed under



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Options Income Engine: Charting Software & Broker Trading Platform

price pane I am going to do moving average, the 50 day moving average, click okay. And there you have it, that simple.

Okay, now if you want to add more indicators, in our case we are more interested in the percent K stochastic, with a setting of 8/3, you can change these settings if need be and you can make the color of the line anything you want. Now for our purposes I have chosen K to be blue and the stochastic D to be red, even if we are not using the D, when you see the stochastic plotted, you're typically going to see both the K and the D. And then you can set your overbought oversold levels if you want, wherever you want. Let's say we want to change this (value) to 25 for oversold, click okay, and there's our percent K at the bottom of the chart, with the oversold dashed line. Anytime the percent K gets down below 25, it's a good indication that market is probably oversold. As long as it's in an uptrend, that could be your cue to watch for an entry on the long side. That occurred again over here.

Okay, now let's add the average true range. Again, I can make that any value I want, in fact let's just play with that a little bit. If we turn that into 15 (from 20) watch what happens to the line here. Click okay, and you see that the line changes because we are only using 15 days. With Options Income Engine, though, we want to use 20 days. It gives you a smoother, less erratic line.

Okay, and then if we want to add yet another indicator, the on balance volume, again we can make this any value we want. You can even customize the indicator if you'd like, base it on something besides the close. You wouldn't probably do that with on balance volume, but it just shows you the flexibility the charting software provides you. Close, click okay, and there's our on balance volume. And those are the only indicators we are using with Options Income Engine, accepting the SPY filter for our short traders. And in that case we are using a moving average exponential, with an `X' next to the moving average, of 50, and I believe we had that coded in green. And we had a moving average of 200, coded in brown. So click okay. Now we are not applying these to the underlying security but we are applying them to the SPYs, so let's change to the SPY chart, simply by clicking on symbol and bringing up the symbol chart, and there's our SPY.

So now we can evaluate the SPY, which is again the SPDR S&P 500 ETF. Is it in an uptrend? Well, if you look at the 200 day moving average in brown it will tell you, yes, it is in an uptrend. It's going up. So we wouldn't go short on that would we?

Now our other short filter; is the green exponential moving average going below the 50 simple moving average? Well, yes it is, which would tell us that at least that condition is met for going short or buying a put option, however, we can't do it because 200 is going



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