A Guide on How Dino DayTrades Works
The information below is an expansion of my original pinned tweet. If you have any questions or need more explanation on something, ask in the tweet thread below.
A quick guide to utilizing Dino the Day Trading Dinosaur’s tweets
— Dino Daytrades (@dinodaytrades)
Oct 17, 2022
How does the watchlist work?
Simple. I give the specific option contract and when the alert triggers for a given stock price. If no date is given, it’s always the nearest expiration.
$AAPL 150c>140 means take the 150 call contract expiring this Friday when Apple’s price goes over 140.
For $SPY, $QQQ, $SPX same applies.
Ie. $SPX 3900p<4000. Means take 3900 put expiring today/tomorrow when price breaks below 4000
What about gap ups and gap downs?
If a ticker gaps on the trigger price level, then that ticker is void for the day. Even if the ticker’s price comes back for a backtest, the trade is void unless specified on the watchlist directly. The levels are still valid, however, it invalidates the watchlist ticker.
Ie $AMZN 120c>115
It gaps to 118 premarket for the open. $AMZN is now void. Price comes down to 117.50, then goes back over 118. It’s possible the trigger will work, however, the watchlist trade is still void.
How do the results on the Watchlist work?
The option price is taken the moment the ticker price breaks the watchlist trigger price for entry. Exit is based on high after the trigger.
The option contract price must reach at least 20% gains before it’s considered a win.
For example, $NFLX 260c>250
Price breaks 250 at 10:03am, the 250c option price trades at $2.00 at that moment. Around 12:00, price hits $3.25 on the option. And that’s the high for the day.
That is a win giving a result of 63%
(3.25 exit minus 2.00 entry)/2.00 X 100 = 62.5%
What is #DinoAlert?
It’s a trade that I actually take in my own account. I try to alert in less than a minute. However, if you wait for my alert, you will rarely get as good as a fill. The same goes for exits.
All of the specific alerts have moved to the Discord Channel. If you would like to sign up and join our Discord Room, sign up with my Substack and then follow the directions in the welcome email:
Which ticker/trigger should I take?
Up to you! I can’t take all the trades most days. I have the watchlist set up so any trade can be taken. In other words, there is no “best trade” of the watchlist. If I put it on the watchlist, I’m willing to take the trade myself.
Most days, DinoAlerts will only come directly off the watchlist. However, there will be days I take more discretionary trades or something I may have missed for the Watchlist. Other examples include gap days, news event days, and massive move days.
I try and give as much notice ahead of time about what I’m watching and preparing to possibly enter. I want everyone to see what I’m looking at in the markets or specific ticker beforehand.
What about support/resistance plays on the watchlist?
These are more discretionary. They are set up the same as a simple break of the trigger level. Meaning if it triggers, it triggers for the results list no matter what. Even if the trade is completely going against the market, I still count it in the results.
Ok, so when do I take a support/resistance trade?
This is for more advanced traders as it’s not as black and white.
Ie $AAPL 150ish holds 155c
This means if the price comes down to the 150 area and holds, take the 155 call. It could come down to 150.37 or it could be 149.89.
But just because it pulls back to the trigger level it could keep going. Using the $AAPL example, you never know if 150 will actually hold. Maybe it heads to 147 and the trade is an immediate loser. This is where the overall market and more advanced trading come in. I’m trying to make the system and setups as mechanical as possible. Both for my own trading (I like a more mechanical style of trading) and for anyone following along to learn from what I do.
What is all the Commentary about?
Throughout the day I’ll give my input and what’s going on with the broader market as well as individual stocks. This doesn’t mean I’m trading something. Just observations, things that could possibly happen, and what to look out for as a few examples.
This is too confusing. Can you just tell me what ticker to take and how to trade it?
No! If you are following me. Learn from me. Just because I trade a certain way doesn’t mean you will like it or want to trade that way. I’m not here to give financial advice and trade your account. I’m here to teach you how I trade and how you can make money day trading.
I don’t care, I just want to make money!
No free lunch here homies. Go play the state lottery. I’m here to teach and coach. If you don’t want to put in the work and effort go do something else.
Do you follow other traders or copy their trades?
Levels are not rocket science. If you watch the traders who know what they are doing, we all have similar trigger levels and will be watching similar stocks and setups.
What do the colors and lines mean on the charts?
Purple is a minor support/resistance level.
Yellow is a major resistance level.
Upward/downward trend lines are typically dashed or dotted in white.
Do you look at technical shapes, like triangles, wedges, flags, etc?
Yes, but not exclusively. I try to line up support/resistance levels with trend lines and shapes.
How much money do I need to trade options?
If you are asking me this, I’m not the right person to follow. You need more education. I’m not here for green newbies that know next to nothing about stocks/options and trading in general. But, the way I trade, I go for runners and 50%. It’s hard to trade my style with an account less than $1000. You need multiple contracts to take profits systematically and have enough in the bank to size appropriately for different risk trades and markets.
Ok, I know some basics like what calls and puts are…can I still benefit from following you?
Maybe and maybe not. It’s up to you to do the deep dives on why I put a ticker on the watchlist and why I take the trades I do.
Lots of information. What do you suggest I focus on?
There’s no right answer and it’s different for every person. For me and how I trade, some things to learn
1. Basic Greeks: delta, gamma, theta, and volatility
The most important to understand is volatility. There is plenty of information out there on this both on Google and YouTube. Theta is very basic, but you need to have a general feel for price loss due to time decay. Lastly, Delta and gamma are intertwined. Understanding Delta, helps you to understand how an options price will move relative to the underlying stock (aka how much profit you could potentially make or lose)
2. Money management
What each trade’s risks are relative to the broader market. Is this trade a lotto, 1/4 size, 1/2 size, full size, etc? How to systematically take profits, etc
3. How support/resistance levels work
I may do a YouTube video or post down the road. Understand what happens when price hits a given support/resistance level both on individual tickers as well as the broader indices.
4. How to draw s/r levels
I draw lines very simply. Where price comes to a halt either going up or going down. If I make a YouTube video or separate post, I’ll include parts 3 and 4 since they are related.
Do I need to learn about broader macro stuff?
Yes, it’s important to learn about $SPX $QQQ levels. For options, it’s important to understand how market volatility works as well as implied volatility (IV) on individual tickers. You don’t need to be an economist, but understand news events, what the rest of the market is watching, what events can move the markets, etc.
For example, during the early days of Covid, all eyes were on the unemployment data and that’s what was moving the markets. For the past year plus, it’s been all about inflation and how the Fed responds to inflation with an interest rate hike and tightening. If you don’t know what any of that means, google it. Again, no need to learn PhD level economics, just understand what is being talked about.