Step 1: Identify slightly OTM calls, and slightly ITM puts, with > 14 DTE.
Step 2: Multiply call premium X 2 for spread size. i.e. premium of 11, x 2 = 22, round up, for a 25 point spread.
Multiply put premium X 3 for spread size. i.e. premium of 15, x 3 = 45, round up, for a 50 point spread.
Step 3: If flat: Establish iron butterfly using spreads from step 2.
Step 4: Exit 1 - Stop Loss at 1.3 times spread credit. (Taking 30% loss)
Exit 2 - Profit Target of .10 times spread credit. (Taking 90% profit)
Step 5: Re-Entry: Cross and close of 7 period moving average on 15 min bars, return to Step 1 to replace the closed spread. Model is almost always in market.
Video to implement these rules: https://zoom.us/recording/play/SAInQSEYVoOSnsmkc8hjWzws1E73jeIIwD9Wp-01VssVp1MBxLN05vrqyKEcek-y?autoplay=true
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