For 25 years I had one answer to every chart question.
Yeah, I got flow.
I stood on the CBOE floor before I ever ran a volatility fund, and order flow told me where the money was going the whole time. I never felt like I needed anything else.
God’s honest, I never looked at this stuff.
Then somebody at my own firm showed me what flow cannot tell you, and I have been getting tutored ever since.
Moving averages, candles, support and resistance…the whole gambit.
I feel like I’m in my junior year of high school.
She asks one question before she will place a trade, and it kills most of the board before she gets to the chain.
In 25 years I had never asked it.
The question is whether the option can pay 100% on the move she just measured.
If the answer is no, there is no trade. Licia only takes trades with the possibility of a 100% move, and when nothing on the board qualifies she tells the room there is nothing there.
I had never once run that filter. My order was flow first, then an opinion, then whatever strike fit the opinion, which is backwards, and it took somebody at my own firm to show me that.
Her order goes charts first. She decides direction off support, resistance, trend lines and pitchforks before she looks at anything else. Only then does she pull the Tilt Scorecard.
The scorecard is the piece I built. It reads call volume against put volume and spits out a number, and around 3:30 it tells you which way the flow is leaning.
Since we added it to her process, the average win on that strategy went to 101%.
But it comes second, as confirmation of the chart and never as a substitute for it.
Then average true range, to figure out how far the name can travel by morning. Then the chain, and the 100% question, which is where most of the candidates die.
She pulled up IBM on the session and asked me what I was looking at. I told her there was a high wave doji a couple of days before the open.
Her answer: okay, now you’re showing off.
Eighteen months ago I could not have told you what a doji was.
The trades themselves are almost boring once the work is done. Buy late in the day when the option is at its cheapest, hold it overnight, sell into the morning gap.
She showed the decay math on Microsoft. A 490 put trading at $3 in the afternoon is worth somewhere under $2 by the next afternoon, so she waits.
The trades she pulled up. A gold play from $1.91 to $5.38, and IBM at a dollar and a quarter out at $2.40.
An XLF trade she paid 23 cents for that returned 113%, and an Apple put at 73 cents she sold at $1.93 the next morning.
Her members call the good mornings Christmas morning in that room.
None of which is the reason I signed up.
What put me in that class is 25 years of believing order flow was enough. It matters, and it was never the whole picture.
The mastermind runs six weeks starting August 17, twice a week after the close, plus a bonus week on single stock futures. Week five is position sizing, which is one of the three things that blow up retail accounts.
I will be in there with you asking questions, and I have no shame about it.
The replay is up now. You will watch her chart three live names from scratch, run the Tilt on each one, and land on the trades she would take, plus the four winners above walked start to finish.
If you have been trading off flow alone the way I was, that hour will bother you in a useful way.
Class starts Monday, August 17.
Your only option,
Mark Sebastian