The Best Procedure for Option Trading (in My Opinion)

Before executing an option trade, here's the procedure I always follow to ensure I'm making informed decisions: 1. Check Price Action Around Support and Resistance Always observe where the price is—near support or resistance levels. 2. Analyze Open Interest (OI) Data Look at the OI data around those support/resistance levels to gauge market sentiment. This helps me decide whether the price might respect or break those levels. 3. Identify Chart or Candle Patterns Check for any chart or candlestick patterns forming. This can give insights into potential price movement. 4. Use Indicators (e.g., MACD,RSI) I sometimes check indicators like MACD (or any others I prefer) to further confirm my decision. 5. Wait for Retests After a Break If support or resistance is broken, always wait for a retest. Retests give better confirmation before entering a trade. 6. Draw Support and Resistance Properly Make sure you accurately draw your support and resistance levels based on past data. Properly identifying these levels is key to your success.