The Challenge Rules
Simple. Efficient. Effective.
Our rulebook keeps us on track for success.
$3,000 Start
Each challenge begins with $3,000 in a live money, real time account.
Choose to Trade
TraderMinute trades its own account only. All subscribers choose whether or not to make the trade in their own personal accounts.
Trade Engine Signals
All trade signals are generated by our Trade Engine. The Trade Engine is our proprietary signal mechanism that looks for option friendly stock moves that put the reward to risk ratio in our favor.
Long Calls/Puts
All trades are either simple long call or long put options. We do not trade spreads, stocks, forex, futures, or crypto. The KISS method goes a long way!
Trigger Times
Trade signals trigger between 9:45am-10:30am ET and 2:15pm-3:15pm ET daily. Almost all entries and exits are made around this time.
Trade Allocation
Trade allocation (% of cash based the challenge's current value) is approximately 40% per trade, dropping to 30% per trade after $3,000 of gains.
Stops
No automated or preprogrammed stops are typically used. Preprogrammed exits will occasionally be used for profit taking. But exits happen in the 9:45am or 2:15pm ET trading windows (see above).
Options Expiration
The options chosen for each trade are typically 20-50 days until expiration using the closest at the money strike price.
ATR Method
All exits are based on the ATR Method. For more information on the ATR Method, check below.
Real Time Alerts
All trade entries and exits are sent out in real time via email. Each trade is also posted in real time on the Trade Seat during the trade windows at 9:45am-10:30am ET and 2:15pm-3:15pm ET.
Reward vs. Risk
Multiple trade entries/signals are sorted based on the best reward vs risk scenarios.
New Trades/Triggers
New trades are not entered unless cash is available. Current trades are not closed in order to accommodate new triggers.
Unique Circumstances
While all trade entries and exits follow the Playbook and Trade Engine, TraderMinute can step in under unique circumstances to change a trade.
Entry Exceptions
When a new signal is triggered and the option is more than 10% the norm, TraderMinute will at times wait 1 to 2 trading sessions in order to enter the trade.
Challenge Length
Each challenge typically goes for 90 to 150 days, based on market conditions and results, before resetting.
Make Money
Okay, so technically this isn't a rule, but you can sure as hell bet that it's what we play for!
The Trade Engine
How Trade Entries are Decided
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The Engine looks for stocks with a higher probability to trend.
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Stocks tend to trend 30% of the time. The Engine looks for the typical technical setup from past trends and signals when the setup is happening again.
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Most trade setups happen when a 3 day moving average crosses a 7 day moving average.
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The engine does not look for tops and bottoms but rather looks to follow trends.
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he engine uses a basket of 60 stocks that have a proven track record with the game engine. This basket of stocks is adjusted periodically as tendencies in the market change.
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On average, there are 5-7 new trades per month.
The ATR Method
How Trade Exits are Decided
The Average True Range (ATR) is a technical indicator developed by J. Welles Wilder in the 1970s. The indicator measures volatility by looking at the range of a stock over a selected period of time. The ATR exit method that we employ for each trade is based on the ATR indicator. This exit method, like all exit methods, is not perfect at calling tops and bottoms but it works great for the option trading we do here at TraderMinute.
There are 2 types of exits that we employ in the ATR method, price exits and time exits. Price exits are based on how the stock price moves while time exits guard against significant option price decay.
Price Stops
Based on stock price
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Sell a losing trade on a 1 ATR move in the stock from its entry point. If the stock has an ATR of 5 and the stock price goes from 300 to 295, we would look to exit the position with a loss and move on.
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Sell 40% of profitable trade on a 2 ATR move from entry. If the stock has an ATR of 5 and the stock price goes from 300 to 310, we would look to trim the position to lower the exposure and capture the gains.
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After profits are taken, profit and stop targets are reset based on the current ATR.
Time Stops
Based on the number of trading days the trade is held
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If the option price is red but has not triggered its stop 3 days after the trade entry, we look to take the position off the board and move one.
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After 5 days of holding the position if the price target is not reached we exit the position and take the gains.
To Put it Simply!
When a stock moves, the size of the move determines whether we exit or adjust the position. We also use time stops to keep from holding onto trades for too long.
But Don't Worry,
With every trade, price stops and time stops are defined immediately, while real time alerts are sent out for every exit.