Code, llc ·1405
Fern St. No. 104
Julian Sebastian Juris Doctorate
author for option cycles on
Sebastian does a great job in sharing a time based cycle trading
strategy. I was surprised from this book I bought on Amazon and his . .
. videos he offers . . . had more valuable
information than in webinars I have paid over $299."
Ernest G. - verified Amazon review 4/20/16
does a good job explaining the cycle phenomenon and how it relates to
profitable equity option trading. Thanks for sharing this knowledge."
BCB500 - verified Amazon review 2/22/16
I liked the most is his forecasting ideas and how he shared the
specifics of his entry process. Making sure trades meet certain profit
criteria based on his forecast before he would consider taking the
Michael C. - verified Amazon review 12/26/15
have been a mostly value and dividend investing for 40 years. During
this time the Engineer in me has noticed the mean reverting nature of
markets. Julian presents a workable view which I am now incorporating
into my options trading strategies all be it with less risk. And less
potential reward. Perhaps as confidence builds, I may take more risk.
I highly recommend this work for any serious investor."
Michael B. - verified Amazon review 2/19/16
author begins with large amplitude cycles prediction which demonstrates
the huge regions for a stock to rise. Next, he develops the concept of
a cycle vector to explain the movement mathematically. The discussion
moves to a price trend which explains the dynamics of the price and
time of two trade bars."
Dr. Joseph F. - verified Hall Of Fame Amazon reviewer 1/11/16
excellent overview of trading options, well written especially for
those who have been intimidated by the concept of options trading.
Examples are clear and reflect objectivity by the author. I have been
trading options for a few years and have done okay, but can enhance
future trades with what I have learned from this book."
A. Edwards - verified Amazon review 1/13/16
not expecting to learn much, because I've been trading Options for 20+
years. I'm always looking for good systems. A lot of the books I've
read have been very basic and poorly written with very little for me to
learn at this point, but not this one. Julian is obviously not only a
good writer, but BRILLIANT Options trader beyond belief! WOW! Julian
has written an AWESOME book that shows not only the POWER of options to
get INCREDIBLE returns (not kidding), but also, and what I consider
more importantly, to manage risk. After all, it's not about how much
you make, it's about how much you keep. Julian shows BOTH! :)"
Jimmy H. - verified Amazon review 1/19/16
100%+ Option Trades
Sebastian, Juris Doctorate
© 2017 TheCycleCode.com. All rights reserved.
trade returns over 100% are
regularly possible in just a few
trading days. They require the formation of large amplitude
cycles in highly liquid option markets – a phenomenon
occurring regularly in most free-traded markets.
the following five steps to the SPY index in 2015 resulted in 7 trades
with an average
return of 179% with only two losses. Another 10
trades qualified in the TLT (i-Shares 20+
year U.S. Bond) in the same period, with half winning an average of
Here are the 5 steps to 100%+ option returns:
stock market has at least one dominate composite cycle unique to its
market fractal or
price-time period (e.g., a market’s daily, weekly,
monthly, or even intraday price-time chart).
stock market cycle is precisely calculated by the rules
developed by legendary 19th century cycle analyst W.D. Gann. They are
measured with diagonal lines (vectors) from cycle swing endpoints
– oscillating up and down.
When properly measured these
vector diagonal trend lines precisely measure and define long and short
trends within the cycle.
lines oscillating up and down create cycles. One
vector in one direction plus one vector in the opposite direction
equals one complete cycle – either measured from the high to
the low back to the next high making a “\/”, or
measured from a low to a high back to a second low making an
vectors contain two complete cycles both sharing the middle
vector in their individual cycle.
Gann has proven throughout his legendary career that cycles move
with amazing mathematical harmony to the point where they can be
regularly – and highly profitably – forecasted and
trades with options in highly liquid option markets make
regular, high-probability 100%+ trade returns possible.
RULES TO MEASURE AND DRAW VECTORS
to 19th Century cycle legend W.G. Gann, cycles have regularly
recurring mathematical harmonies when measured with nature-based time
charts. The daily bar chart is one natural time chart,
because it measures the entire price movement of a market for one
complete revolution of the Earth on its axis.
long as price bars continue to make higher highs and higher lows,
the trend is long. During a long vector, the trend continues
long as long as price does not make a (1) lower high and (2) a lower
low in the same price bar and (3) a close lower than the low of any bar
in the previous long trending vector.
same is true for short vectors/trends. A short trend
continues until price breaches the high of the previous price bar,
makes a higher low in the same price bar, and confirms (in the same
bar, or a subsequent bar) a close above any price bar in the entire
short trending vector.
these rules percicesly, the vectors may be drawn on the SPY
index for January, 2015 defining the first five cycles of 2015 in our
first chart, above.
you master the rules for tracing out cycle vectors and their
cycles, creating forecasts is pretty straightforward.
you, these cycles from swing extremes are all over
$7.50. That may only be about 3.5% of the SPY, but by trading
options you can leverage the change in price to over 300% using
weekly expiring option.
forecast any upcoming short vector, project the exact price-time
trend line between the last two cycle tops from the intervening swing
January, 2015 the first two cycle tops were made on 12/29/14 and
1/9/15. In the following chart the blue line is the
top-to-top trend line connecting these two tops. The
intervening cycle swing bottom between these two tops formed on
exact price-time trendline between these two cycle tops, moved
intact and projected from the first 2015 intervening swing
low produced the next short vector projection of exactly $196.31 on
soon as the second cycle swing top of 2015 was confirmed, we had an
exact forecast of how far in price, and how long in time, the upcoming
short vector would go.
forecast was able to be made as soon as the close of January 12,
2015 – the first time price made a lower high and a lower low
with a close below a bar of the previous long trend. While
the forecast overshot the price, it nailed the projected swing low date
down to the exact daily bar:
after the swing low of January 16th formed and reversed trend
(the 2nd swing low on the chart, above), we can forecast the next
upcoming long vector.
price-time trendline between the January 16th cycle swing low, and
the previous cycle swing low of January 6th equals .31 cents in eight
days or price-time bars.
can use charting software like FCharts (free, by spacejock.com) to
draw and drag trendlines. Or, you can just subtract .31 from
the intervening swing high of January 9th, 2015, ($206.42 –
.31); and add eight bars to arrive at our next long vector forecast of
$206.11 on January 22, 2015.
forecast was superb, as the cycle made a swing high on January 22,
2015 – the exact date of the forecast, with a price
just .15 above our forecast:
our next short vector for January 2015, we take the
difference between the high of January 22, 2015 ($206.26) and the
previous cycle high of January 9th, 2015 ($206.42) which is .16 cents
and, like the prior cycle (cycles commonly repeat in time and
there is a difference, again, of exactly 8 bars in time.
.16 cents from the intervening swing low of
January 16th, 2015, and adding 8 bars, gives us a short vector forecast
of exactly $198.39 on exactly January 29, 2015.
made its ultimate low
two days after our forecast exceeding our forecasted low by .83 cents
(in a swing high-to-low cycle price amplitude of $7.87 – the
forecast underestimated the cycle by just 10.5%):
final vector forecast example, and second forecasted long vector, is
exactly $205.57 on exactly February 5, 2015 – made, again, by
difference in price and time between the two last swing cycle lows and
projecting that difference on the intervening cycle swing high.
happening here is we are taking the last complete cycle and
projecting that exact
same price-time energy into the next forming cycle's vector.
form in such rhythm and harmony so as to make the projection more
accurate and dynamic than any other method I have ever
encountered. And the accuracies of the forecasts are truely
final forecast was another home run. Just one bar shy,
our forecast again sliced the tip off the swing high of February 6,
order to maximize profits and limit risk, only enter trades at a
time when the market is forecasted to change trend. That is,
only enter trades at a time when the-then current vector is forecasted
to end (within a bar or two).
enter trades when price opens inside the previous day’s
price range and then proceeds to tick past the previous day’s
price extreme in the new traded trend direction – a very good
and early signal of a change in trend.
a newly forming long trend to be traded, enter the trade when price
ticks past the extreme price high of the previous bar indicating a
change of trend at the timing withing the cycle's expected
forecasted change of trend.
a forecasted short vector trade, enter the trade when price ticks
past the previous bar’s extreme low price, as long as the
day’s price has not exceeded the previous bar’s
high price (in which case the current bar would be forming an
“engulfing bar pattern”).
maximize profits exit the trade in the earliest of the following two
reaches its forecasted price, or,
before price reaches its forecasted price, and you can exit with
any profit at all (don’t exit with a loss), then exit if and
when price ticks past the previous day’s price extreme in the
opposite direction than the expected traded trend direction (an early
high-risk reversal signal).
options are very volatile and and not good candidates for stop
losses – they lose and regain their value too quickly for
stop losses to be practical. Therefore, the expected return
trades must be commensurate with the risk of losing the capital
invested in each option trade.
your option trade losses are limited to 100% of the capital
invested, your wins have no such limitation and can and will provide
returns well past 100%, and, in some trades, many multiples of 100%.
order to gain a statistical long term trading advantage, only make
trades that have the forecasted opportunity to make a 150% gain in a
call or put option trade.
limit each trade to the same reasonable percentage of your
high-risk trading capital, e.g., 5-15%.
money management limits the amount of money you will trade
following any losses – but expands the amount of capital
traded following wins. This will exponentially grow your
trading capital smart and safely, while avoiding placing an inordinate
and unwise amount on any one trade. Never “double
down” on losses.