Macro-to-Micro Strategic Technical Analyst and Options Trader Discusses Trading Outliers with Velocity

We brought in options trader Samantha LaDuc to discuss how price leads all, position sizing, timeframes, and more!

Samantha LaDuc, founder of LaDuc Capital LLC, is a Macro-to-Micro strategic technical analyst, educator and trader. She grew a small technology company (family of 60) for 10 years before selling it and has been actively trading and investing since 2008. Samantha has a unique perspective in scanning/synthesizing what will move, why it is moving and how to trade it with risk-defined options. She specializes in outliers with velocity–on any timeframe. With a chart pattern and volatility focus, she advises day traders through asset managers. Her mentoring helps clients “fill in the gaps” between guessing and knowing when to enter and exit an options or equity trade based on macro, value, sentiment, inter-market and technical analysis. Since process and performance matter, she details both for members with Real-Time Portfolio Tracking via SMS/Email/Web. She even provides non-members a look at Closed Trades! You can find her Fishing for Intraday and Swing Trades while providing Risk Management Trade Set-Ups and Mentoring in her LIVE Trading Room, Trade Alerts and Gone Fishing Newsletter at LaDucTrading.com.

Great to have you! Can you explain more about what outliers in velocity means? How do you stay consistent in your approach? — michaelbozzello

“Outliers with Velocity Revert” is a saying I like to say that refers to extremely oversold + overbought stock. For example, XLP is at 28 yr low + 10% YTD. So many plays in here we like past 2+wks. $CPB $PEP +++ Can see a few of the plays we have closed here: laductrading.com/review-the… $HOG $AGN… $NVS hasn’t fired yet, etc.

What are the main indicators you look at in your strategies? Moving averages, support/resistance, RSI, etc? — RonTurkey1

Hi Ron, I love indicators, creating indicators, but I rarely rely on indicators. I equate them to counting cards… In counting cards if 3 out of 5 align, I have an edge. Less = no edge. I scan technical indicators but don’t rely on I use basic stochastic mostly but only at extremes, crossing over across W/D/H chart. Grandparent/Parent/Child. I’m crazy for UOA but ONLY on those stocks I have already identified an edge/pattern/volatility event. UOA = Unusual Option Activity and only when in my favor/direction, of size, preferably further out in time. With UOA, the need for Delta Hedging by market makers is the real wind in the sails.

Which indicators do you rely on most? — chaikin

Just answered that one I hope. But let’s back up: I’m a Macro-to-Micro analyst, educator+trader. Indicators are secondary! By that, I follow macro economic/policy news for Big Picture then Intermarket analysis for relative strength/weakness. I am interested in fundamentals to identify value, but believe price leads. I’m only interested in sentiment at extremes. Technical Analysis is that which provide the LRE — low risk entry/exit by which to enter/exit a position. #ExitsMatter

I’m interested in how you allocate among the timeframes and in how you choose to adjust time vs close a position. — bearcharts

First, I am obsessed with timeframe congruence. I always have Hrly/Daily/Week charts up with UOA flow on the side. As for how I allocate timeframe to trading? Chases (1–3 Days employing options 1–3 weeks out) Swings (1–3 Weeks employing options 1–3 months out) Trends (1–3 Months employing options 3–6 months out) Whenever anyone asks me about a stock, I always ask WHAT’S YOUR TIMEFRAME? Some Chase Swing Trend trade — I do all three.

When is AMD going to hit 20$? — sebciooo

$AMD is big deal in that it’s both a momo future growth stock+sentiment play on mkt. Measured move is $27 if stays>$15.

Will the Vix be higher or lower in 3 month and why? — FamisDave

No idea. I say higher simply from seasonal effect, exogenous event, Eurozone weakness, other-but really have no idea!

What’s your favorite chart pattern right now? — scheplick

Stefan! Good question because they change from Yr to Yr. I have my favorites: morning star reversals, cradle formations — on WK especially. And the Scoop… Those are candlestick patterns + apply on any timeframe. Favorite technical pattern is descending/ascending triangle, H&S + wedges. Want some examples?

$JD trendline BO on Wk with PT shown w arrows. UOA was The Tell to stay IN. Large + Busy + ITM.

$NVS has the look but early… But I’m in just in case ;-) $JNJ

$P is a perfect cradle. See Wkly chart: Big expansion bar down, consolidation, expect big expansion bar up. $PI same.

$VKTX perfect example of scoop pattern on Wk. Went up 100% from BO. Again, these patterns happen on ALL TIMEFRAMES!

What do you think of the the VIX futures curve as an indicator of future market direction? — patrickrooney

I don’t. I’m a volatility trader but I rely on tech analysis of $VXX $VVIX $VXV $ZIV + my Stock-Bond-Vol Ratio.

Why do you believe that price leads fundamentals? — Jayhead13

Fundamental analysis is but a tool in the toolbox. It’s great to understand structure of company, but only price pays.

What was your worst trade ever? Was it within risk tolerance you’ve set? How did you recover from it? — saadey

Great question— hate it — but great question! Recent worst trade $RH sold straddle EPS 6/2017+lost 10X by not following plan on exit. I took the loss + went back to work. NEXT! I’m nothing if not determined. Stupid is as stupid does. #LearningPlanet

How do you manage a losing credit & debit trade — roll or eat the loss?? What is your trading plan? — Ro_Patel

I don’t do credit spreads. For debit spreads I base the exit on underlying price; exit is based on stop/profit target. Here is an overview of my trading plan: Samantha’s ‘Rules of Engagement’ for Trading Options laductrading.com/captain/le…

Typical position (moneyness, DTE, etc) for a option swing trade? Directional or are you playing Vol? — HeyShoe

I am very strong on Direction + Volatility so I use directional options mostly, call spreads for gradual price moves. Financed call spreads for Trends, meaning, set it and forget it CS financed by selling puts further out in time. As for position size, 1–3% of available equity. Love Swing Trading Break-outs, Trend Reversals, + Bottom Fishing.

Can you give us a little insight into your scanning parameters? — rahagar

Scanning: Every morning I scan market-moving news, macro matters, stocks of interest in news + post Market Thoughts. These are my Top Chase + Swing Ideas until the market opens + I can see how they trade. I use news flow intraday + TWTR I have built many scans but don’t need them. I know what to scan for because I know what’s moving + why + how to trade it. I also follow Unusual Option Activity with @WallStJesus. This guy/product is outstanding BUT you need to know how to use.

How important are paid-for services like sophisticated scanners to finding an edge and great trades? — Nev17

I have no use for them but I know others who like them. I already have plan going into the day/don’t need the distraction Personal Preference. I am scanning + synthesizing MUCH — as much interests me + clients want customization. You do you!

When you go into a trade do you take the mid range to the bid/ask or do you ‘veer’ to one side or the other? — NMNeil

Mid. I trade A LOT so I want to focus on the next one not the fill. Basically I am a very sloppy trader but still good;)

What are some of the recent SAAS IPO”s that you think are good investment? — madawg

My fave right now is $SPOT — scarcity drives price play — not much stock issued so likely higher but most IPOs I avoid.

Since you use outliers in velocity what levels in IV/vega are you looking for & how do you scan for this? — OffbeatOperator

I don’t use Vega — I know right? But I do care about IV for buying/selling + it’s affect on theoretical pricing.

Hello Samantha! As someone who is new to options trading I am trading mostly calls. Any tips for young options traders? — Fartsncharts

Paper Trade a goooooood long time. Take courses. Read books. Find a mentor. Don’t give up. Trading is Hard Work!

How do you manage risk in binary events with a massive decrease in IV after the event? Thanks for the Q&A! — AKeats

I am the exception I think: I care about the winers MUCH more than losers — I use position size can afford to lose.

Whats your favorite options play for the next few days, weeks? — GappingAround

My bet: market weakens post Quad-witching so already legged into shorts in $MU $DIA yday but adding long value and $DXY is at major inflection point, likely reversing very soon: $UUP $FXE

Does it ever make sense to roll forward an ITM long call contract prior to exp? If so, when would it make sense? — drmutz

When it’s profitable and your thesis for being in the trade still applies!

Is it worth learning Options at 14 years old? — Justin126

If you’re not afraid to do the work. Financial literacy is important at any age. But you could also just enjoy life..

We hope you enjoyed this Q&A! Press the 👏 below if you really liked it and feel free to highlight or comment on any part. We also have a newsletter for anyone interested in getting daily updates about the stock market.

I am the Director of Community for StockTwits. Follow me @michaelbozzello.