2025 Trading Alert Strategy Guide for Beginners
I asked Chat GPT to make a strategy guide for beginners based on my alerts in 2024. here is what it generated
1. Start Small and Focus on Risk Management
# Example Position Sizing Rule
account_size = 10000
max_risk_percent = 0.02 # 2% max risk per trade
max_position_size = account_size * max_risk_percent
# Example:
# If alert shows SPX option at $2.00
# Maximum contracts = (max_position_size / (option_price * 100))
# $200 / ($2.00 * 100) = 1 contract2. Entry Strategy
Wait for confirmation after alert
Look for these specific setups:
Small dollar entries ($0.20-$3.00 range)
High liquidity options (SPX, NVDA, TSLA)
After first hour of trading (10:30 AM EST)
Clear support/resistance levels
3. Exit Rules
1. Take Profits Early
First target: 50-100% gain
Scale out in portions
Don't wait for massive gains shown in alert history until you learn how we plan and trade
Stop Loss Discipline
Entry Price: $1.00
Stop Loss: -30% ($0.70)
First Target: 100% ($2)
Runner Target: 200% ($3.00)
**. The purpose is to initially build confidence by building a foundation of wins and good entries as well as stopping out when wrong. REMEMBER the initial entry should be on a dip in price, not a chase entry. Chase entries require a 70-50% stop…
4. Best Practices from Alert Data
DO:
Focus on SPX options first
Highest win rate in alerts
Most consistent gains
Best liquidity
Trade During Prime Hours
10:00-11:30 AM EST
3:00-4:00 PM EST
Avoid lunch hour (12:00-1:00 PM EST)
Use Small Position Sizes
1-2 contracts maximum when starting
Increase size only after consistent profits
DON'T:
Chase After Big Moves
Many 1000%+ gains started small
Wait for next setup instead
Over-trade
Limit to 2-3 trades per day maximum
Quality over quantity
Hold Overnight
Alerts show best results on intraday trades
Reduce overnight risk exposure
5. Trading Plan Template
Pre-Trade Checklist:
□ Market direction aligned with alert?
□ Position size within risk limits?
□ Clear exit strategy (profit/loss)?
□ Trading during optimal hours?
□ Not chasing after big move?
Trade Management:
1. Enter only if getting similar price to alert
2. Set stop loss immediately
3. Scale out at predetermined targets
4. Move stop to breakeven after first target
5. Let runner work with house money
** Use Edge To help you plan your trades!
6. Key Performance Metrics to Track
# Trading Journal Fields
trade_metrics = {
'date': None,
'symbol': None,
'entry_price': 0.0,
'exit_price': 0.0,
'contracts': 0,
'profit_loss': 0.0,
'hold_time': 0,
'alert_followed': True/False,
'setup_type': None,
'notes': ''
}7. Monthly Goals for Beginners
Month 1-2:
Focus on paper trading
Track all alerts without trading
Build trading journal
Month 3-4:
Small live trades (1 contract)
Focus on SPX only
Strict risk management
Month 5-6:
Increase size gradually
Add 1-2 more tickers
Review performance metrics
Risk Warning
Remember:
- Alerts show potential, not guaranteed returns
- Many winning trades require quick decisions
- Never risk more than you can afford to lose
- Build experience gradually
- Focus on process over profits initially