Books

http://www.r-5.org/files/books/trading/charts/market-profile/James_Dalton-Markets_in_Profile-EN.pdf

Strategies

SPREADS

Vertical spreads

A vertical spread consists of equal units of long and short options at different
strikes. If the long strike is lower than the short strike, it is considered a bullish
vertical. If the long strike is higher than the short strike, it is a bearish vertical.

The key aspects of the vertical trade are 1) directionality (the trade maintains a
correlation and sensitivity to price movement) and 2) regional leverage.


Butterfly 

A butterfly consists of a long vertical and short vertical spread with the long
strikes outside (above and below) the short strikes. Typical “fly” has two short
units at the same strike. Example: +1 50C/-2 55C/+1 60C.

The key aspects of the butterfly are 1) fixed risk and 2) neutrality over a price zone (in Greek terminology, “theta positive”).


Ratio spreads

Ratio spreads are simply verticals with at least one additional short unit. The
most common form is a one by two spread such as +1 50C/-2 55C. Ratio trades
are the ultimate defense against a losing position. The key aspects of ratio
spreads are 1) cost reduction and 2) risk displacement.

Technical Indicators

Trend detective indicators:
        Moving Average systems,
        Bollinger Bands,
       parabolic SAR,
       Commodity Channel Index,
       ZigZag

• Oscillation indicators:
      MACD,
      RSI,
      RVI,
      Stochastic Oscillator,
      William’s percent range

• Volume indicators:
       Volumes,
        On balance volume,
         Accumulation,
         Distribution



1—SMA. Helps determine if the stock is in a bullish trend or bearish trend. As well as to setup support and resistance level.
2—MACD. Used to help confirm a trend and where in the trend a stock might be.
   It reveals strength , direction, momentum and duration of the trend
3—Stochastics. Helps determine the momentum behind the current position in the trend.