A Brief Document on How I (The
Market Bishop) Trade
DISCLAIMER
None of what I post is financial advice, this document is only how I personally trade and
my other posts on discord, youtube, twitter etc are ONLY my opinions, I am NOT a
Financial Advisor. Please ALWAYS manage risk according to your risk tolerance, as my
entries, trims and exits are according to my risk tolerance. My trade ideas/opinions are for
informational/entertainment purposes ONLY. I am not responsible for any of your losses or
gains.
Purpose
To provide members of Tailored Trades insight in how The Market Bishop (Kevin)
personally trades. This guide is so members viewing my trade ideas can understand what I
do when it primarily comes to my risk management strategy (sizing and so on). This guide
should also encourage you to come up with your personal trading strategy and add more
planning to each trade you take. This does not dive deep into any subject, especially my
personal trading strategy (in terms of what makes me enter)
● What I trade
○ I trade stock options (primary) and futures (secondary)
○ I mostly daytrade but have occasional swings
● How I learned to trade
○ I started trading over a decade ago
○ I started off by reading Richard Wyckoff books
○ After reading his books, most of my learning was done observing stocks via
charts
■ I found it more useful taking what I learned in books and understanding it
my way when looking it at charts
■ It resonates longer in my mind since I make sense of what I am seeing
instead of what someone else is seeing and trying to teach me
● The days I trade
○ I trade on everyday but Monday
○ This is because I like to personally wait and see what the week’s sentiment might
be and let for proper setups to occur for the rest of the week
○ I also do not trade on days where I do not see anything I do not like (I am patient
and do not force any trades)
○ I usually get into 1 to 3 trades each day
■ Monday I usually don't trade at all
■ Fridays I usually trade the most
● The times I trade
○ I try not to trade the open (9:30 am EST to 10 am EST)
■ I do not trade the open to avoid option volatility and indecisiveness of
sentiment in the starting 30 minutes
■ I rather wait for sentiment to show or a pattern to be displayed
○ I trade usually from 10am EST - 12pm EST and 1pm EST - 4pm EST
○ These times are just my usual activity, sometimes I do trade outside these times if
there is something I like
○ Again, I do not force trades so I don’t have the rush to be in a trade every hour I
am trading
● The broker & charting platform I use
○ I use Thinkorswim to daytrade and swing options
○ I use tradovate (ApexTraderFunding) for futures
○ I use either Tradingview or Thinkorswim for chart
● My trading strategy and indicators I use
○ I trade according to price action and volume
○ I do not use algos or most indicators
○ The following are the indicators I use
■ Regular volume
■ Volume profile
■ VWAP (Not always on or used)
■ RSI (Not always on or used)
○ I do not use algos or indicators as they are lagged (not current data)
○ I believe I can get everything I need to see by looking at price, and volume
○ I trade chart patterns (falling wedges, double bottoms, double H pattern)
○ I have a heavy use of trendlines (main part of my strategy) and also levels
(comprised of daily and weekly levels)
● How I size my entry position
○ I look to always start with a starter position
○ This means I always take a smaller position than my general size incase I need to
average down
○ The more capital there is, the more flexibility there is in deciding your starter
position
○ For example (using numbers and capital numbers people usually deal with):
■ Let’s say I am looking at TSLA 200 Calls that cost $2.50 per contract
■ Taking my risk tolerance and my financial situation into perspective, I
decide that I am comfortable putting $6,000 total into a single trade
■ My starter position would be 10 contracts at $2.50, which would be an
initial investment of $2,500
● When, how, and why I average down
○ I average down only when I see a reversal in the direction I want
■ Example: If I am in calls that are currently down, I will wait for the price
to reach a trendline or level I am looking at to possibly average down
○ I NEVER average down just because the contracts are down a certain $ or %
amount
○ How I average down is by adding 2 or 3 times the size of my current position
○ For example (using the numbers from the starting position example):
■ My starter position would be 10 contracts at $2.50, which would be an
initial investment of $2,500
■ My calls then decrease in value to the value of $1.50 where I buy 20
contracts
■ My average fill for the entire position is now down to $1.83
■ This would be an additional $3,000 added to my investment into the
position
■ I still remain below $6,000 for the overall investment capital
○ Why I average down is because I start of with a starter position, which provides
me the cushion to average down
○ KEEP IN MIND - Averaging down IS RISKY as you are adding onto a losing
position and increasing your loss potential. In my experience, if done correctly it
has shown me many instances of climbing a position out of a loss and into
potentially more profits. Nothing is guaranteed
○ When and if the trade starts going my way, the average down position starts
outweighing the losses from the original position
● How I trim
○ By the time the contracts hit 20-40% profit I am usually out of the majority of my
position
○ By trimming positions at different profit levels I can lock in gains progressively,
reducing risk while maintaining exposure to further potential upside (runners)
○ For example (using the numbers from the starting position):
■ I get into 10 contracts of TSLA 200 Calls that cost $2.50 each
■ At 10% profit I would trim 2 cons
■ At 20% profit I would trim 2 cons
■ At 30% profit I would trim 3 cons
■ At 40% profit I would trim 2 cons
○ Different people have different financial situations which will lead them to have
different risk management strategies.
■ Always go according to your risk tolerance/management
● How I hold runners
○ Runners are an important part of my personal risk strategy
■ I like holding them to give the possibility of increased profits while not
risking much
■ Remember that holding runners increases the possibility to decrease
profits or even bring your position negative
○ To decrease the risk that runners bring, I only leave a small % of my position as
runners
○ For example (using the numbers from the starting position):
■ I get into 10 contracts of TSLA 200 Calls that cost $2.50 each
■ At 10% profit I would trim 2 cons
■ At 20% profit I would trim 2 cons
■ At 30% profit I would trim 3 cons
■ At 40% profit I would trim 2 cons
■ This would leave 1 contract that I can hold risk free
○ The risk free contract(s) is basically contract(s) that I can hold without worrying
about those contract negating my previous trimmed profits
○ This is a more passive approach to holding runners; a more aggressive approach is
just trying to hold more contracts as runners
○ The amount of runners I hold (the % of my original position) is fluid and
dependent on a few factors:
■ The type of trade I am in
● If it is a daytrade, I hold less runners
● If it is a swing, I hold more runners
■ How confident I am in the trade
● Whether I classify the trade as risky or less risky
■ How my week or day has gone
● If I have experienced any losses from previous trades within the
week or day, I tend to size smaller to control emotions
● When I exit a trade
○ I do not use hard stop losses
○ I exit a trade if it fits into one of these categories:
■ The sentiment that I had for the trade gets invalidated by the chart
■ If I find volume/momentum dying down
■ If an important trendline/level gets violently invalidated
■ If I need to step away and I cannot actively manage the position in some
capacity
■ If I find myself experiencing emotions (greed and/or hesitation)
○ I find myself more successful avoiding the use of stop losses and going by the
invalidation of the setup I am trading
○ This method does put more risk on each trade I take
■ I am okay with that as it has worked for me personally for years