I have been following a 0 DTE put spread strategy using SPX - targeting roughly $200-250 in profit every day.
I don't use any technical indicators other than looking at gap ups/gap downs and support/resistance.
I typically wait for a reasonably large gap down before opening my trade, typically I target four $.70 contracts. Depending on how quickly the trade goes my way I will close early for profit around $.10-$.15. Sometimes I'm able to close at $.05. I never hold until expiration. I try to close before the afternoon because of gamma exposure.
The problem I'm having is on days like today where things just got out of control. I opened $7445/$7435 spread when SPX was trading at $7505. I thought a 60 point spread was unlikely to actually become ITM, especially after gapping down from yesterday at open.
I realized my mistake was not selling when an hour after opening the trade, I could've closed at $.20 when SPX was trading at $7520. Instead I waited until it dropped far too much, and then kept waiting for a relief rally that never came. I took a several thousand dollar loss.
Is this lesson learned here twofold: take profit if it comes early and forget whatever you didn't get to realize (in my case the $.20 per contract), and to actually set a hard stop loss because I wasn't able to pull out until it was too late?