My current strategy is day trading SPX 0 DTE Long Butterfly spreads by using a confluence of technical indicators, such as VWAP, Volume Profile, GEX levels, Support/Resistance, RSI, MACD, VIX, and Max Pain (slight consideration).
Here are some details:
Logic - positive theta as opposed to buying naked long options or debit spreads.
Set up - risk to reward ratio of 1:4 or better.
Entry - usually one of the wings set ATM to capture the price moving in towards the body strike.
Target profit - 20-50% of debit paid.
Stop loss - *grey area*
During trading days where price does not pan out, I struggle with a clear exit strategy due to emotions and stubbornness that the trade will work out, given more time. And when I do wave the white flag and exit (usually at almost a total loss in debit), I tend to revenge trade on emotions, hoping to reduce my losses or scratch out a small win (I know, a big no-no).
Does anyone else day trade this strategy?
I'd like to learn more about your execution strategy on entry and more importantly, on exit.