A Simple To Learn Nvidia Options Strategy – 4 rules High Win Rate guide

Navigating the world of options trading can be challenging, but with the right strategy, you can achieve impressive results. This guide introduces a powerful Nvidia options strategy that is not only simple to learn but also boasts a high win rate. Whether you’re a novice trader or an experienced market participant, this strategy provides clear, actionable steps to enhance your trading success.

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In this article, we will delve into the specifics of the Nvidia options strategy, explore the key components that make it effective, and provide practical tips to help you implement it with confidence. Let’s unlock the potential of Nvidia options trading together.

We like to call it the daily double strategy.

NVDA stock is one of the largest and most popular stocks to trade in the world.

NVIDIA Corporation (NVDA) has grown to become one of the largest market cap stocks in the world, thanks to its leadership in the technology and semiconductor industry. Here are some key points that highlight why NVDA is a significant player in the market:

• Leadership in AI and GPUs: NVIDIA is a pioneer in the development of graphics processing units (GPUs), which are essential for gaming, professional visualization, data centers, and AI (artificial intelligence). Its GPUs are widely recognized for their performance and are the go-to choice for many industries.
• Data Center Expansion: NVIDIA’s data center business has been expanding rapidly, driven by the increasing demand for AI and machine learning applications. The company’s GPUs are used in a variety of data center workloads, including training AI models, inferencing, and high-performance computing.
• Acquisitions and Partnerships: NVIDIA has made strategic acquisitions to bolster its position in the market. For instance, its acquisition of Mellanox Technologies has strengthened its data center offerings. Partnerships with leading technology companies also enhance its market presence and innovation capabilities.
• Gaming Industry Dominance: NVIDIA’s GPUs are a dominant force in the gaming industry. The company’s GeForce series is highly popular among gamers, and its technologies like ray tracing and DLSS (Deep Learning Super Sampling) have set new standards for gaming graphics.
• Automotive Sector: NVIDIA is also making strides in the automotive sector with its DRIVE platform, which provides AI-powered solutions for autonomous vehicles and advanced driver-assistance systems (ADAS). This segment has significant growth potential as the automotive industry moves towards greater automation.
• Financial Performance: NVDA has consistently delivered strong financial results, with impressive revenue growth and profitability. Its robust financial performance has contributed to its high market capitalization, making it one of the most valuable companies globally.
• Innovation and R&D: NVIDIA is committed to innovation and invests heavily in research and development. This focus on R&D ensures that the company remains at the forefront of technological advancements, enabling it to maintain its competitive edge.

Okay, lets get right into the strategy!

If you have followed our blog at all, you know we like to keep things simple.

So, we will keep this strategy as simple as possible and we will give you everything you need to know to start trading this stock today.

The Nvidia Options Strategy – Tools Needed

You will only need a few things to trade the Nvidia options strategy.

Here is a brief list of tools

• A Trading Platform, we Prefer Robinhood or Webull
• Two Exponential Moving Averages (We will get into what input you need for each)

The Nvidia Options Chart Setup

Okay lets dive in and get your chart setup for the strategy.

You need to go to the daily time frame on the chart.

The ticker for Nvidia is: $NVDA.

In this example, we will use Webull as the charting platform, but you can use any charting platform you prefer.

So go ahead and open up Webull and at the very top go to the search bar and type in “NVDA” and click on the stock.

Now since you have NVDA up on your chart, it is time to add the indicators.

Add the indicators by clicking on the symbol on the left and then click EMA.

Now go into the settings.

We need two EMA indicators on the chart.

• EMA 5 (Red)
• EMA 15 (Green)

Here is what I will look like on the chart:

Nvidia Options Strategy Rules

The Nvidia options strategy has 3 simple rules.

In this example, we will be looking for a “long” trade. So we will be looking to buy the stock or buy a call at the triggered signal.

Nvidia Options Strategy Rule #1: The red 5 EMA must cross above the green 15 EMA

Sounds simple enough, right?

Let’s look at it on the chart!

Remember, we are only looking at the daily time frame.

This Nvidia options strategy works best on the daily chart.

Once you get a cross above this is the first sign that NVDA is going on.

All we need now is a confirmation.

Nvidia Options Strategy Rule #2: Confirmation candle

Since this is a good sign that a move up is potentially coming we need that final confirmation to get in.

So you wait for a confirmation candle.

This is done by getting in only when the entire candle is above both the EMA 5 (Red) and EMA 15 (Green)

Take a look at the chart above.

The candle is still touching the RED moving average so we need to wait another day for confirmation.

The very next day it opened above both moving averages so that is our confirmation candle!

You get in right at the start of the market open. So at 9:30 AM ET. This is when you would enter on that day.

You aren’t looking for any other thing on lower time frames, we are going for a long term move, so minor support and resistance on lower time frames is not going to be a big factor.

Nvidia Options Strategy Rule #3: Pick Your Option

This is a longer term strategy, so you do not want to pick an Option on the chain that is anywhere less than 90 days out.

So with this strategy we recommend you choose from 90-120 days out Option at or near the money.

For this example it could have been 99 days out.

Nvidia Strategy Rule #4: Stop loss and Exit conditions

The exit is simple.

You exit the trade when the price closes below both moving averages or when the moving averages cross over.

So, for our example, the trade entry was 1/9/24 and the exit was 2/21/24.

That was a 43 day trade.

That was a total move of 29%! Which would have been a massive payout with the Option.

Not a bad trade.

Use this same condition for your stop loss.

If price closes below both moving averages, you get out no matter what. Or, if the moving averages cross back over, this could be a sign that there is some choppy days ahead, so you get out in that case as well.

Take a look at this chart:

You would have gotten out of this trade 3 days after entry because of the cross over.

Never stay in trades of the market is choppy.

Other examples of this profitable nvidia options system

Lets use the start of the year 2024 for an example.

Our first example was a winner from 1/9/24 to 2/21/24.

The next trade would have been immediately after the first trade.

So on 2/22/24 there was another BUY signal when the price closed above both moving averages.

The exit would have taken place when the Moving Averages crossed over.

This is an exit condition, indicating where you should close your position.

Once you exit, you can trade both to the downside and upside.

Just make sure you follow the rules! The candle must ALWAYS close outside of both moving averages to signal an entry.

Nvidia Price today

To see what Nvidia is doing today, head on over to Tradingview and check it out!

Video Guide For This Nvidia Options Trading Strategy

Go ahead and watch our video guide here!

Conclusion to the best NVDA Options Strategy

Our NVDA trading strategy, which leverages two moving averages on the daily chart, has demonstrated exceptional performance. This method has proven to be both reliable and profitable, allowing traders to capitalize on market trends with confidence.

Key Takeaways

• Consistency and Reliability: The strategy has shown consistent results, effectively capturing significant price movements and reducing exposure to market noise. The use of moving averages helps smooth out price action, providing clear signals for entry and exit points.
• Trend Identification: By employing two moving averages, we can accurately identify the prevailing trend. This dual moving average approach filters out false signals and ensures we align our trades with the market direction, maximizing profit potential.
• Simplicity and Effectiveness: The strategy’s simplicity is one of its greatest strengths. Traders can easily implement it without the need for complex indicators or systems. Despite its simplicity, it remains highly effective in generating profitable trades.
• Risk Management: The strategy inherently includes risk management principles by adhering to the moving averages. It prevents emotional trading decisions and ensures that trades are only taken when there is a high probability of success.

Performance Highlights

• High Success Rate: The strategy has consistently outperformed the market, with a high percentage of winning trades.
• Robust Backtesting: Historical data analysis confirms the strategy’s effectiveness across various market conditions.
• Adaptability: The moving average strategy is versatile and can be adjusted to suit different trading styles and market environments.

Final Thoughts

Our NVDA trading strategy, utilizing two moving averages on the daily chart, is a powerful tool for traders seeking consistent and substantial returns. Its ability to accurately identify trends, coupled with its simplicity and robust performance, makes it an indispensable part of any trader’s toolkit. As we continue to monitor and refine this strategy, we remain confident in its ability to deliver outstanding results in the dynamic world of trading.