ABSTRACT

The 0-DTE Trading Manual provides a

comprehensive guide to two strategies - Zero
Days Classic Fly and Zero Days Batman - that use
OTM butterfly options for market-neutral trading.
The manual includes daily and weekly processes,
strategy selection, journaling, and review
practices for consistent and low-risk profits.

Ernie Varitimos
[Course title]

0-DTE TRADER'S
MANUAL
Strategy, Methods & Process
Table of Contents
INTRODUCTION 3

SETTING YOUR EXPECTATIONS CORRECTLY 3

THIS IS YOUR EDGE: 3
OVERVIEW OF THE 0-DTE OPTION STRATEGY OF CHOICE 4
WHICH UNDERLYING ASSET TO USE 4
DIFFERENCES AND CONSIDERATIONS OF ASSET TYPES 5
EXPLANATION OF THE STRATEGIES 6

PRINCIPLES AND PHILOSOPHY 9

0-DTE TRADER’S MANIFESTO 9

CLASSIC FLY STRATEGY 10

THE 10% DEBIT RULE 10

STRATEGY OVERVIEW 10
CLASSIC ENTRY DETAILS 11
CLASSIC PROFIT MANAGEMENT 11
CLASSIC RISK MANAGEMENT 12

BATMAN STRATEGY 14

STRATEGY DETAILS 14
STRATEGY SET-UP 14
PROFIT MANAGEMENT 14
BATMAN RISK MANAGEMENT 14
PROFIT MANAGEMENT FRAMEWORK 16
RISK MANAGEMENT 17
IMPLIED VOLATILITY TIMING 18
CONCLUSION 18

STRATEGY SELECTION 19

CLASSIC FLY STRATEGY 19

BATMAN STRATEGY 19
CHOOSING BETWEEN STRATEGIES 19

THE DAILY PROCESS 20

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STEP 1: PRE-MARKET PREPARATION 20
STEP 2: ENTERING THE TRADE 20
STEP 3: MONITORING THE TRADE 21
STEP 4: EXIT THE TRADE 21
STEP 5: REVIEW THE TRADE 21
CONCLUSION 21

THE WEEKLY RETROSPECTIVE 22

STEP 1: REVIEW THE JOURNAL ENTRIES 22

STEP 2: IDENTITY TRENDS AND PATTERNS 22
STEP 3: DEVELOP ACTION PLANS 22
STEP 4: REFLECT ON THE PROCESS 22
TIPS FOR MAKING THE MOST OF THE RETROSPECTIVE: 22
CONCLUSION: 23

POSITION SIZING STRATEGY 24

INTRODUCTION 24
THE FIXED FRACTIONAL COMPONENT 24
THE RISK-BASED COMPONENT 24
THE COMBINATION OF FIXED FRACTIONAL AND RISK-BASED POSITION SIZING 25
DETECTION AND RESPONSE TO LONGER-THAN-NORMAL DRAWDOWNS 25
MINIMUM ACCOUNT SIZE 25
PATTERN DAY TRADER RULE 25
CONCLUSION 26

VOLUME PROFILE 27

INTRODUCTION TO VOLUME PROFILE ANALYSIS FOR TRADING 27

WHAT IS A VOLUME PROFILE? 27
MARKET MEMORY AND MARKET STRUCTURE 28
VOLUME NODES AND VOLUME WELLS 28
USING MARKET STRUCTURE TO ANALYZE FUTURE PRICE MOVEMENTS 28
PRICE BEHAVIORAL ANALYSIS 30
RECOMMENDED VOLUME PROFILE TOOL 30
CONCLUSION 30

TRADER’S MINDSET 31

EMOTIONAL CONTROL 31
MENTAL PREPARATION 31
SELF-AWARENESS 31
POSITIVE REINFORCEMENT 32
MINDFULNESS 32

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THE ZEN CIRCLE 32
TRADERS MINDSET EXERCISES 33
EMOTIONAL CONTROL 33
MENTAL PREPARATION 33
SELF-AWARENESS 34
POSITIVE REINFORCEMENT 34
MINDFULNESS 34

HEALTH AND WELLNESS 35

SUGGESTED MORNING ROUTINE 36

COMBAT CONDITIONING FOR EVERYONE 36
STARTER PROGRAM 37

TRADER MANUAL CONCLUSION 39

A. SUMMARY OF THE STRATEGIES 39

B. FINAL THOUGHTS ON THE IMPORTANCE OF THE JOURNALING AND REVIEW PROCESS 39

APPENDIX 40

A. GLOSSARY OF TERMS 40
B. EXAMPLE JOURNAL ENTRIES 40
C. PLAYBOOK OF BEST EXAMPLE TRADES 41
D. REVIEW FORMS AND CHECKLISTS 41

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Introduction

Welcome to the Zero Days Options Trading Manual, where you will learn two powerful options
trading strategies – the Zero Days Classic Fly and the Zero Days Batman. You will also learn the
0-DTE professional trader’s process from end to end.

This manual has been designed to be both a strategic guide and technical reference to help you
gain a deep understanding of our strategies, methods, and processes, as well as a deep
understanding of options trading.

The mission of 0-DTE and Coach Ernie is to show you how to become an
independent, consistently profitable, professional-level trader.

Setting Your Expectations Correctly

Should you expect that after reading this manual, you will be transformed into an independent,
consistently profitable, professional-level trader? Not! However, if you internalize the process,
practice the fundamentals, and commit to making this part of you, the odds of achieving these
goals are incredibly high.

Achieving these goals is not an end game but a path or way. The achievement that will
determine your future success is your ability to stay on that path and continuously improve.

There are undoubtedly many questions in your head that all lead to the changes you must make
to make all this a reality. Let’s face it. You are going against the odds when committing to
becoming a professional-level trader.

Ninety-eight percent of all traders fail. However, most of them have yet to learn why, well,
then, why is the key. They fail because they have never been introduced to the right process,
strategies, and methods, and they never had a coach to help them stay accountable to that
process.

How long will it take? That depends on your commitment level, ability to approach this with an
open mind, and ability to be coachable. For most people, the timeframe is six to eighteen
months. But that is only the point at which you have discovered how to stay on the path and
continuously improve. Your goals will be achievable from then on, but they will likely differ
from what you imagined when you started.

This is Your Edge:

Options trading can be a complex and overwhelming topic for many traders, but
these strategies have been designed to simplify the process and provide a

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roadmap for success. There are three key edges that you can achieve with these
strategies:

1. Asymmetric Returns: Both the Classic Fly and Batman strategies help keep
drawdowns small and returns stable, which reduces the stress and
uncertainty of trading. This can help traders stay disciplined and
focused on their goals.

2. Collecting Premium on 0DTE: Both strategies take advantage of the

exponential decay of options premium, allowing traders to collect a
significant amount of premium quickly.

3. Agile Continuous Improvement Process: By tracking your trades and

conducting a daily and weekly retrospective, you will continually
improve your execution and fine-tune your strategies. This will lead to
better results and a more confident approach to trading.

By mastering these strategies, you will have a solid foundation for options
trading success and the tools to generate consistent profits in the market.

Overview of the 0-DTE Option Strategy of Choice

Trading Options on the last day of expiration (0DTE) have become increasingly popular among
retail traders, institutions, and fund managers. The 0DTE event offers a unique opportunity to
collect options premium quickly while minimizing risk. And there are several ways to do that.

The strategy we prefer at Zero Days to Expiration is the OTM symmetric butterfly. The OTM
butterfly strategy has defined risk, provides the asymmetric returns we are looking for, is
exceptionally good at collecting premium, has incredible flexibility, and is excellent at taking
advantage of market volatility.

An OTM symmetric butterfly is created with two vertical spreads of the same width and type
(either calls or puts); one of the spreads is long, and the other is short. Both spreads share the
same short strike. The options used in the butterfly have the same expiration date and the
same underlying asset. This strategy is called OTM because the options sold are out of the
money, meaning they have a lower likelihood of being exercised.

Which Underlying Asset to Use

The underlying assets we use are derivatives of the S&P 500, which include options on the SPX
index and micro index, also options on the E-mini S&P futures. All three have weekly options
that expire five days a week, Monday through Friday. The options on these are European style,
which means there is no early assignment, unlike options on the SPY that have American style.

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This is specifically why we don’t use options on SPY because early assignment means there’s a
high likelihood that if the strategy is near the money, you could get an early assignment and
then upset the strategy making it difficult or impossible to take advantage of the 0DTE event

Feature /ES XSP SPX

Underlying Asset E-mini S&P futures S&P Index S&P Index

Trading Venue CME CBOE CBOE
Style European European European
Settlement Physical Cash Cash
Lquidity Medium-High Low-Medium High
Commissions High Low Low
PDT Rule No Yes Yes
Trading Hours EDT 6 PM to 5 PM 9:30 AM to 4 PM* 9:30 AM to 4 PM*

Differences and Considerations of Asset Types

As a retail options trader, you have several options when it comes to derivatives based on the
S&P 500 Index. Let’s explore the similarities and differences between options on the SPX, XSP,
and e-mini S&P futures and highlight the key things you need to be aware of when trading
these derivatives.

One of the key similarities between these three options derivatives is that they are all weekly
options and have expirations all five days of the week with a European-style expiration.

Now, let's look at the differences between these options derivatives. Options on the SPX and
XSP are cash-settled, meaning they settle in cash based on the difference between the strike
price and the value of the S&P 500 Index at expiration. With most brokers, the commissions
and fees for options on the SPX and XSP are usually equivalent to the costs associated with
stock options and are relatively low.

Options on the XSP and SPX are subject to the pattern day trader rule, which requires traders
who frequently trade in these instruments to have a minimum of $25,000 in their brokerage
account. And traders need to know there are morning expirations at the end of each month for
SPX and XSP options.

Options on the e-mini S&P futures are based on the e-mini S&P 500 futures contract, a smaller,
electronically traded version of the standard S&P 500 futures contract. E-mini S&P futures
options are physically settled. With most brokers, the commissions and fees for the e-mini S&P
futures options are typically six times the cost of the other two options derivatives. However,
options on the e-mini S&P futures are not subject to the pattern day trader rule, making them a

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good choice for traders who do not have the $25,000 minimum balance required for trading
options on the XSP and SPX.

Traders need to be aware that the underlying e-mini S&P futures have quarterly expirations,
which should be tracked by the trader, especially near the delivery date and rollover activity
that occurs. Additionally, the underlying price of the futures contract at the beginning of its
quarterly contract, after the rollover, is usually priced at a significant premium to the SPX. As
the quarter nears expiration, that price differential closes to parity.

In conclusion, all three options derivatives have unique advantages and disadvantages, and the
right option type depends on your individual needs and circumstances. If you're looking to
trade with a low-cost option, options on the XSP and SPX may be the better choice for you. On
the other hand, if you're looking for an option that is not subject to the pattern day trader rule,
options on the e-mini S&P futures may be a better fit.

Regardless of which option type, be sure to research and consider the essential things traders
need to be aware of. Keeping these critical considerations in mind helps ensure that you make
informed decisions and achieve success as a 0-DTE trader.

Explanation of the Strategies

In this manual, you will learn about two specific options trades that use an OTM butterfly
options strategy:

1. Zero Days Classic Fly

2. Zero Days Batman

You will also learn how to implement a profit-taking framework and daily and weekly processes
for managing these strategies. The process is agile, which means it is broken down into small
iterations, with frequent reviews, to ensure tight controls and continuous improvement.

The Zero Days Classic Fly is a directional strategy that uses a single out-of-the-money (OTM)
butterfly. The goal is to open the position with a debit at least one-tenth the width of the fly.
This will result in a position with a 1:9 risk-to-reward ratio. The position is opened in the
morning session when implied volatility is high to maximize the risk-to-reward ratio.

Risk management is simple. Generally, we allow the strategy to go to 100% loss. Profit
management is based on a two-dimensional framework. The first dimension is the time of day,
and the second dimension is the proximity of the price to the butterfly break-even points.

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 Figure 1 Classic Butterfly, symmetric out of the money (OTM)

The Zero Days Batman strategy builds upon the Classic Fly. It is a market-neutral strategy that
uses two OTM butterflies – a long put butterfly below the current market and a long call
butterfly above the current market. It is also opened in the early part of the morning session.

The profit management for this strategy is the same as the Classic Fly, but the risk management
is a bit different. If the trade remains an unrealized loss, we close the trade when it exceeds
50% unrealized loss.

Figure 2 Batman strategy

Both strategies use a 2-dimensional profit management framework (time and distance). The
first dimension consists of three time periods throughout the trading session – opening,
afternoon, and closing.

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The position is checked periodically, and the trader decides how to manage the trade based on
the price proximity to the butterfly's break-even points. The trades should be recorded in a
journal and evaluated at the end of each day and week through the daily and weekly processes
outlined in this manual.

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Principles and Philosophy

As part of the 0-DTE service, you aim to become a consistently profitable, independent,
professional-level options day trader. It would be best if you committed to a particular way of
thinking and acting to achieve this goal.

0-DTE Trader’s Manifesto

• Agility: Developing a process based on agile principles that embrace rapid iteration,
continuous improvement, and the ability to adapt quickly to changing market conditions.
• Antifragility: Building resilience and adaptability, embracing volatility and uncertainty, and
taking advantage of unexpected market events.
• Mental Strength: Cultivating mental strength and healthy habits, managing emotions,
maintaining a clear, objective mindset, and establishing healthy habits and routines that
support focus and energy levels.
• Discipline: Maintaining a disciplined approach to trading, adhering to strategies, maintaining
a long-term perspective, and avoiding being swayed by short-term fluctuations or
emotional reactions.
• Attention to Detail: Paying close attention to the details, analyzing data, staying informed
about market conditions, conducting thorough research, maintaining accurate records, and
being diligent in risk management practices.
• Zen Circle: Embracing the principles of the Zen Circle, cultivating impermanence,
mindfulness, detachment, discipline, and ethical behavior, reducing emotional reactivity,
and increasing resilience in the face of market fluctuations.

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Classic Fly Strategy

The Zero Days Classic OTM Butterfly is an options trading strategy that involves creating two
vertical spreads, one long and one short, using either calls or puts with the same short strike
price. The strategy's objective is to place it far enough out-of-the-money (OTM) so that the
debit of the strategy to one-tenth of the width. This allows the trader to place the order based
on the market's pricing of the options.

By implementing this strategy, the goal is to achieve a defined risk that is small relative to the
potential profit, leading to low drawdowns and manageable volatility with the equity curve.

The goal of the strategy is to maximize profit by taking advantage of market volatility through a
well-defined process. This strategy involves opening a position after the market opens in the
morning. Choose a butterfly width ranging from 20 to 35, depending on your tolerance and
capacity for risk.

The 10% Debit Rule

The preferred setup for a single OTM butterfly options trade with the SPX on the 0DTE event is
to make the debit one-tenth of the width of the fly. This is known as the "10% debit rule" and is
commonly used by options traders to manage risk.

With a standard width of $30 for an 0DTE OTM butterfly with the SPX, the debit would be $3
using the "10% debit rule." This would result in a maximum reward of $27, which is the width
minus the debit. The risk-to-reward ratio in this scenario would be 1:9, making the trade
attractive for those seeking high potential returns with limited risk.

It is important to note that the 10% debit rule is a general guideline and may not be suitable for
all traders or market conditions. Traders should consider risk tolerance, trading goals, and
market conditions before implementing any position-sizing strategy.

The trade is monitored frequently during the trading session, using a well-defined framework,
focusing on maximizing profit and adjusting the trailing stop as necessary. The success of the
trade is evaluated daily through journal entries and a weekly review, with the best trades being
documented in a playbook for future reference.

Strategy Overview
I. Entry Criteria
- Time of entry (after the market opens)
- Width of butterfly (20-35)

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 - Maximum position size (no more than 1% of trading capital)
II. Profit Management
- Checking position every 15-30 minutes
- Divide price proximity into three categories
- Outside real-time P&L break even
- Between real-time P&L and breakeven at expiration
- Between butterfly break evens (profit tent)
- Track data in the journal (period, proximity of price)
III. Risk Management
- 100% loss if the price remains unrealized loss

Classic Entry Details

Let's consider a scenario where a trader is looking to initiate a Classic OTM Butterfly position on
the SPX index. They have analyzed the market conditions and determined that it is a strong
trending market, and they believe that the index will continue to move in an upward direction.
They open a single OTM SPX Call Butterfly with a width between 20 and 30, using a 1 to 9 risk-
to-reward ratio and a defined risk management approach to limit potential losses.

The trader enters the position early in the trading session when implied volatility is at its
highest, allowing them to get an optimal position. They use the 50-day EMA to determine the
market’s direction and place the butterfly spread about five strikes OTM, then adjust the
strategy in your staging environment or analyzer, ensuring that the debit is approximately one-
tenth the width of the spread, as per their strategy. Once the criteria are set, send the order to
the market at the mid-price. You may need to cancel and replace the order 5 to 10 cents to
ensure a quick fill.

As the trading day progresses, the trader continuously monitors the position and adjusts their
approach based on market conditions and the specific trade setup. During the opening session,
they take a more liberal profit management approach, allowing the initial volatility of the day to
work itself out and establish a direction. They keep a close eye on falling or rising volatility,
which can significantly impact the P&L curve, and take profits cautiously until it becomes more
clear whether or not the index is likely to make any further advances toward the profit tent.

Classic Profit Management

Once the Classic OTM Butterfly position has been deployed, the trader must continuously
monitor the position and adjust their approach based on the specific market conditions and the
proximity of the price to the profit curve break evens and the butterfly break evens. They can
use a framework to classify their trading strategy based on the time of day and the specific
market conditions to manage risk and maximize profits throughout the trading day effectively.

11
During the opening session, the trader takes a more liberal profit management approach,
allowing the initial volatility of the day to work itself out and establish a direction. They keep a
close eye on falling or rising volatility, which can significantly impact the P&L curve. The trader
takes profits cautiously until it becomes more clear whether or not the underlying asset is likely
to make any further advances toward the profit tent.

In the afternoon session, the trader sets a trailing stop with a trail between 50-75% of the
maximum unrealized profit attained. They have a relatively high degree of certainty about the
character of the market for that session. They are prepared to adjust their approach if any
significant events occur that could impact the trade.

As the trading day moves into the closing session, the trader focuses on the proximity of the
price to the profit curve break and the butterfly break evens. They use the framework to
classify their trading strategy based on the time of day and the specific market conditions. They
keep a close eye on price action and make value judgments about when to exit the trade or let
it go based on their analysis of the market conditions.

In Zone One, which represents negative prices outside of the profit curve break even, the trader
should allow the trade to go to maximum loss, as there is little they can do to manage the risk
in this scenario.

In Zone Two, which represents prices between the profit curve break even and the closest
butterfly break even, the trader should take a more cautious approach to profit management,
taking profits more conservatively to avoid unnecessary risks.

In Zone Three, which represents prices between the butterfly break evens, also known as the
profit tent, the trader should employ an aggressive profit management approach. They can take
profits more liberally, using trailing stops to capture profits while still providing breathing room
to allow price to go deep into the day and further into the profit tent.

Overall, the trader must be flexible and willing to adjust their approach based on the specific
market conditions and the proximity of the price to the profit curve break evens and the
butterfly break evens. The trader can effectively manage risk and maximize profits throughout
the trading day using the session and proximity framework.

Classic Risk Management

Suppose the underlying asset’s price goes opposite the strategy as the initial move after
entering a position. In that case, there are several risk management strategies that the trader
can consider. Here are a few examples:

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1. Let the trade go to max loss: As part of the defined risk management approach, the trader
may choose to let the trade go to its maximum loss and accept the predetermined risk.

2. Cut the trade: If the trader believes that the market conditions have changed or that the
trade is no longer viable, they may choose to cut the trade and limit potential losses.

3. Use a stop loss: The trader can use a stop loss to limit potential losses if the price moves
against the strategy. This involves placing an order to close the position at a predetermined
price level below the entry point.

4. Use a trailing stop: A trailing stop can lock profits and limit potential losses as the price
moves against the strategy. This involves placing a stop-loss order that moves with the
price, allowing the trader to protect their profits while potentially giving the trade room to
recover.

5. Adjust the position: Depending on the specific trade setup and market conditions, the
trader may choose to adjust their position by adding or subtracting contracts or adjusting
the width of the butterfly spread to better suit the market conditions.

It's important to note that the specific risk management strategy will depend on the trader’s
risk tolerance, trading goals, and market conditions. By using a framework to classify their
trading strategy based on the time of day and the proximity of price to the profit curve break
evens and the butterfly break evens, the trader can effectively manage risk and maximize
profits throughout the trading day, regardless of market conditions.

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Batman Strategy

The Zero Days Batman strategy is an options trading strategy that involves using two OTM
butterflies, one long put and one long call, to achieve market neutrality. This strategy builds
upon the principles of the Zero Days Classic Fly but with a different risk management approach.

The Zero Days Batman is designed to reduce the risk of a single butterfly trade by entering two
simultaneous trades that both have the potential to profit. The strategy profits from collecting
the premium on both the put and call butterflies, which decreases the overall risk of the trade.

If the price of the underlying security moves in an unfavorable direction, the strategy reduces
the potential loss by closing the trade if the unrealized loss exceeds 50%.

Overall, the Zero Days Batman strategy is designed for traders looking to reduce their overall
risk and still achieve attractive returns in a market-neutral fashion. By following the principles
outlined in this manual, traders can take advantage of this powerful strategy and achieve their
trading goals.

Strategy Details
The Zero Days Batman strategy is a market-neutral strategy based on the Zero Days Classic Fly
strategy. The Batman strategy uses two OTM (Out-of-the-Money) butterfly options positions to
achieve asymmetric returns and maximize profits.

Strategy Set-Up
The setup of the Batman strategy is the same as the Classic Fly strategy. A long-put butterfly is
placed below the current market, and a long-call butterfly is above the current market. The
parameters of the butterflies are the same as the Classic Fly.

Profit Management
The profit management of the Batman strategy is the same as the Classic Fly strategy. The
trader checks on the position every 30 minutes during the trading session and develops an
essential strategy for each of the three-time segments (morning, early afternoon, and late
afternoon).

Batman Risk Management

The 0-DTE Batman strategy offers a simplified approach to risk management, as the risk is
primarily concentrated in Zone one, which is located between the real-time P&L break-even
points of the put and call butterflies. The combined debit for the two butterflies represents the

14
total risk of the trade, and if the real-time loss in Zone one exceeds 50% of the total debit paid
for the Batman, the trader should close the entire trade.

While the risk management in the 0-DTE Batman strategy is straightforward, the profit
management framework remains the same as with the Classic 0-DTE Butterfly. It is based on
two dimensions: the three trading sessions (Open, Afternoon, and Close) and proximity to the
real-time P&L and the Batman break-even points.

During the opening session, the trader should take a more liberal approach to profit
management, allowing the initial volatility of the day to work itself out and establish a
direction. The afternoon session calls for a trailing stop with a trail set between 50-75% of the
maximum unrealized profit attained. In contrast, the closing session requires a focus on price
relative to the profit curve, as the curve takes on the shape of the two butterflies at expiration.

The profit management framework should also consider the real-time P&L and price proximity
to the break-even points of the put-and-call butterflies. In Zone one, where the risk is primarily
located, the trader should be prepared to close the entire trade if the 50% loss limit is
exceeded. In Zone two, between the P&L break-even points of the put and call butterflies, the
trader should consider taking profits as the profit curve grows throughout the day. In Zone
three, between the break-even points of the two butterflies, the trader should focus on
managing the gamma risk of the trade and adjust profit management strategies based on the
character of the market.

By monitoring the trade in real-time and using the profit management framework to guide their
decisions, the trader can effectively manage risk and optimize profits in the 0-DTE Batman
strategy.

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Profit Management Framework
The 0-DTE profit management framework is a structured approach to managing the profitability
of options trades. The best way to describe it is a two-dimensional framework, the first
dimension is time, and the second is location.

The time dimension involves segmenting the trading day into three parts:

1. Opening session – Between the Open and Noon

2. Mid-day session – Between Noon and 2:30 PM

3. Closing session – Between 2:30 PM and the Close

Figure 3 Profit management framework

The second dimension is the location relative to the Butterfly. Specifically, the trader evaluates
the price position relative to the butterfly break-even points. We refer to the areas between

16
the break-even points as zones. So at any time during the day, the position exists within a
specific time and zone. Each of these dimensions will have unique characteristics that the
trader can evaluate and determine whether to hold or close the position.

The three location zones are defined as follows:

1. Zone 1 – Between P&L Break even and loss

2. Zone 2 – Between P&L Break Even and Fly Break Even

3. Zone 3 – Between the left & right Fly Break Evens

Figure 4 Profit management zones.

The framework emphasizes the importance of being proactive and flexible in managing
positions, allowing traders to react to market conditions and capitalize on potential profits.
Following this framework, traders can maintain a low-risk, high-reward approach to options
trading and consistently achieve asymmetric returns.

Risk Management
The risk management of the Batman strategy is different from the Classic Fly strategy. In the
case of an unrealized loss, the trader closes the entire position if the loss becomes more
significant than 50% of the debit.

This condition occurs about 35% of the time when the price remains in Zone 1 (see Figure 1) for
an extended period. This is typically between late in the Opening Session to early in the
Afternoon Session and approximately between 11:30 AM to 1 PM.

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Implied Volatility Timing
The butterfly is known to be a “vega negative” strategy. This means the strategy gains value,
the P&L curve rises, and the volatility drops. And reciprocally, when volatility increases, the
value and P&L fall. So, what does this mean in the real world? How does this help us open a
position and close for profit?

Conclusion
The Zero Days Batman strategy provides a market-neutral approach to options trading. The
strategy uses two OTM butterfly option positions to achieve asymmetric returns and maximize
profits. The system is designed to be a more conservative approach to options trading and
provides a way to manage risk in the event of an unrealized loss.

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Strategy Selection

This chapter will discuss the differences between the Zero Days Classic Fly and the Zero Days
Batman strategies and when to use one over the other. Both systems are designed to help
traders achieve consistent profits in the options market, but each has unique advantages and
disadvantages.

Classic Fly Strategy

The Classic Fly is a directional strategy that captures the premium on a zero-day time to-
expiration (0DTE) options trade. It is a semi-passive strategy, which means that traders will let
their positions go to a 100% loss if the price remains unrealized but actively manage profit-
taking. This strategy aims to maximize profits through collecting premiums, best used in a
stable trending market. Bullish trending, accommodative-induced markets like those from the
2020 pandemic lows to the end of 2021 are the perfect markets for this strategy.

Batman Strategy
The Batman strategy is a market-neutral strategy that uses two OTM butterfly options with the
same parameters as the Classic Fly strategy. However, it differs in its risk management
approach. With the Batman strategy, traders will close the trade if the unrealized loss exceeds
50%. This strategy is designed to capture profits in a volatile market where prices direction and
magnitude are difficult to forecast, which in the absence of accommodative monetary policy, is
most of the time.

Choosing Between Strategies

Traders must consider the current market conditions when deciding which strategy to use. If
the market is stable and prices are not likely to make sudden significant moves, the Classic Fly
strategy may be the better choice. On the other hand, if the market is volatile and prices are
more likely to make sudden significant moves, the Batman strategy may be the better choice.

Ultimately, the choice between strategies will depend on each trader's risk tolerance, trading
style, and current market conditions. Traders should always review the market conditions
before entering a trade and choose the best strategy suited to their needs.

In conclusion, the Zero Days Classic Fly and the Zero Days Batman strategies are potent tools for
traders who want to achieve consistent profits in the options market. By carefully considering
the current market conditions and risk tolerance, traders can choose the best strategy for their
individual needs.

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The Daily Process

The daily process is a critical component of the Zero Days Classic Fly and Zero Days Batman
strategies. This chapter provides a step-by-step guide to executing a successful trade using
these strategies. To be effective, the daily process must be followed consistently and rigorously.

Step 1: Pre-Market Preparation

Before the market opens, review the daily market conditions and any relevant news events that
may impact the market. Decide on the strategy you will use for the day: the Zero Days Classic
Fly or the Zero Days Batman.

This document will focus on the Batman strategy, as it is the preferred strategy for most market
conditions we have encountered. A specific Classic Fly strategy will be added to this document
as an addendum at a future date. Let’s assume that all content presented here is in the context
of opening and managing a Batman.

Step 2: Entering the Trade

After the market opens, you will stage put-and-call butterflies below and above the current
price. The strikes for each butterfly are set such that the debit is one-tenth the width of the
butterfly. The width of the flies will depend on the trader's risk tolerance; for this example, let's
assume the width of each fly is 30 wide or six strikes. So, the target debit for each butterfly will

20
be $3, or one-tenth the width. Try to stay within this cost. Going over by 5-15 cents is
acceptable if you can make up for it by entering a lower price for the other butterfly.

Once the butterflies are staged, we will attempt to enter the market with the standard Batman
criteria. If the market does not accept an order, we will perform a Cancel/Replace and adjust
the strikes and the debit to increase the chances of being accepted, making every attempt not
to exceed one-tenth of the width. This process is repeated as necessary until the position is
opened.

Step 3: Monitoring the Trade

After both butterflies are in the market, we will engage the 0-DTE profit management
framework, including risk management. Let’s be clear that the focus here is on managing profit,
as the risk is relatively small compared to the potential gain.

Check the status of the trade every 30 minutes during the trading session. Record the period
and proximity of the price in a journal. Determine the optimal trailing stop based on the
position's proximity to the butterfly's break evens.

Step 4: Exit the Trade

At the end of the trading day, exit the trade according to the selected strategy. For the Zero
Days Classic Fly, this means letting the trade go to 100% loss if it remains an unrealized loss. For
the Zero Days Batman, exit the trade if the unrealized loss exceeds 50%.

Step 5: Review the Trade

After exiting the trade, complete the journal entries and write a short narrative describing the
day and ranking the trades on three criteria (market condition, trade execution, and the
trader's mental state) on a simple ABC scale.

Conclusion
The daily process is the foundation of successful trading with the Zero Days Classic Fly and Zero
Days Batman strategies. Following the steps outlined in this chapter, traders can consistently
achieve asymmetric returns, collect the premium on the 0DTE, and improve their skills over
time.

21
The Weekly Retrospective

The Retrospective is a critical component of the weekly process and is designed to provide
traders with a structured approach to evaluate their performance and identify areas for
improvement. This chapter will explain the purpose of the Retrospective, the steps involved,
and provide tips for making the most of this opportunity to enhance your trading.

Step 1: Review the Journal Entries

The first step in the Retrospective process is reviewing the past week’s journal entries. This
review should include an assessment of the market conditions, trade execution, the trader's
mental state for each trade, and an evaluation of how well these factors were managed.

Step 2: Identity Trends and Patterns

After reviewing the journal entries, traders should identify trends and patterns in their
performance. This can include areas of strength and areas that need improvement. For
example, a trader may determine that they are solid in managing their mental state during a
trade but must focus on improving their trade execution.

Step 3: Develop Action Plans

Once trends and patterns have been identified, traders should develop action plans to address
areas for improvement. These action plans should be specific, measurable, and actionable and
should focus on taking steps to enhance their performance in the future.

Step 4: Reflect on the Process

At the end of the Retrospective, traders should take time to reflect on the process. This can
include considering the lessons learned from the week, the steps taken to improve, and the
steps still needed to reach the desired level of performance.

Tips for Making the Most of the Retrospective:

Be honest with yourself: The Retrospective is an opportunity, to be honest about your
performance and identify areas for improvement.

Be open to feedback: Encourage others to provide constructive feedback and be open to

hearing it. This can help you identify areas for improvement and enhance your performance.

Focus on continuous improvement: The Retrospective should be viewed as a tool for

continuous improvement, not as a source of criticism. Embrace the opportunity to learn and
grow as a trader.

22
Celebrate success: Remember to celebrate your successes and acknowledge your progress,
which will help keep you motivated and focused on your goals.

Conclusion:
The Retrospective is an integral part of the weekly process, and it allows traders to evaluate
their performance, identify areas for improvement, and take steps to enhance their
performance. By approaching the Retrospective with an open mind, a commitment to
continuous improvement, and a focus on success, traders can achieve their full potential as
traders.

23
Position Sizing Strategy

Trading options on the 0DTE requires a carefully considered approach to position sizing to
ensure consistent success. A combination of fixed fractional and risk-based position sizing is an
effective way to maximize scalability while maintaining stability in equity growth.

Introduction
The size of each trade can significantly impact the overall success of a trading strategy. Position
sizing refers to determining how much capital to allocate to each transaction. When trading
options, it is essential to consider each trade’s potential risk and reward and adjust the position
size accordingly.

Asymmetric risk-to-reward strategies, such as an OTM butterfly on the 0DTE event, offer the
potential for significant profits with limited risk. However, it is crucial to implement a position
sizing strategy compatible with this strategy to maximize returns while mitigating risk.

This article describes a position sizing strategy designed to be used with an asymmetric risk-to-
reward strategy to maximize scalability while maintaining stability in equity growth.

The Fixed Fractional Component

Fixed fractional position sizing involves allocating a set percentage of capital to each trade. This
approach ensures consistent portfolio risk, as the same amount of money is at risk for each
transaction, regardless of the potential reward.

For example, traders might allocate 1.5% of their capital to each trade. If the trader has
$100,000 in trading capital, this will result in a $1,500 position size for each transaction. Using
fixed fractional position sizing, the trader can ensure that their portfolio risk remains constant,
even as their capital grows or decreases.

The Risk-Based Component

Risk-based position sizing involves determining the position size based on the potential loss
from each trade. This approach helps to mitigate risk and reduce drawdowns by ensuring that
the position size is appropriate for the level of risk involved.

For example, a trader might set a maximum loss threshold of $300 for each trade. The position
size would then be determined based on the trade distance from the current price to ensure
that the maximum potential loss is equal to or less than the $300 threshold.

24
The combination of Fixed Fractional and Risk-Based Position Sizing
By combining fixed fractional and risk-based position sizing, a trader can benefit from the
strengths of both approaches. Fixed fractional position sizing ensures consistent portfolio risk,
while risk-based position sizing helps to mitigate risk and reduce drawdowns.

For example, traders might allocate 1.5% of their capital to each trade, as with fixed fractional
position sizing. However, they might also set a maximum loss threshold of $300, as with risk-
based position sizing. The position size would then be determined based on the 1.5% capital
allocation and the $300 loss threshold, ensuring that the trade is consistent with the overall
portfolio risk and appropriately sized based on the level of risk involved.

Detection and Response to Longer-than-Normal Drawdowns

Longer-than-normal drawdowns can indicate poor market conditions or an ineffective trading
strategy. To mitigate the impact of these drawdowns on equity growth, it is essential to detect
them and respond appropriately.

One effective response to longer-than-normal drawdowns is to reduce position size until the
poor performance streak has ended. This helps to mitigate risk and preserve capital, reducing
the impact of the drawdown on equity growth.

Once the poor performance streak has ended, a trader can reengage with their position sizing
strategy, gradually increasing their position size as market conditions improve. This helps to
balance risk management with maximizing returns.

Minimum Account Size

Let’s start with a minimally sized account. The smallest practical account size will depend on the
underlying asset type. Our choices include, in order of required margin, the Micro S&P Index
(XSP), the E-mini S&P futures (ES), and the full-sized S&P Index (SPX).

1. XSP: USD 2,000

2. ES: USD 3,000

3. SPX: USD 5,000

These account sizes assume you will uphold the Pattern Day Trader rule, explained below.

Pattern Day Trader Rule

If you choose to trade the XSP or SPX, you will be subject to the Pattern Day Trader (PDT) rule,
which restricts you to 3 round-trip day trades within a 5-day rolling window when your account

25
size is under $25,000. We have a strategy that effectively gets around the PDT restriction using
a box trade technique, which we call the “PDT Hack.” which will be described in another
section. If you are classified as a pattern day trader, you must always maintain a minimum
account balance of $25,000 or more in your margin account, or you will be restricted from day
trading.

The Pattern Day Trader (PDT) Rule is a regulation established by the U.S. Securities and
Exchange Commission (SEC) that applies to individuals who engage in day trading. And that
would certainly apply to 0-DTE options traders.

Conclusion
A comprehensive approach to position sizing is essential for successful options trading on the
0DTE event. By combining fixed fractional and risk-based position sizing, a trader can maximize
scalability while maintaining stability in equity growth. The detection and response to longer-
than-normal drawdowns are also important, helping to mitigate risk and preserve capital.

It is essential to regularly review and adjust the position sizing strategy as market conditions
change and to backtest it before implementation to ensure its effectiveness. With the right
position sizing strategy in place, traders can maximize their chances of consistent success in the
options market.

26
Volume Profile

A volume profile visually represents trading activity at different price levels over a specified
period. Traders can use long-term volume profiles to analyze future price movements by
identifying market structures such as volume and low-volume nodes. These structures can
provide information about support and resistance levels and help traders make informed
decisions in the market.

At 0-DTE, our preferred Volume Profile tool is within the charting application called
TradingView. You can only use the tool if you have a subscription to TradingView. We highly
recommend it and discourage the tool from other trading platforms, such as Think or Swim,
because they produce inferior results.

Introduction to Volume Profile Analysis for Trading

As traders, it's crucial to understand the market and make informed decisions when buying or
selling securities. A volume profile is one tool traders can use to gain insights into market
behavior. We’ll explore how a long-term volume profile can analyze current price movements
by discovering the market structure and memory.

What is a Volume Profile?

A volume profile is a visual representation of the amount of trading activity at different price
levels over a specified period. The profile is constructed by plotting the volume of trades at
each price level, with the horizontal axis representing price and the vertical axis representing

27
volume. By using volume profiles, traders can gain insight into the behavior of market
participants and make predictions about future price movements.

Market Memory and Market Structure

Benoit Mandelbrot, a mathematician and economist, described the concept of market memory
as the idea that market behavior tends to repeat itself over time. In the context of volume
profiles, this means that specific structures in the market can be identified by analyzing long-
term volume profiles. These structures represent areas of difference in market liquidity and are
crucial to understanding future price movements.

Volume Nodes and Volume Wells

When analyzing volume profiles, traders should look for two essential features: volume nodes
and volume wells. Volume nodes are contiguous price levels that have accumulated
significantly more than others. These areas represent a volume concentration over a range of
prices and can provide information about market structure.

Volume wells are areas between volume nodes with curiously low volume levels. Within these
low-volume nodes, traders should look for distinct price levels with extremely low volume
levels, called Low Volume Levels (LVLs).

Using Market Structure to Analyze Future Price Movements

To uncover market structure, traders can draw lines at levels representing abrupt changes in
volume, such as the edges of volume nodes and LVLs. By plotting these levels on a long-term
chart, traders can visualize the market structure or memory that has developed over time. This

28
information can help traders predict future price movements and build trading strategies based
on market structure.

When price encounters one of these lines, either the edges of volume nodes or LVLs, it often
finds support or resistance. When the price exits a long-term node and enters a low-volume
node, it transitions from an area of high liquidity to a place of low liquidity.

This transition can accelerate price movement as the price seeks out new levels of liquidity or
value. If the price encounters an LVL before reaching another volume node, it may pause
temporarily or get rejected and return to the volume node.

29
Price Behavioral Analysis
The horizontal lines we draw to uncover market memory are not all the same. We draw some
lines to outline the falling/rising edges of a volume node. We draw other lines to mark levels of
extreme lack of volume inside wells. The former is marking a boundary between liquidity and
lack of liquidity, and the latter marks support and resistance levels.

The boundaries of a volume node also provide support and resistance, but they also mark the
transition to and from liquidity. Think of the inside of nodes as attractive to price and the
absence of nodes as an unattractive place where the price does not want to be. When the price
enters a place it doesn’t want to be, it picks up the pace to find another node.

You can also think of volume nodes as areas of value. The market wants to find or discover
areas of value; in fact, it is the sole purpose of markets.

We call the lines we draw between nodes Low-Value-Levels, or LVLs. These provide varying
strength support and resistance levels. But they are more like gateways to the next area of
value. Price will leave a node and encounter LVLs. The LVL will act like a door or gateway. The
door will either be shut and reject the price, sending it back to where it came from, or the door
will be open, and the price may hesitate a bit, then pass right through and continue searching
for new value.

With this knowledge, the analyst can construct several possible price paths. It is advisable to
avoid getting wedded to a single path. Always imagine at least two paths, perhaps three.
Imagine the path of rejection, the path of acceptance, and the path of indecision.

Recommended Volume Profile Tool

TradingView is a popular charting platform that features a comprehensive volume profile tool.
It allows traders to analyze volume data and market structure on various charts and
timeframes. In addition to volume profile, TradingView offers a wide range of technical analysis
tools and indicators and the ability to share and view charts and ideas with other traders.

Conclusion
By understanding the concept of market memory and using long-term volume profiles to
uncover market structure, traders can gain valuable insights into the behavior of market
participants and make predictions about future price movements. When combined with other
technical analysis tools, volume profiles can be a powerful tool for traders looking to make
informed decisions in the market.

30
Trader’s Mindset

I couldn’t decide whether to put this section before the strategy and process chapters. It should
be the first consideration and is, without a doubt, the most crucial thing in trading. With the
correct mindset, everything is possible.

As a trader, your mindset plays a critical role in your success. How you think about the markets,
your trading, and yourself can significantly impact your results. This chapter will explore some
essential elements of a successful options trader's mindset and how you can develop these
skills.

Emotional Control
One of the biggest challenges that traders face is managing their emotions. Fear, greed, and
other emotions can significantly impact your trading results. To be a successful options trader,
you must develop the ability to control your emotions and maintain a calm and focused
demeanor, even in the face of market volatility.

One of the best ways to develop emotional control is to understand emotions' role in trading.
Fear, for example, can lead you to make impulsive decisions not in line with your trading plan.
By recognizing these emotions and taking steps to manage them, you can reduce their impact
on your trading results.

Mental Preparation
In addition to emotional control, mental preparation is critical to your success as an options
trader. You must set realistic expectations, develop a positive mindset, and have a clear trading
plan. This will help you stay focused and make more informed decisions, even in market
volatility.

One of the best ways to prepare yourself mentally is to take the time to understand your
tendencies, strengths, and weaknesses. This will help you develop a more effective trading plan
and take steps to address areas of vulnerability.

Self-Awareness
Self-awareness is another critical aspect of a successful options trader's mindset. You need to
understand your tendencies, strengths, and weaknesses to make informed decisions and stay
on track with your trading plan.

31
One of the best ways to develop self-awareness is to keep a journal of your trades and reflect
on what you did well and what you could have done better. This will help you identify areas of
strength and weakness and take steps to address these areas over time.

Positive Reinforcement
A positive mindset is critical to your success as an options trader. You must cultivate a positive
outlook and focus on what you are doing well, even in market volatility.

One of the best ways to reinforce positive thinking is to celebrate small wins. This can be as
simple as acknowledging a good trade or reflecting on your progress. By focusing on the
positive aspects of your trading, you can build a more positive mindset and increase your
chances of success.

Mindfulness
Mindfulness is another critical aspect of a successful options trader's mindset. You can develop
a calm and focused state of mind by incorporating mindfulness practices into your daily routine,
such as meditation and deep breathing.

By quieting your mind and focusing on the present moment, you can reduce stress, improve
your decision-making skills, and increase your chances of success as an options trader.

In conclusion, the mindset of a successful options trader is critical to your success. By

developing skills such as emotional control, mental preparation, self-awareness, positive
reinforcement, and mindfulness, you can improve your trading results and achieve your goals
as a trader.

The Zen Circle

The Zero Days to Expiration logo is a fancy circle surrounding the
letters “dte,” which stands for “Days to Expiration,” and the circle
represents the “0” or zero. The hand-drawn circle is a Zen Circle, also
known as Enso. This is a symbol commonly used in Zen Buddhism. It
is a hand-drawn circle, usually in one continuous brush stroke, and
symbolizes various aspects of Zen philosophy and practice.

The Zen Circle symbolizes the concepts of impermanence,

wholeness, presence, and emptiness, which are integral to Zen Buddhism. In the context of an
agile, continuous improvement traders process, these principles can be applied as follows:

32
4. Impermanence: The ever-changing nature of the markets means that traders must be open
to adapting their strategies and processes as needed. By embracing impermanence, traders
can stay ahead of the curve and continually improve their performance.

5. Wholeness: Just as the circular shape of the Zen Circle represents wholeness and
interconnectedness, traders must work together as a cohesive unit to achieve their goals.
Traders can avoid gaps and inefficiencies in their processes by fostering a sense of
wholeness and collaboration.

6. Presence: In the fast-paced world of trading, traders must be fully present and mindful of
the moment. This requires paying close attention to market conditions and making quick,
informed decisions.

7. Emptiness: Approaching each trade clearly and free from preconceptions is critical to
success in trading. By embracing the emptiness, traders can remain open to new ideas and
approaches and avoid getting stuck in set patterns or routines.

The principles of the Zen Circle can help traders achieve their goals and improve their
performance through an agile, continuous improvement process. By embracing impermanence,
wholeness, presence, and emptiness, traders can stay ahead of the curve, work effectively as a
team, make informed decisions, and continually improve their performance.

Traders Mindset Exercises

Here are some exercises that traders can practice helping develop the common themes of a
successful trader's mindset:

Emotional Control
a. Mindfulness meditation: Mindfulness meditation can help traders reduce stress and improve
their emotional regulation. Start with a few minutes of meditation each day and gradually
increase the time as you become more comfortable with the practice.

b. Deep breathing can help traders calm their minds and reduce stress. Practice taking slow,
deep breaths whenever you feel stressed or overwhelmed.

c. Affirmations can help traders develop a more positive mindset and reduce negative self-talk.
Write down positive affirmations that resonate with you and repeat them to yourself regularly
throughout the day.

Mental Preparation
a. Creating a clear and detailed trading plan can help traders stay focused and make informed
decisions. Take the time to outline your goals, strategies, and risk management approach, and
review your plan regularly to ensure that you are on track.

33
b. Journaling can help traders reflect on their trades and identify areas of strength and
weakness. Keep a record of your trades, including what you did well and what you could have
done better, and review your journal regularly to identify patterns and make improvements.

Self-Awareness
a. Regular self-reflection can help traders identify their tendencies, strengths, and weaknesses.
Take the time to reflect on your trades and overall approach to trading and identify areas
where you can improve.

b. Seeking feedback from others can help traders develop a more accurate self-awareness. Ask
trusted friends, family members, or colleagues for honest feedback on your strengths and
weaknesses and use this feedback to improve.

Positive Reinforcement
a. Celebrating small wins can help traders develop a more positive mindset and reinforce
positive thinking. Take the time to acknowledge your successes, no matter how small, and
credit yourself for your hard work.

b. Gratitude journaling can help traders cultivate a more positive outlook. Write down a few
things you are grateful for each day and focus on these positive aspects of your life.

Mindfulness
a. Regular mindfulness meditation can help traders develop a calm and focused mind. Start
with a few minutes of meditation each day and gradually increase the time as you become
more comfortable with the practice.

b. Mindful breathing can help traders stay focused and reduce stress. Practice taking slow, deep
breaths and focusing on the sensation of your breath whenever you feel overwhelmed or
stressed.

c. Mindful movements, such as yoga or tai chi, can help traders cultivate a more mindful and
relaxed state of mind. Incorporate mindful movement into your routine to reduce stress and
improve your overall well-being.

These are just a few examples of exercises traders can practice helping develop the common
themes of a successful trader's mindset. It's essential to find the exercises that work best for
you and to make them a consistent part of your routine to see the most significant benefits.

34
Health and Wellness

I don't have access to personal medical information, so consult a healthcare professional before
making significant changes to your exercise or diet routine. However, here are some general
tips that can help traders prepare for the trading day from a health perspective:

1. Get enough sleep: Lack of sleep can lead to decreased mental clarity and impaired decision-
making abilities. Consider using biometric devices like the Oura Ring to track your sleep
progress and adjust as needed.

2. Stay hydrated: Proper hydration is essential for optimal cognitive function. Consider adding
electrolyte supplements, such as LMNT salts, to your water intake to replenish lost minerals
and maintain hydration.

3. Exercise regularly: Regular exercise has numerous physical and mental benefits, including
increased energy, reduced stress, and improved mood. Consider incorporating cardio,
strength training, and stretching into your exercise routine.

4. Follow a balanced diet: Intermittent fasting can effectively promote weight loss and
improve metabolic health, but it's essential to consult a healthcare professional before
starting. Add plenty of fruits, vegetables, whole grains, and lean proteins to your meals.
Consider adding gut health supplements, such as Athletic Greens, to ensure you get
adequate vitamins and minerals.

5. Take breaks: Sitting in front of a computer for extended periods can lead to physical strain
and mental fatigue. Take regular breaks to stand up, stretch, and move around.

6. Practice stress-reducing techniques: Trading can be a high-stress profession, so it's

essential to have strategies to manage stress. Consider incorporating meditation, yoga, and
breathwork into your routine.

Remember that every person's body and needs are different, so it's essential to find a routine
that works for you and consult a healthcare professional if you have any concerns or questions.

35
Suggested Morning Routine
1. Upon waking up, drink a glass of water with a squeeze of fresh lemon juice to help hydrate and
detoxify the body.

2. Spend a few minutes doing gentle stretches to help loosen up your muscles and get your
blood flowing. You can incorporate stretches that target your neck, shoulders, back, and
hips to counteract the effects of sitting for long periods during the trading day.

3. Practice some breathwork to help calm your mind and focus your energy. You can try
different techniques, such as diaphragmatic breathing, alternate nostril, or box breathing.

4. Spend some time meditating or practicing mindfulness to help cultivate mental clarity and
focus. You can use guided meditation apps or sit quietly and focus on your breath or a
specific object.

5. Review your goals and tasks for the day and create a plan of action for how you will
approach your trading activities.

6. Take a few moments to express gratitude and set your intentions for the day. This can help
you cultivate a positive mindset and maintain focus throughout the trading day.

Remember to tailor this morning routine to fit your own needs and preferences. Consider
adjusting the timing of your intermittent fasting window based on your personal goals and
preferences. The key is establishing a consistent routine that helps you feel energized, focused,
and ready to take on the day as a day trader.

Combat Conditioning for Everyone

Matt Furey is a former professional wrestler turned fitness coach who has developed a popular
training program called "Combat Conditioning." His program is focused on bodyweight
exercises, including two primary activities: Hindu Squats and Hindu Pushups.

Hindu Squats and Hindu Pushups are excellent bodyweight exercises that can help develop
strength, endurance, and flexibility. The Hindu Squat involves a full-body movement that helps
build leg strength and endurance, while the Hindu Pushup targets the chest, shoulders, triceps,
and core and back muscles.

Matt Fury's approach to fitness and training is unique, as he focuses on developing functional
strength and conditioning using bodyweight exercises. His program is designed to be accessible
to anyone, regardless of fitness level, and provides a challenging and effective workout without
the need for expensive equipment or gym memberships.

36
By incorporating the principles of Matt Fury's Combat Conditioning program and exercises like
Hindu Squats and Hindu Pushups into your training routine, you can improve your overall
fitness, develop functional strength and conditioning, and achieve your health and fitness goals.

Starter Program

Here’s a starter program that includes instructions on how to make the Hindu Squats and Hindu
Pushups exercises, as well as a suggested starting point and a way to progress after achieving
certain milestones:

Program Overview
1. Perform the program twice weekly on non-consecutive days (e.g., Monday and Thursday).

2. Start with one set of each exercise, and gradually work up to three sets over several weeks.

3. Rest 1-2 minutes between sets.

Exercise 1: Hindu Squats

Instructions:
• Stand with your feet shoulder-width apart and your arms at your sides.
• Lower your body by bending your knees and pushing your hips back like sitting in a chair.
• As you lower your body, raise your arms out in front of you to help with balance.
• Keep your weight on your heels and your chest up.
• As you reach the bottom of the squat, push off your heels and rise back up to the starting
position.
• Repeat for the desired number of reps.
Starting Point: 1 set of 20 reps
Progression:
• Add five reps each workout until you can perform three sets of 50 reps.
Exercise 2: Hindu Pushups
Instructions:
• Begin in a downward dog position with your hands and feet shoulder-width apart, your hips
in the air, and your head facing down.
• Lower your body by bending your elbows and lowering your chest towards the ground.
• As you lower your body, move your head forward and arch your back, leading with your
chest.
• Once your chest touches the ground, push up with your arms, arching your back and
returning to the downward dog position.

37
• Repeat for the desired number of reps.
Starting Point: 1 set of 10 reps
Progression:
• Add 1-2 reps each workout until you can perform three sets of 20 reps.
• Remember to focus on proper form and gradually increase the number of reps as you
progress. Over time, consider adding additional sets or combining these exercises with
other exercises to create a more comprehensive workout program. As always, it's essential
to consult with a healthcare professional before starting a new exercise program, especially
if you have any underlying health concerns.

38
Trader Manual Conclusion

A. Summary of the Strategies

In this manual, we have discussed two options trading strategies: the Zero Days Classic Fly and
the Zero Days Batman. The Zero Days Classic Fly is an options trading strategy that involves
entering a long OTM butterfly options trade after the markets open. The objective is to capture
the time decay of the options while managing risk through a trailing stop order. The Zero Days
Batman strategy is a market-neutral strategy that involves entering two OTM butterfly trades,
one above and one below the market, to create a hedge against market volatility. Both
methods aim to achieve asymmetrical returns by collecting premiums and optimizing the
trailing stop order.

B. Final Thoughts on the Importance of the Journaling and Review Process

The daily and weekly processes described in this manual are critical components of the Zero
Days Classic Fly and Zero Days Batman strategies. Keeping a journal and reviewing trades at the
end of each day and each week allows traders to continuously improve their performance by
examining market conditions, trade execution, and mental state. This journaling and review
process can also help traders identify patterns in their performance and adjust their strategies
to manage risk better and achieve better results. By incorporating this process into your options
trading, you can maximize your chances of success and become a more confident and skilled
trader.

39
Appendix

A. Glossary of terms
This is a very brief glossary of terms for the 0-DTE trader. If you want to examine a more
complete, near-comprehensive glossary of terms that every 0-DTE trader should know, click
here: 0-DTE Glossary.

OTM: Out-of-the-money

Butterfly Options: A multi-leg options strategy involves a bull and bears spread.

Real-time P&L break-even: The point at which the profit or loss on a trade is zero.

Break-even at expiration: The point at which the profit or loss on a trade is zero.

Profit tent: The area between the two break evens of a butterfly trade.

Trailing stop: A stop loss order that adjusts to the current price of an asset as it moves in favor
of the trader.

Retrospective: A weekly evaluation ceremony to review the trades and performance of the
strategies.

Market-neutral: A strategy that seeks to remove market risk by balancing equal long and short
positions.

B. Example journal entries

Date: [Insert Date]

Period: [Insert period]

The proximity of Price: [Insert proximity of price to the butterfly option]

Position: [Insert details about the trade, such as the number of contracts, strike price, etc.]

Max Profit Achieved: [Insert the maximum profit achieved during the period]

Optimal Trailing Stop: [Insert the optimal trailing stop for the trade]

40
Market Condition: [Insert rating based on the ABC scale, e.g., A, B, or C]

Trade Execution: [Insert rating based on the ABC scale, e.g., A, B, or C]

Trader's Mental State: [Insert rating based on the ABC scale, e.g., A, B, or C]

C. Playbook of best example trades

[Insert details about the best example trade, such as the date, period, price proximity, position,
max profit achieved, etc.]

[Insert details about another best example trade, if applicable]

D. Review forms and checklists

Daily review form

[Insert items to be reviewed daily, such as position, price proximity, max profit achieved, etc.]

Weekly review checklist

[Insert items to be reviewed weekly, such as the trades executed during the week, the
retrospection ceremony, etc.]

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