Swing and Position Trading Models Lesson

In this lesson, you’ll discover how swing traders and position traders can leverage institutional-grade data to overcome their unique challenges. Unlike day traders who monitor charts constantly, you might only check the market once a day while balancing work and other commitments, making timing and risk management critical to your success.

The biggest challenges you face as a swing trader include getting in too early and being stopped out before real moves begin, or chasing trends by entering too late without adapting to volatility shifts. As a position trader, you risk holding positions through major macro regime changes without realizing the risk has flipped, often confusing low volatility with low risk and missing critical institutional flows that could impact your portfolio.

Many traders treat the market as static, setting fixed stops and targets while assuming conditions remain constant. However, the market is dynamic—volatility changes, flows shift, and positioning evolves. Without adapting to these changes, you’re essentially trading without context. For example, you might be long Apple with stable price action and low volatility looking safe, but the Mentor Q dashboard could reveal that implied volatility is actually increasing, the Q score option has shifted from bullish to bearish, there’s big negative positioning, and dealer gamma is turning negative.

We provide specific tools to help you make data-driven decisions. The swing trading levels help you identify upside targets that haven’t been reached yet, preventing you from cutting winners short. You can monitor the Q score for both momentum and option signals to stay in trades with confidence, check the skew to understand if you’re in a call bias or sell bias environment, and use net gamma exposure to identify the biggest levels across the option chain. The gamma shift level helps you understand where dealer hedging behavior changes, while the volatility risk premium (VRP) shows whether implied volatility is high or low compared to historical shifts.

Practical examples include using Tesla’s swing model levels with their success rates—if price reaches 458 and historically moved lower on 73% of cases five days in the future, you can use this as your target. You can monitor multiple expiration dates across the option chain, check if the VRP is at the highest level over the past three months to determine if premium is expensive, and use levels like the 400 level and 352 gamma shift to manage your position sizing and risk.

Video Chapters

00:16 – Introduction to swing and position trading challenges
01:37 – Why traders treat markets as static and the dynamic reality
02:02 – Apple position trading example with Q score and dealer gamma
03:06 – Microsoft swing trading example using levels and skew
05:07 – Tesla analysis with Q score, net gamma exposure, and swing models
06:59 – CRM example showing bearish signals and volatility risk premium

Key Takeaways

The Q score tracks both momentum and option market signals to help you understand when bullish or bearish bias is changing
Swing trading levels provide specific targets with historical success rates, helping you hold winners longer instead of taking profits too early
Dealer gamma and net gamma exposure reveal institutional positioning and the biggest option chain levels that could act as support or resistance
The volatility risk premium (VRP) shows whether implied volatili…

Video Transcription

[00:00:16.05] - Speaker 1
Next we're going to quickly over swing traders and position traders. Right. So now let's talk about swing traders and long term position traders. These are really different from day traders or interday scalpers because they actually might. So if you're a swing trader or a position trader, you actually might not be glued to the, to the chart.

[00:00:38.07] - Speaker 1
You might actually look at the data once a day. And basically you're not, you don't have time, so maybe you're working and you don't have really enough time to potentially look at the market every day. So we still have a solution that can be very, very important. So for swing traders the biggest challenge is that you're getting in too early and you're stopped out before the real moves begin or you get in too late and you chase the trend. And basically you don't really adapt to volatility shifts.

[00:01:07.08] - Speaker 1
If you're a position trader, you're actually, you're not trading every day, but you are holding your position through big macro regime changes without actually realizing that the risk has flipped. And again you confusing low volatility withdrawal risk and you don't account for, for institutional flaws that could change the situation of the asset that you have in your portfolio. Right. So very, very important.

[00:01:37.24] - Speaker 1
So the, the other challenge is that swing and position traders usually usually treat the market as static. So they set a fixed stop, fixed target and assume that the market is always the same. But the truth is that the market is dynamic. Volatility changes, flow shift and position changing. So if you are not adapting, then you're basically again trading without a context.

[00:02:02.02] - Speaker 1
So let's go through a very quick example and you are long Apple as a position trademark. Volatility is low and everything looks good. You know, price action is stable and everything feels safe. But then you open up the Mentor Q dashboard and you see that implied volatility is actually getting higher. So it's actually increasing.

[00:02:25.05] - Speaker 1
The Q score option as we showed you before goes from bullish to bearish and we see a big, big negative positioning and dealer gamma is turning into negative. So on the surface just by looking at the chart, everything looks good. But underneath market is actually looking very fragile. So we see a headline, a flow shock, it's Apple and we are selling off and your position takes a big hit. Right?

[00:02:51.14] - Speaker 1
So with Mentor Q again you could have monitored this. You could have seen the come before the storm and either hedge using options or maybe rebalance your portfolio and protect your capital.

[00:03:06.27] - Speaker 1
Next example is you are long Microsoft and you're looking for a Swing trade, the move has been strong, so you're tempted to take profits early. Right. So you are making good return, but you actually want to take profit because you don't want to risk to lose money on your trade. Again, what can you do? You could actually use the mentor queue swing trading levels to potentially look for an upside target that has not yet been reached.

[00:03:30.15] - Speaker 1
You could actually use the Q score and if you see that we are bullish on both the momentum and option score, then that could be a good signal for staying in the trade. Or you could also look at the skew to understand if we are in a call bias or sell bias environment. Right. So instead of cutting your winner short, you can actually hold your trade with confidence. And again, using data to potentially trade and better manage the risk.

[00:03:58.01] - Speaker 1
So here is really what we can do for swing traders. So swing traders struggle with timing. Mentor Q can actually give you some level and some signals, some entries and exit. Position traders struggle with understanding what's going on and what's moving the market. So they lose money sometimes because they don't really understand risk.

[00:04:18.25] - Speaker 1
So again, this is really how you can actually trade. Like a professional, not guessing, but actually looking at data and how to use the models that we provide. Right, so now we're going to go into a short example and then I'm going to close it up with questions because we have FOMC coming on very soon. So I don't want to take too much of your time, guys. All right?

[00:05:07.14] - Speaker 1
Okay, so we're going to look at a couple of examples. So we're going to look at Tesla again. First thing is go again with the Q score. So we are seeing that we are in a very bullish bias on Tesla both at the momentum level, at the option level. And we also see a positive, a positive seasonality score as well.

[00:05:29.02] - Speaker 1
We want to monitor our net gum exposure. So we want to look at the whole option chain and we want to see where the biggest levels are. So we are now targeting 450. We need to be aware of also this 400 level here is very, very strong. And also we have to look for our gamma shift, which is a 352.

[00:05:48.27] - Speaker 1
You can also look at different expirations. So you can also see how this moves throughout the chain. Right. Very, very important. And then we want to look at our swing model.

[00:06:00.00] - Speaker 1
So we want to look at where the levels are. We want to look at the success rate of the models to potentially either build position or manage your position. So if you are already in a Tesla trade, you could use this level to potentially use them as target. So let's say that you are in a long term position on Tesla and The price goes to 458 on 73% of the cases. The price moved lower five days in the future.

[00:06:28.04] - Speaker 1
So this could become your target and you can see how that can be respected there. If you then want to play the stock with more like advanced strategies, you can look at the volatility risk premium. We see that is very high. So implied volatility of Tesla currently is very high compared to the historical shift. So if you are comparing implied volatility with historical volatility, the VRP is actually at probably one of the highest level it has been over the past three months and maybe longer.

[00:06:59.17] - Speaker 1
So again just monitor that within your volatility and then again use the Q score to potentially look for trade ideas or potentially look for managing risk. So for example, another example is, let's go back to CRM. If you were holding CRM in your portfolio, then you can now see that we are in a very, very bearish environment coming from the option market, coming from the momentum and, and you could use also these levels as your, as your level. So if the price were to breach this 229 level then we are in a really dangerous zones. If the upper band resists then maybe we could actually flip to the upside and if we see positioning change on the next few days and weeks then we can see how we can maybe, maybe the narrative has changed.

[00:07:50.17] - Speaker 1
Right. If you look at the volatility, we're now in an undervalued IV stage. So the implied volatility and the volatility risk premium is actually quite cheap compared to the past three months. So maybe buying premium could be a better strategy than selling options in this case.