XSP 5 DTE Combo: Safe & Aggressive

Strategy Document: XSP 5 DTE Trend-Follower
Objective: Systematic capital growth using weekly XSP (Mini-SPX) Options while maintaining a high-interest cash reserve.

1. The Core Philosophy
The strategy is built on three pillars: Directional Trend Following, Volatility Filtering, and Capital Preservation. Unlike "Buy & Hold," this system only risks capital when the market shows clear momentum. By using XSP Options, we gain leveraged exposure with a defined maximum risk (the premium paid).

2. Capital Management (The 70/30 Rule)
70% Safety Reserve: Held in low-risk, interest-bearing instruments (e.g., US Treasury Bills or Money Market Funds). This acts as a collateral base and generates a steady 4–5% yield, offsetting trading costs and providing a psychological "anchor."

30% Active Trading Capital: Used for purchasing XSP Options.

Scaling: Start with 1 contract. Increase position size by 1 contract for every $10,000 of account growth.

3. Execution Rules
Trading Day: Every Thursday.

Entry Time: 15:30 – 16:00 CET (Wall Street Open).

Instrument: XSP Index Options (Standard Delta 50 / At-The-Money).

Expiration: 5 Days to Expiration (DTE) – typically the following Tuesday.

Exit: Hold to expiration (maximum gain) or close manually at +100% ROI.

Technical Script Description: "ATR Pro Trend Combo"
The Pine Script (v6) serves as a binary gatekeeper. It suppresses trades during low-probability environments and highlights entries during high-conviction trends.

Key Indicators & Logic:
Trend Filter (EMA 50): Determines the "Primary Trend." We only buy Calls if the price is above the 50-period EMA, and Puts if it is below. This prevents trading against the institutional flow.

Momentum Switch (SuperTrend): Acts as a trailing volatility-based confirmation. The script requires the SuperTrend to align with the EMA direction (Green for Calls, Red for Puts).

Volatility Threshold (ATR): Filters out "flat" markets. A trade is only signaled if the current Average True Range (ATR) is at least 80–90% of its long-term average. This ensures there is enough "swing" in the market to overcome the Theta (time decay) of the options.

Seasonal Overlay: An automated hard-stop for January and September, months that historically exhibit high randomness and trend reversals.

Multi-Mode Functionality:
Safe Mode: Uses a tighter 2.0 SuperTrend multiplier and 0.9 ATR threshold. Best for accounts under $15,000 to maximize Capital Preservation.

Aggressive Mode: Uses a 2.5 multiplier and 0.8 ATR threshold. Increases trade frequency to accelerate compounding once a capital buffer is established.

How to use this in TradingView:
Copy the latest code provided into the Pine Editor.

Add to Chart and ensure you are on the Daily (1D) or 4-Hour (4H) timeframe for the best signal quality.

Check the Dashboard on the top right for the current Season and Trend status before executing your Thursday trade.