Using Structural Levels to Time Entries and Exits

Structural Levels as a Trading Framework

Structural levels give you something most technical analysis lacks: a reason for why price should react at a specific point.

A moving average is a mathematical artifact of past prices. A structural level is a physical reality of current positioning — there are real contracts, real dealers, and real hedging obligations behind every level GammaLens calculates.

This doesn't mean levels are guaranteed to hold. But it does mean you're trading with information about where real forces exist, not just where lines cross on a chart.

Timing Entries with Structural Levels

For long entries in a positive gamma regime: look for pullbacks to high positive GEX strikes below spot. These are levels where dealer buying should provide support. The stronger the GEX at that level, the more confidence you can have in the bounce.

For short entries or profit taking: the call wall is your target. As price approaches the CW, dealer selling intensifies. This is where rallies tend to stall.

For breakout entries: watch for price approaching levels where GEX transitions from positive to negative. If price pushes through with volume, the lack of stabilizing gamma means the move is more likely to extend.

Always confirm with the regime badge — entries against the regime require higher conviction.

Exit Framework: When Structure Tells You to Get Out

Structural levels are even more valuable for exits than entries:

Take profits at the call wall if you're long. Don't hope for more — the structural resistance is real.

Tighten stops if the regime flips. If you're long and price drops below zero gamma, the positive gamma cushion you were relying on is gone. The character of the market just changed.

Exit immediately if the put wall breaks. In negative gamma, a broken put wall means there's no structural support until the next major level. Moves accelerate in this zone.

The key principle: let structural levels define your risk, not arbitrary dollar amounts or percentages. A $2 stop might be too tight above the put wall (where support exists) and too wide below it (where moves accelerate).

Position Sizing with the Expected Move

The expected move gives you a natural framework for position sizing.

If the daily EM is ±$5, and your max acceptable loss is $500, you know you can risk approximately 100 shares (or equivalent options delta). This is more sophisticated than fixed-dollar stops because it accounts for the current volatility environment.

Scale up in positive gamma (moves are dampened, your stops are less likely to get hit). Scale down in negative gamma (moves are amplified, whipsaws are more common).

The expected move also helps with options strategy selection. If EM is ±2% and you're selling strangles, you want your short strikes outside that range with some margin of safety.