Excel Spread Sheet Statistics and the IWM
I am still testing my Excel Spread sheet. BUT hey, so far so good.
Basic thoughts on Statistics
With calculating expected moves on a stock by calculating the mean profits per day for a certain term we know where we expect the price to be based on history. Now you also can only add the positive days, or for the sake of this exercise take only negative days, and we receive what I call worst case scenarios. Then we can also calculate the Average True Range of an asset and generate a 4 week price target of that. When you look at AFTER 4 WEEKS in the image we have three prices. Then we generate the average of this and have a price target where the stock SHOULD NOT BE within 4 weeks! Then we subtract the current price of the underlaying from that and we get the Deviation from the price. We then look up how many times in the past year a deviation of 18 from the price was hit within 4 weeks and calculate the probability of those occurrences. The calculated deviation of the STRIKE of the short call was hit 3.08%. This means that when you write a call option at that level your win ratio is about 97%!
Remember, you can make money when you can predict where the market will NOT be. Sell Lottery tickets or insurance contracts.
Sell a Put when volatility is higher
The reading for a short put in our sheet is as follows. We see the short put price at $172, the $26 deviation from the current price was hit 3.36%. The average price of the three prices above was hit too often so that I reduce the average price to 96% to receive a similar probability of 3.36% like with the call option.

Considerations about ATR, HIV
You should sell options when the volatility is high and you let them either expire or buy them back at a lower price and so you make a profit. When implied volatility is low you might better buy a Put option at the money because they tend to be cheaper with low volatility.
Another consideration is the ATR and Historical Implied Volatility. If the ATR crosses above HIV the stock tends, not always, to move upward and vis versa. This also can be expressed in numbers. By itself it is not a trade signal.

More to consider
You can also calculate how often in the past 5 days the volatility was below current volatility to get a trend, a call out. We generate a trigger level that also must be met, above we sell short, below we go long.

And of course there is the RSI.
For selling Puts the RSI should be above 70, the upper level or below 50. Remember alone this doesnt make any sense but when we combine all those conditions in a logic inquiry we get some call out.

All the requirement that must be met are these. Today after closing all conditions for a long Put were met. =AND (ATR/HIV, IVP 1WK/IVP 4WK, Trigger > IVP 1WK, OR (RSI <50, RSI>= 70))
Lets see how this all develops. And of course I might change the calculations, but for now lets make some money.