Updating on 4/18
I went back to 4/7, and I don’t have an analysis for this, for some reason. I have a vague memory of using the sizzle index since I couldn’t find anything in my screener, seeing something I liked, running the numbers, pulling the trigger and thinking “I need to journal this”, so this must be that.
Looking at the chart from that day and surmising my thought process from that, price had been trending up for a month and was a fairly strong resistance area. I (may have) gotten to it late because I see a break of that resistance area, but with a nice retest. Looking at the hourly chart, coupled with what I have listed as the underlying price in my calculator, it looks like I wanted to get on this on the way back up from the retest, but not necessarily on the highs of the breakout. At some point during the day, price pushed up and triggered me into the trade at $4.50
Underlying Price – $28.90
Underlying Target – $30.00
Strike Price – $25.00
Premium – $3.80
Exit – 4/22 @ $3.50
I held this for a total of 15 days, hoping that it would make another push up and out of the base it initially broke when I got in. Unfortunately, though, that never happened. I was as patient as I could be; but this morning, price actually pushed down through the lows of the base and is now making new lows. I got out right as price broke those lows, but looking at the price I got out at, my stop loss was about to trigger anyway, so it was a strong exit. I got out at $3.50, so I lost the full 1R, but that’s just my max loss for a trade, and these things are something I’ve got to live with.
I’m more comfortable now with it than I have been in recent memory. Kind of feeling like I did back when I was successful at Forex. This one just happens to be a loss, and it means the big win is coming. The only major takeaway I have from this trade is that I need to not hold for as long. Come up with my exit date and stick to it, otherwise I’m losing Theta in the option, Time Value. If I got out before, this full loss could’ve been a .5R loss or less. Definitely need to pay more attention to that going forward with options. I won’t have to worry about it as much with pure stock plays.
