Thesis Did not pay attention to TA at all. Stock doubled in price today, causing extreme rise in IV pricing on options. Opened a debit calendar spread to take advantage of high IV.
Discovery Looked at trending tickers for the day.
Correlation N/A
Entry +2 7.00C Feb 24 @ 1.48 -1 5.00C Feb 10 @ 1.61 (12.95 fees)
Spread was not configured to correctly take advantage of short vega and was more or less a long position with limited downside. Unfortunately, price retraced 30% against me; position remains open as I intend to close it closer to the expiry date.
Of note, the short 5C is 90% profitable - it might be prudent to BTC this leg and collect profits on it, then wait for a reversal to the upside.
Trade closed: stop reached
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BTC the short leg at a small profit on that leg; the 2 contracts on the long legs lost money, net P&L is -$120.
@mikemuffin, I find my biggest thing is to learn to not take trades. It's very easy to trick yourself into doing a "small and quick" trade or something last minute without properly setting it up. Avoiding losses is more important than hitting wins imo
@Intraday_Latte, Not sure. At best, my trading system is supposed to enter when it crosses the baseline & has confirmation, then ignore the day to day noise until the trend plays out. I don't really pay attention until the stoploss or take profit is hit.
However, I didn't follow any TA for this trade and it's options based, so it's pretty much a lost cause at this point. I'm going to close my short leg and just expose myself to long gamma for Friday a lottery ticket. Not great though, it has to basically hit $6.00+ to break even.