So now that you know what I am waiting for, I'll tell you a couple of things about this strategy. Sometimes, the move I am waiting for ends up happening in between sessions. For example, if tomorrow NFLX gaps up and opens near the upper Channel, I wouldn't take the trade because the move I was hoping to capture with the long call already happened. I am looking to ride the long call as the stock steadily moves itself across the channel until it reaches the upper or .
Another thing that could happen, is price could fall past the lower . If that happens, it invalidates the trade (at least for me it does) and I would wait for the price to come back between the lower and channel so that I'll be ready to try again it crosses above the lower channel at that time.
Note for Options Traders: I usually try to buy calls with this setup, but I almost always experience a period of sideways movement which end up hurting the long call. To avoid the negative effects of theta decay, you can substitute the long call with a put credit spread since put credit spreads benefit from theta decay making them cheaper to buy back.
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