- Did not have a gameplan for exit.
- Did not have a gameplan for exit.
Trade 1 Mistakes: DID NOT HAVE GAME PLAN FOR EXIT. I did not trade based on the charts. I traded based on arbitrary dollar amounts in option price. Again. While I was profitable and did well in protecting a portion of my paper gains, I missed out on 95% of the upside potential of this trade. Had I traded the price action of the underlying and had conviction in my analysis, which was solid, I could have captured a larger piece of the move. I had levels in place and price action followed those levels beautifully, but I wasn’t there for it. While I have some empathy for myself and my paper handedness considering this is one of the first trades I’ve taken of an option this size, and the first time I’ve been in a live trade watching contract fluctuations of this size, I should have had more faith in my technical analysis and traded based off that analysis. I’ve done work now to prepare better beforehand and be aware of what normal fluctuations in the option price will look like. To be sure, more experience feeling those fluctuations will be necessary, but the mental prep beforehand of being able to go into the trade knowing the extent of fluctuations I might be exposed to will help me maintain my nerve through them and trade based off the technical analysis of the underlying issue.
Trade 2 Mistakes: HAD NO GAME PLAN FOR EXIT. GREAT FOR ENTRY NOT FOR EXIT. Again, did not trade the charts, and got shaken out. My logic was I was green on the day from the last trade and did not want to risk giving anything back, so the second I was in the green on this trade I exited to protect my profitable status for the day. (On further examination I could have interpreted this massive spike of volume on which I entered as a potential blowing off top and proceeded more cautiously