In this post the question was answered about anyone’s ability to predict markets – and what is the actual reality of it. So again, it can seem like someone with a lot of experience and competency can predict, but it is actually just about working hard, doing great preparation, and PLANNING out your trades – AHEAD OF TIME. So today with an SPY call trade, look at all of the work, preparation, and planning I did for the trade in the SPY. All discussed IN DETAIL for you written up intraday on the charts.
First, in the premarket today I included the following SPY chart #1 CLEARLY marking off the res area – 267.04. That was a pivot area of some sort to me, some kind of a trade would set up for me based around that. Now, there was a solid daytrade selloff from that res. Anyone who is working hard at this, who trades options, who listens to me, could have had themselves a nice potential short-side trade based off of my included chart.
For myself, I did not get the setup that I wanted on the upthrust, so chose to use it in a different manner. My analysis of the overall situation was not that great, BUT my analysis of the thing which matters the most, by far, the analysis of the trade setup – how, when, where – was outstanding. Initially discussed on chart 2. LOOKING FOR A DIP SETUP. Preparing – AHEAD OF TIME – for a potential setup. I did not know if it would set up, but I was looking for a dip-type setup.
So I waited, watched, observed, look at chart 4, QQQ. APPEARS TO BE REACCUM, LOOKS LIKE A CUP/HANDLE, and I stressed, short-term. That analysis was excellent. It helped me to believe that the gap low supp would hold, and chart 5 put on the SPY calls, got lucky and bought the LOD. The parameters were worked out ahead of time, per usual, 20% stop, and so with the 20% rally sold 1/2 per usual, moved up stop to scratch per usual, discussed chart 6.
Chart 7-9, kind of hard to read, discussed SPECIFICALLY the nuances of working with option premium in real-time during intraday movements – the premium erosion – how to deal with it, knowing that the HOD in the SPY will equate to a lower call price. Also discussed – looks like a good close coming up, so should I hold or sell or sell part – discussed in detail specifically how I would approach it – PLANNING AHEAD – what I would do, wanted to see AAPL get thru and close thru 175, it did not, so sold 1/4 in ah, and held 1/4 position overnight.