Lesson: How I determine when to exit a trade.
First before I enter a trade I come up with a complete strategy, if I’m entering calls, I’m looking for the stock or ETF to go down and find support, so I choose my entry in advance, I do the same with my exit strategy. Once I know my cost to purchase the option, I determine where I think the ETF or stock will go to and determine the value of my option in order to sell on a spike or a dip, let me give you two examples.
The first example, micron, last week I mentioned I was grabbing some puts on Wednesday, there was bearish divergence, the price was around $55, and they put premium was extremely high, telling me the stock was likely to go down. So when I entered at $55.30 the stock actually went about $.30 higher and my position started down, I was not worried as I had a strategy.
My exit strategy was when the stock would go down to $52.50, the stock actually dropped to $51 the next day, but I was happy with my trade as my strategy was executed.
One more example, when I entered into AFRM calls, the stock was $17.14 and my exit strategy was $20. Affirm went as high as $22 before earnings, so I did not secure max profit, but I executed a hell of a profitable trade.
Lastly I receive a lot of messages, people telling me they left a lot of money on the table, I am 100% guilty of that as well, but I understand risk versus reward, and I like to lock up profit as often as possible. I’ll take consistency and base hits versus those home run traders all day long.
The first example, micron, last week I mentioned I was grabbing some puts on Wednesday, there was bearish divergence, the price was around $55, and they put premium was extremely high, telling me the stock was likely to go down. So when I entered at $55.30 the stock actually went about $.30 higher and my position started down, I was not worried as I had a strategy.
My exit strategy was when the stock would go down to $52.50, the stock actually dropped to $51 the next day, but I was happy with my trade as my strategy was executed.
One more example, when I entered into AFRM calls, the stock was $17.14 and my exit strategy was $20. Affirm went as high as $22 before earnings, so I did not secure max profit, but I executed a hell of a profitable trade.
Lastly I receive a lot of messages, people telling me they left a lot of money on the table, I am 100% guilty of that as well, but I understand risk versus reward, and I like to lock up profit as often as possible. I’ll take consistency and base hits versus those home run traders all day long.
everybody is welcome to join my YouTube live stream, tomorrow morning, Monday and every day this week at 8:30 AM as they provide pre-market analysis and a quick strategy session
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