Roy - INTC Post-Mortem
Thanks for your feedback on my trade. Here is my analysis. Please correct me where I am wrong.
Situation: I traded a weekly put on INTC and went down in a total loss. Fortunately, the damage was not too severe. The risk was acceptable, given my perception of the potential reward if it did indeed retrace.
Roy, these are the TA reasons I went into the trade, knowing well it was risky:
- INTC had gapped up hugely on Thursday PM. Generally, such a huge gap will retrace. Even if it was the result of legitimate good news. My error was assuming it would retrace on Friday, and it didn't. Therefore, my error is in recognizing the likely timing of the reversal. I still think it will reverse, but not sure when. Now betting on a retrace within the next two weeks. (JMHO - feel free to disagree).
- 1st lesson learned: I need to better analyze when to place a swing trade vs a day trade. I am generally pretty good at recognizing a potential reversal, but not at predicting WHEN it will occur. In this case, I thought that at 9:45 (ET) or so, that INTC was starting the retrace. It held steady for the rest of the day, while Theta ate my lunch.
- 2nd lesson learned: The stock started a small retrace around 9:45 (ET), but it was too small of a signal to be significant. It only lasted about 3 minutes. I need to distinguish better between signal noise, and an actionable trading signal in TA.
- 3nd lesson learned: Did not exit the trade when it didn't pan out. By that time, THETA had already finished my sandwich and had started on my cookies too. Too late to recoup it.
I still think INTC will retrace at least half of that gap soon. I have another small, but longer term Put on INTC for when it does.
As always, I value your insights.
Jane
