Do us both a quick favor and pull up my Boiling It Down post from just days ago. Got it? OK, good. Now please look at this chart:
“What’s this all about, Tim?” you ask. Fair question!
Yesterday, I bought puts on NFLX (Netflix), the chart whose minute price bars are shown above. If you’ll recall, the most important element of the “rules” I stated in Boiling It Down was “EXIT is based on the violation of that rationale“).
I bet you know where this conversation is going. You see, this morning, when the market was a bit strong, my NFLX position was showing a small loss. I was looking for something to trim, so – – I dumped NFLX at a tiny loss. Literally SECONDS later, it began a free-fall. The puts were up 23% in no time. (And these were January puts, not some crazy YOLO thing with no time premium). So I’m trying to avoid whimsy? I whimsied the shit out of this thing.
Thus, my desire to avoid “whimsy” failed yet again. I will say that in spite of all appearances, I get precisely zero joy from sharing tales of supreme screw-ups like this (although AAPL, which inspired Boiling It Down, was literally ten times worse). It’s just that I’m inclined to be honest and forthright unlike, oh, say, virtually everyone else out there talking about their trading, so I figured I’d tell you about this latest fumble, particularly since the trading gods decided to do something that hardly EVER happens, which is to have some major corporate announcement in the middle of the goddamned trading day.
Here, by the way, is the daily chart of NFLX, which looks like it could plausibly fail its channel, at which time I shall jump head-first into a vat of human waste.
Same old, same old. Brilliant chartist. Donkey-sucking trader.
