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Dec 2019 – TSLA $430-$415 Put Debit Spread

Stock
TSLA
Trade Structure
$430 - $415 Put Debit Spread
Trade Date
12/27/2019
Expiration Days
1/24/2020

Trade Rationale

I am reflecting back on this trade I did in late December. If you look at the chart and indicators, you will come back at me asking me why in the world did I take this trade? Read till the end to find out more.

Trade Selection Criteria

Overall market movement

Market just hit an all time high with SPY touching $322 for the first time.

No Earnings or Significant News

Earnings are behind us and were announced on 10/23. There is no significant news or earnings event during our trade cycle.

Bollinger Bands outside Keltner Channels

Bollinger Bands are outside Keltner Channels. We are not in a squeeze or low volatility period.

RSI Analysis

RSI is in overbought territory. Although, inconclusive and not giving any clear signals. 

ADX Analysis

ADX is very very strong and is not showing any signs of slowing down. Further, it is actually supporting the crazy bullish run that TSLA is experiencing.

Trade Analysis

This is a classic example of a "revenge trade". If you have been trading for some time, you will understand what I mean. Even after doing it for so long, I still have human emotions, and they don't do any good when it comes to trading. TSLA has not been kind to me in the last 2 trades. And now that I reflect on it, there was no reason for me to put on this trade, when my indicators were not lining up. The end result is obvious - I ended up losing on this one.
Trade Outcome
Loser
Profit/Loss
$350
Beginning Account Balance
$16,000
Ending Account Balance
$15,650

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