Day 1 – 28 Nov 2017 : Entry
- GOOGL broke the mean on the first hour of market open. The wave indicator at that point was around 1.7.
- This is a directional bullish trade. To reduce my exposure, I opened the Bull Put Spread for 4.00 credit per contract when GOOGL was trading around 793. The BPS gives me positive Theta if it stays above 780.
- I made the entry just before lunch time at 11:30am US EST and went to sleep. Then GOOGL started to decline around 2pm US EST, just after lunch time.
- This trade will have a higher probability of winning if it closes above the mean.
Day 3 – 30 Nov 2017
- GOOGL was still trading and closed at the mean on 29 Nov 2017, so I left the trade open.
- Today it started to decline and it came with volume. So I decided it is time to cut the loss and close the trade.
- This is losing trade, nett loss of $140.56.
- The wave signal indicator not strong enough. For expensive stock like GOOGL, wave indicator should at least crosses 5.0.
- For directional trades that will be carried over more than one day, it is better to make the entry on second half of the market, best during last trading hour.