COIN - Further Lows On The Plate
Updated
The last chart i COIN I showed you (see linked) was a nice play. Will this one cooperate too?
Let's analyze the chart:
The white Fork's CL was reached.
It came down hard and fell beyond the L-MLH.
We see the orange Fork, a pullback Fork.
Price struggled to jump above it's CL a view days ago, and now opened and closed below it, AND below the white Forks L-MLH.
Because I want to give this trade a little room, I initiated an Options Strategy by combining Short & Long Spreads.
You can see in the Black Window (Graph), there is plenty of room to let it go against the initial idea.
The B/E point is at the $85 short Call.
When time passes and price would stay exactly where it is now, the position would create a little profit.
If price is going up and stays between the horizontal line (yellow Arrow in the Graph), we profit.
If price of COIN starts to fall, we make profits along the dotted white line.
So, what's the benefit of this trade?
Why not play it directional by just shorting COIN?
1. There's a time decay involved.
My short Call-Debit-Spread generates money, every day by decaying in value.
2. There's the directional aspect.
If price cooperates, then the position profits from the "right" movement AND 1.
Downside?
If price MOVES (it HAS to move) in the wrong direction above $85, then I loose with both positions.
Luckily I can manage this options strategy when ever I want. I can open and/or close Spreads, I can add or remove Legs in favor of my position. I can add Stocks Long OR Short.
Too complicated?
I learned, that success does not just come from a 1-Trick trading Setup/System. If you want to survive in to-days markets, you have to learn, adapt and never stop this process.
I personally like to have as many possibilities to skin my Cats as possible.
I'm a Nerd, a Tr8dingN3rd and I live for what I do §8-)
Let's analyze the chart:
The white Fork's CL was reached.
It came down hard and fell beyond the L-MLH.
We see the orange Fork, a pullback Fork.
Price struggled to jump above it's CL a view days ago, and now opened and closed below it, AND below the white Forks L-MLH.
Because I want to give this trade a little room, I initiated an Options Strategy by combining Short & Long Spreads.
You can see in the Black Window (Graph), there is plenty of room to let it go against the initial idea.
The B/E point is at the $85 short Call.
When time passes and price would stay exactly where it is now, the position would create a little profit.
If price is going up and stays between the horizontal line (yellow Arrow in the Graph), we profit.
If price of COIN starts to fall, we make profits along the dotted white line.
So, what's the benefit of this trade?
Why not play it directional by just shorting COIN?
1. There's a time decay involved.
My short Call-Debit-Spread generates money, every day by decaying in value.
2. There's the directional aspect.
If price cooperates, then the position profits from the "right" movement AND 1.
Downside?
If price MOVES (it HAS to move) in the wrong direction above $85, then I loose with both positions.
Luckily I can manage this options strategy when ever I want. I can open and/or close Spreads, I can add or remove Legs in favor of my position. I can add Stocks Long OR Short.
Too complicated?
I learned, that success does not just come from a 1-Trick trading Setup/System. If you want to survive in to-days markets, you have to learn, adapt and never stop this process.
I personally like to have as many possibilities to skin my Cats as possible.
I'm a Nerd, a Tr8dingN3rd and I live for what I do §8-)
Note
Price got rejected at the Action/Reaction line.The position looks OK. But we have to observe how it behaves at the orange CL.
If it can't get through, then we have to be cautious.
Note
It's super hard for COIN to get through either Support or Resistance.So far the A/R resistance wins. It's very, very delicate with all the news around BTC & the company.
Note
Open & Close was below the orange CL.Super bearish now.
Note
So, I took partial profit. Now we have price on dump down to the Center Line of the red pitchfork:
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