The weekly chart was in uptrend and the Trading Apgar test was below 4 points. This trade had a bad setup and bad entry point.
Trade Overview :
- Company: Facebook (FB)
- Strategy: Double Diagonal to Short
Reason for entry
When the trade was placed, the price was around $133.50.
Weekly chart is showing up-trend but daily chart is showing weakness. Setting up a Double diagonal to catch a quick profit trade. Some cushion is incorporated so even if the stock goes up few dollars it will be fine. As long as it does not shoot up too much.
|Reason||Long term chart is showing down turn. Expect it to keep going down a bit more.|
|Action||FB DBL DIAG sell135/buy145 Call, buy130/sell125 Put 21 APR 17|
|Short Squeeze Float %||1%|
|Exit point lose||$ 350|
|Max win||$ 910|
|Early exit point||$ 550|
|Good / Bad (exit point)||Good Trade|
|Money held||$ 2,573|
|Prob lose ITM||40%|
|Prob win ITM||60%|
|Rward ratio (based on money held)||35%|
|Good / Bad (money held)||Good Trade|
|Win / Lose overtime (exit point)||53.2|
|Win / Lose ratio||$ 0.15|
|Win / Lose overtime (max lose)||483.20|
|Win / Lose ratio||$ 710.59|
Trade Apgar Test
Any trade with Apgar test score below 6 should be avoided.
|Weekly Chart||EXP MA||0|
|Daily Chart||EXP MA||1|
Trading result and after thoughts
It reached to the early exit point and got stopped out. As of today (3/10/2017) the stock price is at $138.79, which is way beyond the stop loss point. I am glad I got out at the early stop point.
At the time of this trade, I did not have Trade Apgar Test in place and it clearly indicated this was not an ideal trade.