Trade Journal Qs 20060724
Trade Journal Qs 20060724, originally uploaded by Gare and Kitty.
If you can see the little yellow circle on the left side of the peak, you can see where I entered a position in Qs puts around 1130am. I watched the market on and off until about 1320 (120pm). At that point I felt content to walk away since the Qs had fallen through two lines of support and was channeling nicely. However, today I was to be fooled by the market once again.
You know, I have a habit of really putting in the time to analyze the market AFTER I trade. For example, the past two blog posts about moving averages. I was also unequipped to use the nastick and nastrin indicators during the trade. I simply forgot how to interpret them. I also didn’t look at the first hour trading range. I did trade based on the daily pivot points though. I bought in when the Qs were at 36.19.
So today was a huge up day. I thought I was buying just after potential top of the day. It turned out the just after I left the chart, the Qs broke through the trendline channel I had drawn. Totally blindsided. My only consolation is that the weekly moving averages are still moving down in parallel.
Also, one of the last things that I saw on the Darlene Nelson videos I watched was that the at the money options have the highest implied volatility. This contributes to an options price. She sad that the implied volatility is highest in the options at the money. As soon as the price of the underlying instrument, in this case the Qs, the implied volatility goes down and some of that value is lost. In this case the option I bought was at approximately 24 when I purchased it. Now its at about 21.