How is your trade going? The weekly chart is heading south, but I would not be a bit surprised to see it move back up a bit shortly. It will be interesting to see where DXCM finishes on May19!
I did something smart but followed with something dumb: I still have Dec calls (no earlier calls) instead of took all my profits and ran . My rationale was I wanted to give the longer expiration trade time to play out. I think the market is going to take it down further. I can see it from reading up on the company's recent actions and competitive pressures. You saw it from reading the charts also. The near term question is whether $70 is a support or is it $60, $50?? I hold the underlying with a low cost base, and I did what Handle123 taught me prior: I added to my position from profits I made in trading options on it. Longer term, I believe their product will continue to be successful and it looks to me their growth still have legs, so I am willing to wait it out. My overall results this year beat SPY but in a bull market anyone who leverage will do better than the underlying/indices so it is not competency or trading prowess. My methodology will get me in deep trouble in a bear market so I need to learn something new, fast. Do you have more comments and view on this? Thanks and best wishes.
Golden rule for trading or investing, is "never take advice from anyone" You are always better off to trade off the charts, be it for daytrading or investing. The problem with trying to guess where price will go, within a certain time frame, is that there are way too many variables that can change things, just like the weather can change even though past predictions can show accurate forecasting for up to 3 to 5 days! Example. The chart I posted with the blue box is the expected range for the 75 call from post date to expiry, which is May19. As you can see, we have taken out the LER, so these expected ranges are just that, nothing more. They are handy for a reference point, but, the charts always take precedence over all other analysis. So what is next for DXCM? Who knows, it all depends on how many buy and sell orders come in, plain and simple. I do not know how you are working out your entry and exit targets, but if you are not using charts, then you really are just stabbing in the dark. FWIW, I would not be surprised to see DXCM climb back into that box shortly, but as mentioned, you should always trade what you see, and not what you think. This game does not give a damn about your thoughts or opinions, so best to lose them and learn how to focus on major levels and how price reacts when these levels are reached. In relation to profits, well, it is wise to remember that you will never go broke taking profits, and greed will do nothing but cause you to give back the money you make. Just relax, take a good look, place your trades, win or lose..over time the money will start to accumulate once you start to trade what you see, and not what you think
Thanks you MrScalper. I am going to pay special attentions to the charts on DXCM from now on, especially the types you posted here on ET.
MrScalper, Update on DXCM: On May 19 it was at $67.66, traded below the blue box, so someone took it below the $70 level. However, since then it bounced back to $78.55 as we speak. So I got lucky, my option went from OTM, a loss, to ITM and a nice profit. I am actually not please because you were right, I was just guessing/gambling and the stock could have gone down to $60, $50.... In the mean time, I am studying charts. Regards,
A stock can do anything at any time..depending on what transpires..you need to have a method that allows you react to what is actually happening.. anything else is really very high risk..and cañ go either way..if you risk too much at the wrong time..it can wipe out an account Many think that just because they make some money that they can actually trade..if they are still trading after 10 years then they really have learned a good bit about how to make money..and keep it!