Daily P/L: $105
Account Net Value: $403
Account Net ROI: 16%
Trade Rating: GOOD
And we have recovered our losses and even made some profits! Account is up 16% today. Took 1 trade and stuck to my plan, making a 43% return on my investment in this one trade.
I watched as BYND was trying to make daily highs, but kept getting rejected and reversing back. When BYND broke above its 170 level, it rallied up to 172. It then created a support level at 170.50. What does this mean?
Notice how at around 8:15am the stock falls back down but holds above 170.50, this now creates 170.50 as a support level. BYND bounces off of this 170.50 level and retests highs, however the 172-172.50 level keeps getting aggressively rejected. This shows a lot of selling pressure. Because of this, playing BYND on the upside was not an option for me.
As BYND begins to approach the support level of 170.50 again, I begin to watch it's price action and prepare myself to get into a PUT option position. Again, PUTS play the downside of a stock.
BYND breaks the 170.50 level but buyers try to push the stock back up, resulting in that long wick on the first break. This candle also closed above my 170.50 level. However the next candle shows the stock setting up to break and dump below the critical level. This is when I enter my trade.
My first mental stop loss was the intra-day critical level of 170.50. Meaning, if the trade didn't go in my favor and BYND pushed back above and closed above this level I would exit my trade for a break-even or very minimal losses.
This keeps my risk at a minimum. Allowing me to control my capital.
BYND begins to dump, breaking the next dollar down level of 169.50
This is when I lower and re-set my stop loss. Why? Well in this case, if the stock reverses and executes my stop loss, I will be green regardless. Risking nothing anymore, staying in the green and riding the trade out.
You can see in the image above that the stock breaks below 169.50, and at no point did it break back above this level. So, I held on to my position waiting to see if we see a continuation dump.
BYND continues to gradually decline. However, price action begins to get choppy at the 168.50-169 level. Buyers begin to get a bit more aggressive. However, still at no point does the stock break above my second mental stop loss so I am still in my trade.
BYND then breaks below 168.50 and dumps to my intra-day level of 168. This is when I exit my trade and take profits as I didn't like the volume and price action on the downside anymore.
And hey! I got out perfect timing.