Well, I was wrong.
But that’s OK — because I have discipline and I cut my losses when I was supposed to …
I’ll explain in a minute.
Here’s what to know, though … If you find yourself just hoping and praying for a position to go your way, you should not be in that position.
Sticking to your trading plan may be one of the hardest things to do as a trader.
But trust me, it will be your savior in the long run.
You let it go, kind of like they said in Frozen. (Which, that useful advice aside, is one of the WORST Disney movies. It’s certainly no Moana.)
You cannot make other good trading decisions while you have that hoping, wishing and praying trade on.
Get out and move on!
Remember, you can always re enter once-you’ve stopped and reanalyzed.
The Move I Made
Below is the Advanced Micro Devices (Ticker: AMD) chart I was looking at when I recommended buying the Mar19 85/90 call spread paying $1.75.
Here is the chart on Friday, five days later:
Thank goodness I got out, taking my 37% loss selling the spread at $1.10.
Yesterday, Friday, the spread was trading $.20!
Stick to your trading plan!
Keep An Eye Out
If AMD manages to hold the support level in the chart below — around $73.50 — I will reevaluate and possibly re-enter on the long side with a new trade idea.
There is still a global shortage of semiconductor chips that may last until the end of 2021.
Qualcomm CEO Cristiano Amon calls it a “supply chain crisis.”
And it’s affecting car production, phones, gaming stations and more.
The Biden administration is reviewing the situation and throwing $37 billion into chip manufacturing. (Ironically, in 2018, there was a huge oversupply of chips causing the chip maker stocks to drop.)
I am keeping these stocks on my radar, along with AMD:
PHLX Semiconductor Index (Ticker: SOX)
Nvidia Corp (Ticker: NVDA)
Taiwan Semiconductor Manufacturing (Ticker: TSM)
Qualcomm (Ticker: QCOM)
At the moment all these stock charts look pretty ugly. It will be interesting to see how this pans out …
But I just won’t be helplessly hoping along the way.
Thanks for Reading … See You Next Tuesday!