I am not sure if anyone care to learn about it but what happened today was a complex wave and not quite easy to trade... yet managed to trade it somehow..
First of all here were by trades for the past 5 days.. and the reason along with chart why I did so
Bought 4500PE @ 27 yesterday before close ... Sold Today @ 33
Bought 4900CE @ 48 ... Sold @ 64
Bought 4500PE @ 23 ... Sold @ 35
Bought 4800CE @ 83 ... Still holding for tomorrow
Lets understand what this wave was all about...
first point is an imaginary point as we do in case of gap ups & gap downs. The easiest way to find it is to draw a horizontal line on the left starting from the point 3 and take it all the way to where the gap occurred (I could use the closing point of 4th Feb as well but I decided to use the "gap" as point 1.
Good the second point came being the low of the 6th feb and volume confirmed that its stopping there.. now I need to wait for point 3 to happen.. which came yesterday in form of a small bearish wave within which is a good confirmation that it will try to form a point 4 now but failed to do so on same day (yesterday)... my Stop was the highest point of yesterday or point 3 and I bought 4500PE @ 27... now despite of a very positive close yesterday in US markets and a decent gains in asian markets in the morning it opened below point 3 and continued the path to meet the target of WW in 15min which completed @ 4770 but it went down little more and volume again suggested that its stopping there....
I got off 4500PE as soon as it touched the 15min target line and waited for it to come back above the target line... within few minutes it bounced back off the target line in 15min chart and I took 4900CE... with a STOP at the point 4 just formed and drawn the line ahead and merged the 1-3 line with 2-4 to estimate the target... I was hoping the target may or may not come today itself....
it did indeed and see the sell off for straight two 30min bars just after it breached the 1-3 line to form a new point ... called sweet spot... I booked my 4900CE here and did not have to wait long as it pulled back rapidly where I bought 4500PE once again... this time much cheaper than what I had yesterday.. and waiting for it to touch the target line... just before the close it meet the target line and bounced back..
Finally I decided to book my puts again and go near money call (4800CE @ 83) and wait for a pull back... if 100% pullback then we should see 4820 by tomorrow
Hope this was helpful to you.
