ROKU Trade on Nov 7, 2019 09:46 from littrean: Tradervue User Stock Trades.

DAYTRADE DETAILS ON WHY I TOOK THIS TRADE.

CHARTS:

WHY DID I TAKE THIS TRADE?
ROKU gapped down roughly 15% overnight on earnings despite having a relatively decent quarter so I came up with a plan—last night—to go long and try to catch a bounce play (something I didn’t trade after AMZN’s earnings this quarter which was

.) During pre-market I drew out my trend lines and also noticed the gap entry price of $118.67 was holding. However, once the market opened, ROKU entered the gap and I saw heavy selling in the first couple minutes, then I noticed a quick bounce but rejection at the gap entry price VWAP and 9EMA. Seeing this made me naively abandon the larger picture of going long and became short bias.

I focused in on ROKU and started to read L2 and the tape and for the first 10 minutes I noticed a large buyer at $117 so I came up with the plan that should the bid dip below $117 I will purchase some puts and try to catch a huge drop towards the nearest support at $115 then $112. As soon as the large buyer was filled and price dipped below $117 I jumped in and within seconds I was down 20% which caused another order I had set to be filled on accident. This made my size much larger than I planned for and instead of closing out the position I held it eventually stopping out once I was down over 45%.

Out of frustration and being blindly short bias I bought puts every time price hit VWAP telling myself I would stop out if price broke and held VWAP on the 5min. The premiums were being crushed during all of this consolidation and I started to trade very stupidly literally buying puts when price was at the low and selling every time price jumped to a new high.

Feeling as if I didn’t have much to lose I grabbed 3 puts at $.20 and just held them throughout the day with a limit order to sell at $.23 while I was at a meeting with Josh and Josh V.

CONFIRMATIONS:
- no strong confirmations, once I saw the $117 buyer(s) getting more aggressive I should have abandoned any ideas to go short. I stayed in the trade mostly out of frustration, bias, and the fact that I kept seeing price being rejected at VWAP, the PML, and the gap entry price of $118.67

SETUP:
- pre-market breakdown
- started to think that because the price was holding below the PML that sellers were "gathering strength" to make ROKU drop to next support
-should have been an ER overreaction bounce play

STOP LOSS / PROFIT TARGET / RR RATIO
- stop: 5min close above $118.67
- pt: $115
- risk reward:

WHAT COULD I HAVE DONE BETTER?
I could have stuck to my original plan of going long but even so, had I been trading with a clear head there were so many signs to go long. I saw the aggressive buying on the tape and no matter how hard the sellers tried buyers would not let the price trade lower than the initial morning low of $116.26.

The $112 Call

I should have drawn out a new trend line from the morning lows and I would have seen how pressure was building to the upside. I looked at calls but neglected the opportunity because it didn’t look like they would go anywhere considering how harsh the IV drop hit them. Had I zoomed in I would have seen there was price action there and the prices were not dropping nearly as severe as the puts where during the morning consolidation.

In the future, I should not be trading an option during such sever consolidation especially when I’m on the side of a put/call that’s losing more value than the other. Had I waited until 10:30 am it would have been clear that ROKU broke out of the downward trend drawn out from PM which was also an ORB. The calls ran 900% from the bottom but a more realistic entry could have resulted in a clear 300%-$467% potential gain.

Snapshot of the tape at 10:11 am

Notes from another Tradervue member