FB opened strong and met resistance at 329.5 30 minute supply zone. After rejecting this level at 10:17, it consolidated above VWAP for a while. A 10:45 attempt to retest that level failed to get there, which gave me a reason to believe that puts made sense if that level was retested.
I set my order to be automatically filled right under that level with a 3:1 RR. My entry was triggered at 11:10 by a large green candle. Since FB can move quickly, it would've been wiser to wait for a red candle or more confirmation before entering. This was a pretty speculative early entry. Next time, I'd like more confirmation that the level rejected again, just like the confirmation provided by the 10:18 candle on that first 329.50 reject.
At 11:15 there was a crazy 1m candle with high volume. I got out pretty quick. I paid the price for not waiting for confirmation of selling strength. Also, I shouldn't have traded 0DTE contracts on something that moves as fast as FB. I'm exposing myself to too much risk by doing that.
FB on this day reminds me of my February 10th, 2021 trade on HYLN. Both trades involved large green candles with extraordinary volume that usually occurs alongside breaking news. Both were followed with continuation moves to the upside. I didn't enter on either move even though I was watching the charts when both occurred. I have trouble distinguishing between a large green candle that will be followed by a retracement and a large green candle followed by continuation. After I saw the giant candle, I looked for breaking news. When I saw there weren't any new stories, I decided not to enter.
Lesson Learned: A large green candle with high volume, where it seems like all the buyers came at once, should act as an entry signal. There will always be the chance to exit if a red 1m candle prints, which suggests there is no news and that was just a big order getting filled not several buyers wanting in.
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2021-06-04 11:10:18 | 4 JUN 21 330 PUT | buy | $1.410 | long |
2021-06-04 11:15:42 | 4 JUN 21 330 PUT | sell | $1.050 | 0 |
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