Last Friday, the market jumped up and broke above what I thought was a rollover pattern. If the breakout was legit, it would make it a consolidation. But today, the market sold off and erased all Friday’s gains. Despite that, our Crumbs strategy worked. But on Friday, it all looked like we were going higher. So when I was opening our trade, I decided to skew the entire Iron Condor higher and collect more premium.
However, the market decided to show me that it can be treacherous and dangerous at the same time. When you think you can lose your rules a bit, you get bitten immediately. That’s why it is crucial to have your rules in place and stick to them despite all temptations. And trust me, the temptation of going aggressive a bit more was there and I fell for it.
Fortunately, I didn’t go nuts and still wanted a safe trade. And it paid off. Despite the selling out there, our Crumbs strategy prevailed and the Friday’s trade expired worthless for a full profit. But it was close! In the morning, the market retreated all the way down to 4,546.72 which was very close to our 4,535 short put strike.
Today was a great reminder to play by the rules and not lose them. That’s why we opened a new trade today (subscribe to get email alerts) going back to the rules of the Crumbs strategy.
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