Trading Amazon After a Record Holiday Season
In tonight’s video, we discuss how we traded Amazon (AMZN) after it shot higher with its record holiday season.
Our trade in Amazon came as we broke outside of the Aggressive Volatility Box, giving us our Triple Method green light to fade the stock.
We bought the ATM 1860/1855 Put Spread looking for a move down to what would be our normal entry point.
That did not happen – Amazon continued to trade chop sideways outside of our zone, eventually stopping us out.
However, with our stop out, that also gave us some additional (now not-cheap) information about Amazon for tomorrow.
If AMZN continues to stay above the $1862.50 – $1870.46 zone, in the first 15 minutes, then we can view it as a likely trending candidate for the day and use our Volatility Box upper target lines as areas of exhaustion.
Getting stopped is never fun, but it is a necessary part of trading that is out of our control.
What is in our control, however, is the ability to extract information from our stop-outs, and use that to make smarter, data-driven decisions for tomorrow’s trading.