I made 56% on a one-day trade and I had no idea it was coming.
Put a bearish position on in the semiconductors Friday at $1.15. Closed it this morning at $1.80. One of the bigger one-day gains I’ve seen.
And I’m going to get emails today telling me I was spot on, so let me stop that right now.
I did not put that trade on because I thought the world was going to fall apart over the weekend in AI. I didn’t know that was coming.
Nobody did.
So let me tell you why I took it.
The volatility in the semis has been great lately, and this is not my normal setup. I like three standard deviations, yada yada yada. This thing was a chopped out wonder fest, and that’s why I did the trade.
I took the bearish side because the skew was a little friendlier there. That was it. That was the whole thought process.
I don’t sit around overthinking these, and I especially don’t overthink them after I’ve placed them.
Which is the part most people get backwards. They want a story before they’ll take a trade, some kind of thesis about what happens next.
I want a structure. Cheap volatility, friendly skew, a chart that’s been chopping for weeks. If the structure is there, the trade is there, and I do not need to know why the market moves next.
And I’ll tell you what a thesis does to you. It makes you hold.
If I’d taken that trade because I believed something about AI regulation, I’d still be in it right now telling myself the story is intact. Instead I took it because of skew, so when it paid me 56% in a session I just left.
I run a handful checks before I get into any trade. It takes about a minute for the whole thing. And it’s the reason why I can find trades like the I mentioned above.
→ Click here to run the checks yourself
To your success,
Don Kaufman
