{"id":51695,"date":"2022-12-25T10:10:55","date_gmt":"2022-12-25T15:10:55","guid":{"rendered":"https:\/\/www.smbtraining.com\/blog\/?p=51695"},"modified":"2022-12-25T10:12:33","modified_gmt":"2022-12-25T15:12:33","slug":"why-did-we-take-a-rip-in-tesla","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/why-did-we-take-a-rip-in-tesla","title":{"rendered":"Why did we take a rip in Tesla?"},"content":{"rendered":"

\"\"<\/p>\n

Three days ago, I wrote that we were hawking a Tesla Bounce Trade. See Four keys for a Tesla Bounce Trade<\/a>.<\/p>\n

Friday we took that trade.\u00a0 And we took a rip.\u00a0 See Taking a Rip in Tesla<\/a>.<\/p>\n

Perhaps after review, we will conclude that the Tesla Bounce Trade was worth taking.\u00a0 But there is an important element of that review, I would like to discuss on this Christmas Day.<\/p>\n

This element, this best practice, is imperative to getting the most out of a bounce trade.\u00a0 This is especially true to make the most of the experience taking a big trade, like the Tesla Bounce Trade.<\/p>\n

This best practice is to review…Why did we take a rip in Tesla?<\/p>\n

What about the Tesla Bounce Trade made it less likely to work?\u00a0 What did we miss?<\/p>\n

Again, we may walk away concluding we would have done exactly the same.\u00a0 But you cannot improve without an inquiry into why you might have been wrong.\u00a0 What you might have missed.\u00a0 Why the trade didn’t work out.<\/p>\n

I do not mean for this post to be an exhaustive review of why the Tesla Bounce trade failed.\u00a0 I mean for this to be illustrative of the best practice to incorporate in your post-trade review.\u00a0 This is me role-modeling the discovery for you.\u00a0 This is me starting a conversation on why perhaps this trade did not work.\u00a0 Feel free to disagree with any of the reasons below.\u00a0 Feel free to discover important reasons I did not list.\u00a0 This is a thought experiment we are doing…together.\u00a0 The reward is the improvement that comes from participating seriously in this review.<\/p>\n

Some potential reasons… Why the Tesla Bounce Trade failed?<\/p>\n

    \n
  1. We are in a bear market.\u00a0 Bounce trades, all long trades, are less likely to work in a bear market.<\/li>\n
  2. It was just Day 2 after the negative news catalyst:\u00a0Tesla (TSLA<\/strong>) will offer $7,500 discounts on Model 3 and Model Y cars this month.\u00a0(Reuters<\/a>)\u00a0 <\/strong><\/em>Perhaps big money players are not done exiting after this negative news catalyst.\u00a0 Maybe we were too early.<\/li>\n
  3. Negative sentiment about about owning TSLA and its brand after Elon’s erratic, immature, unprofessional $TWTR behavior is still spreading.\u00a0 Do professional money managers want to own a stock run by a CEO exhibiting such behavior?<\/li>\n
  4. Covid is spreading aggressively and unexpectedly in China.\u00a0 Do we even know how bad it is?\u00a0 Do we want to risk off until we have more clarity?<\/li>\n
  5. Is the market just too weak after the last FED meeting?\u00a0 Since the last FED announcement the market has traded considerably lower, unhappy with the perceived hawkish tone.<\/li>\n
  6. Do we need a better signal of capitulation before TSLA can bounce?<\/li>\n
  7. Do we need to see more Tape Reading strength with a reversal to the upside for the Bounce Trade to work?<\/li>\n
  8. Elon still has not hired a new TWTR CEO.\u00a0 Is that necessary for Tesla to bounce?<\/li>\n
  9. Can Tesla bounce on a Friday before Christmas?\u00a0 Do we need more market participant for the real bounce?<\/li>\n
  10. Are there too many people watching for Tesla to bounce?\u00a0 Is this trade too overcrowded to work easily?<\/li>\n
  11. Should we be scalping this instead of playing for the home run bounce trade?<\/li>\n<\/ol>\n

    (How to Use Tape Reading to Make Quick Profitable Trades (for Scalping<\/a>)<\/p>\n

    Okay I am gonna stop here.\u00a0 You get the point.\u00a0 Why did we take a rip in $TSLA?<\/p>\n

    If you adopt this best practice, then you will get even more out of the Tesla Bounce Trade.\u00a0 Even better would be to build your list of why the trade failed, share it with your trading pod or trading team, and discuss with each other.\u00a0 That is even more reps for you to improve with this huge trading opportunity.<\/p>\n

    Okay I am gonna go and take a long walk on the Jersey Shore and give this some more thought.\u00a0 I am curious, for those who took this Tesla Bounce Trade….why did you take a rip?\u00a0 Please consider sharing your thoughts under my tweet @MikeBellafiore<\/a> to this post.<\/p>\n

    Merry Christmas!<\/p>\n

    Bella<\/p>\n

    Important disclosures<\/a><\/strong><\/p>\n

    Mike Bellafiore is the Co-Founder of SMB Capital, a proprietary trading desk, and SMB Training, which provides\u00a0trading education<\/a>\u00a0in stocks, options, and futures. Bella is the author of\u00a0One Good Trade<\/em>\u00a0and\u00a0The PlayBook<\/em>. He welcomes your trading questions at\u00a0mbellafiore@smbcap.com.<\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Three days ago, I wrote that we were hawking a Tesla Bounce Trade. See Four keys for a Tesla Bounce Trade. Friday we took that trade.\u00a0 And we took a rip.\u00a0 See Taking a Rip in Tesla. Perhaps after review, we will conclude that the Tesla Bounce Trade was worth taking.\u00a0 But there is an important element of that review, … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":51547,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5463],"tags":[12,30,5599,5601],"class_list":["post-51695","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bella-daily-update","tag-fed-announcement","tag-prop-trading","tag-tesla-bounce-trade","tag-tesla-rip"],"yoast_head":"\nWhy did we take a rip in Tesla? | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/why-did-we-take-a-rip-in-tesla\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why did we take a rip in Tesla? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Three days ago, I wrote that we were hawking a Tesla Bounce Trade. See Four keys for a Tesla Bounce Trade. Friday we took that trade.\u00a0 And we took a rip.\u00a0 See Taking a Rip in Tesla. Perhaps after review, we will conclude that the Tesla Bounce Trade was worth taking.\u00a0 But there is an important element of that review, ... 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