The GLD setup from October 13 ended in profit â but this wasnât a good trade.
It made money because I got lucky, not because the setup was sound.
Entry Context
The logic behind SPDR Gold Trust (GLD) was flawed from the start: I looked at RSI showing overbought conditions, examined the chart visually, and simply âdidnât believeâ price could rally to the 10-delta level at 393.
I ignored the absence of any reversal patterns.
No Bearish Engulfing. No Evening Star. No Dark Cloud Cover.
Just conviction based on RSI and visual assessment â which isnât part of my system.
That decision nearly cost me.
Trade Recap
Structure: Bear Call Spread
Ticker: GLD
Expiration: October 17, 2025
Short Call: 393C (10 delta) Entry: $0.51 | Exit: $0.27
Long Call: 398C Entry: $0.27 | Exit: $0.07
Contracts: 22
Gross Credit (entry): $0.24 per contract
Broker Fees: â$22.8
Net P/L: +$380
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What Went Wrong
From Monday through Thursday, GLD went on an unprecedented rally.
All-time highs were broken four days in a row.
By Thursday, price pushed above my short strike at 393 â putting the position in-the-money and threatening max loss.
The spread moved deep into drawdown. Assignment risk became real.
This wasnât a âwait and seeâ situation anymore â it was survival mode.
Only Fridayâs pullback saved the trade.
The Exit Decision
Rather than hold into expiration and risk a late-day move back above 393, I closed the position manually 1.5 hours before market close on Friday.
The spread had recovered enough value to lock in a small profit, and I didnât want to gamble on the closing print.
Better to take $380 than risk automatic assignment and maximum loss.
Post-mortem
The core mistake: entering without a valid bearish pattern.
I relied on overbought RSI and my subjective belief that âit wonât go higherâ â neither of which is part of my process.
The 10-delta framework is designed to give high probability â but only when paired with a legitimate reversal signal. Without that signal, I was just guessing with better math.
The profit came from luck (Fridayâs reversal), not from edge.
Thatâs not repeatable. Thatâs not a system.
The lesson is simple: stick to the rules.
No Bearish Engulfing, Evening Star, or Dark Cloud Cover = no entry.
Discipline isnât optional â itâs the only thing separating strategy from gambling.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.