One of the most fatal mistakes in trading options is forcing a trade. Many traders are so eager to "place their bets" that placing their bets (gamble) is exactly what they do - they force a trade when the prognosis really states "wait, be patient."
When I get the itch to enter a position on one of my favorite names, GLD, I always take a step back and ask does the chart tell me where I am wrong. I also ask myself am I forcing a trendline that shouldn't exist.
The current daily chart of GLD has an ascending trendline as minor support down at the $120.20 to $120.25 range (white line). It also has a longer term ascending trendline down at $118.00 to $118.05 range (salmon line). Both lines represent very basic technical analysis. However they also represent very clear lines in the sand that say "I'm wrong here!"
GLD tends to have seasonality where the months of September tends to outperform and October tends to under perform. September definitely did not outperform in 2017. It also tends to run counter to the trend on the major indexes, e.g. SPX, which has been on an incredible tear as of late.
I want to believe the indexes will take a breather, which would help provide support to GLD. I also want to believe that its poor performance in September will lead to out performance in October. But wanting to believe is "hopium."
I do not trade based on hopium. Period
If GLD declines an additional $1.00 to the $120.20 level this week, it is a valid set up for an option trade. Why? Because any further decline tells me that I was wrong and I should take a loss. And if that happens, my next try would either be a short play or waiting until GLD declines to my next line in the sand.
Patience is a key virtue in trading. You have to wait for it...