Netflix is a monster stock to trade. Notice how many price gaps were produced on its daily chart? (Note: A gap happens when today’s trading range is completely above or below yesterday’s trading range.)
Multiple price gaps mean very high price volatility for traders and investors because the position equity can swing violently overnight.
Therefore, Netflix is perhaps best traded with lower positional sizes. Specific trading strategies to consider include: one, buying Netflix at the bottom of an established range for a contrarian bounce; two, buying Netflix on a breakout above an established range.
An example of the latter is at $190 back in July. Another is at 240 in October.
For positional trades, I would buy the stock after a setback, preferably near an established floor. This skews the risk-reward ratio in favour of buyers.
Lastly, when Netflix is trending, and you are on the right side, stay in to maximise the gains.