10/13/22

Grade: D+

Goals: Be more selective and raise winning %

Reminders/Aphorisms: 

  • Don't fight the trend;
  • Be patient, take good set-ups
  • Respect at least 2:1 R/R

Overview: Yesterday was a huge ranging day that was very difficult to trade. CPI numbers came in terrible so the SPY dropped 12 points at 8:30 and has been consolidating around the 348-350 level since then. It blasted through the zone it was ranging between yesterday at 358, and then blasted through the 356-357 level. The new premarket low was set at 348.53. There are no levels betwen 356-357 level and where we are now. This was a huge move in the premarket and leaves us a guessing a little as to what happens next. Need to be patient and see where the big money is at. Likely scenarios:

1) SPY/QQQ will have some minor relief at open and then continue a gap and go down.

2) We may bounce some off the new low, although it would be tough to reach the prior 356-357 level so it would be difficult to bounce.

Trade Analysis:

  • Trade 1 was a suboptimal set-up to begin the day. We had a strong gap down so I was looking for a continuation of the gap down. I got in way too low and got taken out on a spike.
  • Trade 2 was another attempt at my first trade. I was definitely feeling FOMO from the large move down and wanted to capture something like that on a continuation down. This spiked on me big time and I was not even able to respect my 2:1 R/R because it moved so fast on me.
  • Trade 3 was a continuation long trend trade. Looking back on the chart this does not look like a great trade. I got in too early on this
  • Trade 4 was a continuation long trend. When I hit my target on the trade I accidently hit the bid instead of the ask and doubled my position size and freaked out. As a result I hit the flatten now button and closed the trade for a small loss rather than a big win.
  • Trade 5 was a continuation long trend trade. This was a pretty good trade and I was able to capitalize on the mess up from my prior trade. At this point in the day I had 2 losers, 1 scratch that should have been a winner, and 1 winner, so I was not that far into the red. I should have stopped trading here as I already took too many trades and I was a little on tilt and realized I was FOMO trading.
  • Trade 6 I saw that the QQQ had a strong move up to the highs and the SPY had been consolidating, this would technically be a continuation long trade. This was a poor trade not sure why I took it. Had to close out for another loser.
  • Trade 7 was the better trade as a continuation long trade. After we dipped down and bounced off the 9 EMA I got in long for the break of the previous candle high and I was able to capitalize on the move.
  • Trade 8 was a short trade anticipating a trend reversal and break of the 5 minute trend. This was taken took early and I took  a heavy loss on it.
  • Trade 9 was the same trade as before but this time I got a better entry and was able to win on the trade. However this was not an optimal trade setup either.
  • Trade 10 was another anticipatory trend reversal trade for the 5 minute break. We had some topping tails form and I was looking for the larger move down and through the trend line. I should have waited for confirmation as this spiked on me big time and I took a rather large loss again.
  • Trade 11 and Trade 12 were completely revenge trades. When Looking at these trades there was no reason I should have gone into these trades. I just wanted to be right and took the L because of it.
  • Trades 13 and 14 - SPY went parabolic - never seen this before - just long and you win - left a lot of money on the table but reduced the damage.
  • NOTES: I think I saw big moves happening today and I was anxious and feeling FOMO so I jumped into trades that were suboptimal setups although I noted in my premarket analysis that we should be patient and see where the money was. I also note that I tend to have red days on days where the market is trending green. Too many trades today and too many of them anticipatory.

Lesson moving forward: Stick to the game plan. On big gap days on news like CPI do not chase, do not overtrade. On grinding green days don't play the short reversal. Finally, walk away on small red days instead of making them huge.