10/18/22

Grade: A

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: Really overtraded yesterday, thankfully the damage wasn't bad. I need to be patient and take better setups. Yesterday we consolidated all day, likely because of uncertainty in the market due to upcoming earnings. I did notice that on the weekly chart we were below the 200 EMA, which since 2019 has not happened since COVID. This makes it seems like we will have a nice bounce here, although I don't know if this is the final goodbye the market's downtrend. We still have a lot of room to the upside before we can say we are on an uptrend. Premarket J&J beat earnings and the SPY is gapping up close to $10. We have held the 355-356 level as support on the bottom and have moved up through multiple zones. We are opening right above the 371-372 zone which was previously the zone we kept topping out at and pushing down. The next zone up is the 380 level. The 4H chart looks like we have reversed and made a higher low and higher high. Potential scenarios:

1) We have some profit taking at open but have an opening drive up to the 380 level. If we break through the next real zone would be 390.

2) We could get another day of consolidation similar to yesterday waiting on some of the larger player earnings to come out.

3) If we do sell-off it will likely be to previous day close levels around 366-367, where we consolidated for most of the day yesterday.

Trade Analysis:

  • Trade 1 was a continuation downtrend trade. We had been consolidating above VWAP with decreasing buying pressure/volume, preparing for a bigger move down. I got in at VWAP and took 50c on my partial and let the rest run for $1. The only thing I would consider doing differently in this trade would have been adding on the green topping tail to VWAP. This was a quick bounce on low volume that went down almost instantly. It seems as if it was someone covering a big position.
  • Trade 2 was a continuation downtrend trade. We had a bounce off the 372-373 level back up to VWAP. However the 5 minute chart was showing low volume on the move up. We were stalling at VWAP so I got in when we started moving down. I took my 50c target on this, but took my runner way too early. If I held the runner I could have gotten an extra $1 to $1.50. I need to figure out a better system for taking partials.
  • NOTES: 

Lesson moving forward: Respect my risk, let the partial run it's not that much money to lose if I have to cut it but I can make my wins a lot bigger.