Grade: 

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 tough day to trade as the SPY moved up right away and then sold off the rest of the day. Overnight we moved up and then back down to around the close the prior day. On the daily chart it seems as if we double topped at around 402.6 and started moving down, with the 200 EMA at 401.2 which we are below now. We are opening near previous day close today with zone at 395-396 surrounding that previously day close. We are also opening below the micro uptrend . Potential scenarios:

1) We could come back down to test the previous day close and 395-396 zone at which time we could get a long back up to around premarket high (398.14) or the previous trend line where we get resistance and come back down. If we break down we will likely see resistance at 393-394.

2) We could move up at open and test the highs again at 402-403. I think this is less likely. However if we do move up the premarket high and trendline level will be a big level to watch for rejection and a potential short.

Trade Analysis:

 

  • Trade 1 was not a great trade, if I had to categorize it it would have been a trend continuation short but we had opened up. Took a loser here at my risk.
  • Trade 2 was a trend continuation short. We had a large move down and then come consolidation on low volume, I was looking for the continuation to the downside. We had been using premarket low and previous day close as resistance towards the topside. After a while holding this trade it looked like it could potentially flip long so I closed for around breakeven. This is not a good trade as I should be holding to either risk or reward. However sometimes its not bad to react to what the market is doing.
  • Trade 3 was a shit boredom trade. I was looking for a rejection of the top of the range/wedge and move down.
  • NOTES: 

Lesson moving forward: PATIENCE. Not every day will provide opportunity and there's no reason to force anything.