9/16/22

Grade: B

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: SPY/QQQ has been in a range the past few days but had a massive move to the downside overnight likely on bad FDX earnings/news. Looking at the charts in the morning the SPY had room down to the 380-382 demand zone, and then further down to 370-374. After taking a ton of scratch days and noticing that the rate of change has been decreasing due to the low stock price. When I started trading this it was in the 300s. We would look for $1+ plus moves. However it isn't happening much anymore, so the R/R is getting a little sketchy. So today I tried trading the SPY instead, using 50 shares because of the slower rate of change, risking 25c, looking for 50c on the partial, and letting the runner go to 75c or $1. I may need to size down a little more as this did move fast.

Trade Analysis:

  • Trade 1 on NVDA was a trade rejecting the low/zone from the prior day as well as premarket high. I got in a little too early and stopped out on a spike. I should have given the trade a little more room to work and I would have made my 2-1 R/R easily. While I did respect my risk on this trade, I should have increased it a little to account for a pop above key levels.
  • Trade 2 is not shown above but it was a continuation trade on FDX (FedEx) after poor earnings. It was not the greatest trade so I cut it for small profits.
  • Trade 3 was a great trade. I took a trade on the SPY after a reversal on the first pullback. The SPY had pulled back and struggled at VWAP and thereafter rejected hard at the 20 EMA. As a result I was able to capture a 2:1 R/R (25/50c), and let the runner go. On closing the trade I fumbled and bought more shares instead of selling (used to shorting) and had to flatten the entire order. I should have left my runner go a little longer and closed on the first red candle or move below the target.
  • NOTES: The SPY did what I thought today and bounced almost perfectly off the 382 level and I was able to capitalize on the 2nd leg of the move. However moving forward 50 shares of the SPY may be too much to start with and I may consider sizing down a little. However it did provide me with the ability to take a proper partial.

Lesson moving forward: While trading the SPY be aware of volitilaty as it can move quickly resulting in big losers.