November 7, 2022 - (3 Trades)
Overall Grade: B
-Today I took 3 trades. 2 trades were with options and 1 trade with shares. One good takeaway is that I have shown nice flexibility in being able to judge when I should take a trade with options vs when to take a trade with shares if I think the trade might have a longer time outlook (potential grind higher, hold rest of day type trade or taking a trade in a chop zone)
-Also to note, on Friday (Nov 4), for the first time this year I did not take any trades during a trading day where I was actively looking to trade - potentially led to being overzealous
1YR:1D
1D:5M - 1D:1M
Trades
Trade #1 - Long 3 Put contracts @ VWAP (VWAP Rejection/Trend Continuation)
Grade: C+
- I'm not particulary happy with this trade because it wasn't following any of my particular set ups
- This trade was also placed at 9:44am - Breaking the 10am rule
- Looking at the chart afterwards it doesn't look so bad, and I actually missed a much larger short 2 minutes later, but overall I don't think it was worth the risk
- I only held this trade for about 30 seconds, which shows my lack of conviction. I was a bit trigger happy this morning from not taking any trades on Friday in Samana
- Also had no R/R set in my brain before taking this trade
Fix: Wait until 10am for the better trades (as my TJ stats show I make more money on trades after 10am) and be disciplined enough to wait for set ups I like instead of just a quick scalp on a trade that doesn't give me any edge. Remember to have risk and target in mind before taking the trade
Trade #2 - Long 3 Puts @ 5Min Downtrend (Trend Continuation) (FOMO)
Grade: B
- This tarde was a bit better than 'Trade #1' but it was also a bit of a FOMO trade after missing the trendbreak long from Previous Day Close (PDC) 10 minutes earlier (That was actually my trade of the day that I missed because of options liquidity...more on this later)
- This was a decent trade, but not great, because I got in on the ask as soon as the candle that initially broke the downtrend fell back through the trendline. I jumped into the puts on the ask (instant fill) and took off 2 contracts at the previous low. The 3rd contract I ended up getting out on the bid after it popped back up to vwap.
- I did a good job taking the 2 contracts off on this trade and holding my last one as this did have potential for a larger move down.
- To note, this trade ended up going much higher than is pictured, so it was good to hop out of my last contract once I saw that it wasn't going to make that bigger move down that I was hoping for.
FIX: Try not to submit to FOMO, as it really stung to miss the long trade I wanted 10mins earlier that would've netted me a much nicer profit in a trade I was a lot more confident in.
Before we get to Trade #3: I want to note a bit about the missed trade that I was looking to capitalize on
Missed Trade (After Trade #1)
- This was the trade of the day for me
- Unfortunately, I actually had an order out to get filled 3 Calls on the bid which didn't get filled. This trade was most certainly a BUY THE ASK situation
- I was looking all morning for the fake breakdown, reclaim & hold PDC to get long fotr a move to VWAP
- The SPY did make a fake bottom, after a fake trendbreak, which gave me confidense that this was going to move higher, however, it never actually got above PDC until it broke out. On the candle before the break of PDC, I placed an order on the bid which sat for about 3-5 seconds without getting filled. I instantly thought to myself, 'I should cancel this order and Buy the Ask' but I did not execute on that thought and watched it breakout about 10 seconds later on the next candle
- This missed trade stung as it could been an easy $100+ trade if I held even 2 contracts into VWAP (probably would've scaled out first contract on the first red arrow on the chart where it did it's original fake trendbreak.
- This was also my first real life experience with the difficulty of trading options compared to shares. Need to recognize that liquidity is lower and if I'm confident on a trade that I think is about to move quick, I want to get in this trade.
FIX: BUY THE MOTHAFUCKIN ASK
Trade #3 - Long 100 shares of Apple (2 entries - 50 shares each) - (Grind up, Fake breakdown, Recovery Set up)
Grade: B
- I'm not unhappy with this trade, especially since I only risked $20 max after being up +$75 on my first few trades
- I was stalking apple throught the late morning looking for a short - you can see the short did eventually happen (big red candle on the 5min chart about 17mins prior to my entry on this trade)
- When I saw the short quickly recover on the 5min chart (I thought grind up, fake breakdown trade I always talk about with Colby). I thought I could potentially get in on a pullback to the previously significant 137.3 level and hold a trade that might grind up throughtout the afternoon. That is why I decided to take this trade with shares instead of playing contracts.
- I am happy that I am focusing on the potential of the play and deciding to take options or shares depending on my trade plan.
- I entered too early on this trade and was basically in the red throughout the trade which wasn't ideal but I was OK with it because I calculated and accepted my risk before the trade.
- This trade did end up grinding up into EOD but it did continue much lower between that and when I exited so it was also good that I stuck to my stop on this trade
FIX: Not a bad idea and if it had went long and grinded up to 138+ I would've had one of my best green days of the year so all in all, I'm not unhappy with this trade but I could've just walked with my 2 trades +$75 from the morning.
Takeaways: When I see a trade that is about to move quick that I have confidence in, I shouldn't be scared to give up a couple cents to be in the trade soooooo ..... BUY THE MOTHAFUCKIN ASK BABY
Easy Money: Would have been the 5min downtrend breakout towards the later afternoon (Reference 1D:5min - 1D:1M charts from above)
