September 1st, 2022

    Today was yet another day where I underperformed. I really need to start working on my confidence becuase I really dont understand why I study all of this and end up hesitating on trades that I planned out to take. 

1st Trade Short: So the only reason i really even took this trade was because I just wanted to make money on the day after being distracted in the morning. I was doing way too many things at once and kinda just wasnt focused on the market for some reason and I know that one of my new rules now has to be that I have to shut off all messaging apps and all social media so I am not tempted to take my eyes off the charts. This trade was still a good setup in the fact that I waited for a good entry and I waited for the initial fail of vwap for the continuation to the downside. The only reason I was hesitant to take it was becuaseI know we had many red days and the bounce was coming soon, i just didnt know when. I iddnt even buy the break of the 8 actually so i kinda fucked this whole trade up anyways. it was not a clean setup at all and I really should be avoiding these types of trades altogether instead of chasing money on the day. Luckily I was right and we continued down but its just not a good setup at all.

Mistakes: Turn off all Social Media During Market Hours. A new rule that I need to follow in order to stay focused is that I need to stop going on twitter and discord because I wouldve taken a trade before this one if I was paying attention. This was like the 3rd failed move higher on the day and its clear that as days go on the failed moves higher get worse and worse especially when we are making higher lows. 

Solution: ^^

2nd Trade Long: I saw that we were making a higher low on the 5 minute and I figured "why the fuck not" and took a smaller 30 delta call option and just was going to hold to see if we would hold the higher low and move higher. Although this trade ended up in a measly 5 dollar profit, I couldve probably executed it better. The only thing I really couldve done better though was not panic sell at the bottom when it broke BUT when it broke it failed and moved down a lot lower. Although my execution was slightly off on this trade I do think that this is a beautiful Price over Time trade. When I say that all I mean is that if we are mkaing higher lows, after 5 huge red days, and panics are getting weaker in the morning, then we will probably see a minor bounce. Sadly I was just a little too early and later in the day (check 5 minute chart above) we have a hugeeee 6 point move back to the upside. I knew that we were going to fake out many times before making that clean move to the upside so that is why I was so eager to sell the moment we started breaking back down through the 8. Overall the execution on this trade was actually quite good but I shouldve stayed until later into the day to fully capture the move that I knew was coming. Something extremely important about trading is that you can be right about a lot of shit but WHEN you will be right is much more important than simply being right. I have to make sure that when I am right about something or I have a prediciton about something I must let the price action show me a confirmation then that is when I can enter. Since we held a higher low here I figured that that was a decent enough confirmation but as the SPY loves to do, it faked out again basically right after i sold and it went right back to the low on the day. 

2nd trade Continued: 

If you see how we broke the small uptrend where I entered my call option (bottom left of capture) I was wrong about the bounce at that moment but later in the day when we tested the lows again, i became right about my previous thesis. Dont get me wrong, this is still an extremely high level difficult trade. Catching the other side of the V is one of the most difficult trades out there especially on the SPY because it just fakes out so much to hunt for liquidity. If I waited later into the day and had the clear confirmation of the break of the downtrend I really couldve nailed this long setup. Let me go into further detail.

This is the 15 minute timeframe on the SPY, you can see that we had a downtrend (blue line) on the intraday chart. Once we broke that downtrend that is the "obvious" entry for someone who is a straight noob at trading. The much better higher % win entry comes at the horizontal retest of that line. 

For example:

Trend is broken on the 5-10-15 minute timeframes from the downside back to the upside. Now you make a horizontal line retest of that area and see if you can make the higher low to signal the continuation to the upside on a much bigger "capitulation" style move. This was the best potential entry of the day. Huge trend break after big red on the daily chart and weaker and weaker panics everyday lead to higher lows on the macro timeframes. This was a beauty of a trade and its one that I missed for many reasons. The main reason being that I was not at my computer, the second reason being that I just didnt expect it to happen once I failed at my previous long attempt and it broke to new lows. I shouldve just worked out and came back to my computer but instead I got lost in conversation with family (which is something I will never regret doing). Although I missed this trade I am happy that I can look back on the day and see that there is an absolutely perfect entry that happened late day near power hour where I couldve absolutely demolished this thesis of the V shape happening today. Just to be clear let me explain why this black arrow is the perfect entry and why the other entries are not. 

Entry A: This is the initial trend break back to the upside. Although this seems very nice from this time frame it really is not. The reason why its not good is becuase only a trend break is not nearly enough to just jump into an entry on a V shaped reversal. The reason why is because you have zero confirmation that we will hold this break. There are tons of trend breaks that happen every single day all the damn time and many of them fail and continue back to the downside. This is the entry where you have about a 30% chance of winning. NEVER a good place to take a trend break trade

Entry B: If you were watching this chart play out in real time this seems like a healthy pullback to the 8 where you could possibly take an entry for continuation. The only bad thing about this entry is the fact that you are playing into Fomo. The reason why this is a fomo trade is because you cannot bet on strong continuation when we are in a macro downtrend and plummeting to lows everyday. This could easily (and did) flush right back down to the retest of the trend line break and go straight back to lows. This entry would feel right when you take it and you could definitely have a stop below the previous "A" entry and you could possibly come out on top but it would be much more of a headache than the next potential entry.

Entry C: This is the highest R and the highest % chance of winning trade by far. The reason why is because you are retesting the horizontal break of the trend. When the trend is broken you make a horizontal line or area where you look for the retest. If we can hold that zone and break back higher (create a higher low) then you have a very high chance of success in this trade. You also have an awesome risk/reward because you can set the stop right below the trend break and have about a 50 cent stop which will give this trade TONS of room to work before you get stopped out. This could have just as easily broke back down through the horizontal trend line and went straight back to the blue trend line and bounced at that point. If that happened you could hold this trade and at maximum you would be down about 50 cents whereas if you took the previous entry you would be down much much more before the potential flip happened. 

Entry D: This is the second best entry of the day. You could have taken the break through opening price for the continuation back to the upside. I still would never take this trade firstly because I do not trade this setup very often since it only shows itself very rarely and I dont like buying breakouts no matter the circumstance and especially in a bear market. Although this seems very pretty in hindsight it would be absolutely fucking terrifying in the moment. 

OTHER POTENTIAL ENTRIES OF THE DAY:

Potential Entry A Short: I saw this trade showing itself today because the other day I was looking for different strategies that could make me money when the market is trending rather than in a consolidation mode. I found that the breakdown panic in the morning usually is followed by a quick 5 minute sideways move that gets pushed back down lower. I couldve taken this trade and it wouldve hit my target very quickly for a fast 50 dollars using 2 contracts. Again if I am taking higher probability setups I must remember that they are going to be much faster and require a lot more confidence than the previous long I was talking about becuase the R is very low. This could esaily break back above the 8 and stop me out way before I could even blink so I understand why I am hesitant on taking the trade but I really need to start trusting myself more. There is a reason I spend all of this time studying and understanding what I do right and wrong and the reason is not to have trades fly past me becuase i am scared. YOU ARE SUPPOSED TO BE SCARED. this is a very very tough game and it required an insane amount of skill and confidence. If I want to be a professional I need to start acting like it. ZERO hesitation when I know something is a potential setup. Even if I lose on this trade WHO GIVES A FUCK. Every loss is just another opportunity for me to further iterate my system to the point where I will be able to identify every possible entry and I will understand more and more why they are good or bad and which ones have the best probability of giving me a win. 

Potential Entry B Short: This was the trade that really bummed me out because I wouldve taken this if I wasnt doing other shit and distracting myself. This was a perfects 8ema break and retest of the lows which is my bread and butter right now. I need to practice and study these entries much more because I shouldve been salivating at this possible entry. Although, I missed it entirely I do think that there is merit to understanding that the V shape was happening either today or tomorrow and avoiding it today altogether is really not a bad thing even though it flushed right down to lows and wouldve given me actually much more than my target and I couldve scaled out and made a full point almost. That would be a little over 80 dollars if I wasnt such a bonehead and was paying attention to the charts. 

TAKEAWAYS:

New Rule:

Turn off all Social Media from 9:45-12:00

Never Hesitate on a Setup you Study for