Lets go into depth into what my trades were today. Why they were good/bad. What I could do to improve them. and Why I broke some of my rules.
My rules are:
1. Never Fight the Micro Trend (Trend Trading Strategy Only)
2. Stay Emotionally Stable
3. Hold for the Target Price
4. Do not give into Greed
Trade Number 1: Short Trend Trade
-I took the attempted break of the 7 for the continuation to the downside on this short
Mistakes: If I wouldve taken my full position at my target I wouldve made a nice 40 dollars on a very simple setup and trade. Sadly I did not and only took half of my profits at my target. This was a clear implication of being greedy and expecting a bigger move than I got. I took half for about a $30 win then the second half spiked on me and since I sell in market orders I had slippage that skipped me out another 25 cents above my stop price. This made me lose on the trade that shouldve just been a quick $36 win on a very simple setup. Although I was clearly wrong on the trend continuing I wouldve avoided the loss completely if I took it at my target.
Rules Broken : 4. Do not Give into Greed
Solution: ALWAYS take the trade at your target no matter how much of a piker you feel
Trade Number 2: Short Trend Trade
-I again went for the Trend Continuation trade where I believed that the SPY would break down back through to the downside. Sadly I was wrong again. I think that a good rule for the trend continuation trades is that if the SPY is above the 20 you cannot anymore go for trend continuation trades. It is simply too risky. Luckily I did not get too angry after this loss and just accepted it for what it was and tried to keep my composure throughout the session.
Mistake: Do not go for trend continuation when we break back above the 20. The chances of continuation lower significantly when the 20 is broken.
Solution: ^
If I was paying more attention to where the 5 minute was at I wouldve seen that we broke the trend to the upside and once this happens there is just no reason to take a short continuation trade no matter the circumstance. Trend Trades do not work when the trend is broken on the 5 minute. This is a trade where I should be avoiding altogether every single time no matter the circumstance.
Trade Number 3: Short Trend Reversal
-This is a good example of why I took this trade just wayyyy too early because I was watching the 2 minute rather than waiting for the 5 minute to form.
-I too the break of the 2 minute trend to the upside and I drew the uptrend where the beginning of the reversal occured. For example:
-See how I drew the trendline on the 2 minute and it was clearly wayy to elevated and the angle is super strong so I shouldve known better that fakeouts to the upside were going to happen. These are easy fixes though. I shouldve used the 5 minute chart. For example:
-The 5 minute paints a much clearer picture. I took the trade too early and the trend was not broken yet. On the 5 minute though I wouldve seen this and not taken this trade. See how the 5 minute broke then there was a horizontal retest of that line
- It wouldve been still very very close but if I took that retest entry and had my target and stops sitting at 50 cents on either side I wouldve been very close to stopping out but if I held for my targets I wouldve made my 50 cents
Mistake: Dont take trend reversals on the 2 minute chart. its much more difficult
Trade Number 4: Short Trend Reversal
-This is a clear and much better trade than any other trade I took on the day.
-I took the retest of the horzontal line when the 5 minute broke and I made about 40 dollars on this trade after being down about 110 from my first 3 trades.
- I really like this entry much more than the previous trade. Although I only made back what I lost on the last trade I am happy that I had the confidence to take this once I realized what I was doing wrong
Mistakes: None
Takeaways of the day:
I really need to start identifying what I am trying to do before I do it. Am I going for a trend continuation? Use the 2 minute and follow the Trend Continuation Rules. Am I going for a Trend Reversal? Use the 5 minute and follow the Rules. Something I am very happy about more than anything is that I kept my composure throughout the entire day. I took a pretty shitty loss that wouldve been a win on my first trade of the day If I wouldve just not been greedy and taken my full position at my target price. Then I took a pretty bad trade betting on the reversal way before I shouldve. I know that if that second trade worked I wouldve been happy but it wouldve taught my some bad rules. I really should not be taking trend reversals quickly after the initial 5 minute trend is broken. I know this will be very difficult and its very possible that I will try to take out one of these strategies depending on where the market is at and what the trends are doing on a bigger timeframe. I need to be able to identify when one will be better than the other and why. That is my next task. I am very happy about my attitude on the day though. Surprisingly I am happy even though I definitely took a hit today after only having an avg green day last week of 35 dollars and today i doubled that to 70 (after fees). I dont like that on my first red day in 1 week I made it bigger than almsot my entire last weeks profit. That is very bad but although it sucks I am still so fucking lucky to even have this opporunity and today I kept that at the forefront of my mind. I realize this sucks to start the week red on many avoidable things but the fact that I am sitting here for 2 hours right after taking a hit and studying why and how that happened means that I am learning and so long as i am learning and appreciative of these opportunities I am succeeding.
