10/7/22
Grade: A-
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. We spiked at open then come down and had a ranging downtrend the rest of the day on the SPY/QQQ. Both the SPY/QQQ had topping tails on the daily charts. At 8:30 jobs data released and the market moved down around 7 points. This broke the higher low we had made and were consolidaitng around. The SPY is now opening below the key 372-373 level that we had previously discussed. This is a Friday so have to be careful for profit taking and options expiring. Potential scenarios:
1) Most likely we get a gap and go down. We retest the 372-372 level and then move down to the next level around 362-363.
2) We could also see a consolidation day since we have had a strong move up followed by a strong move down.
Trade Analysis:
- Trade 1 was a continuation trade to the downside. We had a move up to the 20 EMA on low volume which rejected pretty quickly. I got in at a decent entry looking for 50c. I got target pretty easily but on the runner spiked and I got out for around even. I had confidence in this trade because the SPY gapped down big and I was expecting a gap and go this morning. If I had given myself a little bigger of a stop loss, I could have held for the larger move down. I could have executed this trade a little better, but either way was happy with the results.
- Trade 2 was a continuation trade to the downside. We had a strong big move down on the prior 5 minute candle, we had a pull up on low volume and a rejection of the higher price quickly. This was a solid set-up on the 1m chart and got the 50c target easily and held the rest for close to $1.
- NOTES: After becoming unhinged on Monday and breaking every rule I have been very strict on my rules and I was able to go green on the week with a high win percentage. Goes to show that if I stick to my rules and work hard and review we can break through and be profitable. I'm nearing breakeven point on my large cap trading. I do have to consider the fact that I'm more short biased and the market was moving down during this week and not get cocky.
Lesson moving forward: Continue to follow rules.
