10/10/22
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: Friday was a strong sell-off on the SPY/QQQ for approximately 10 points from open. This created a huge topping tail on the weekly chart. The SPY/QQQ were relatively flat afterhours and pre-market and we are opening in the 362-363 zone that had previously been used as a demand zone/support level. I believe we are back stuck in the range between the 362-363 level and 372-373 level. Today will likely be a difficult day to trade because of this. Considers to keep in mind is that CPI numbers come out this week as well. Potential scenarios:
1) I believe the move likely scenario we get is that we bounce between the two zones all day. At open it is likely we get a green move towards the 372-373 level which we opened near on Friday.
2) At the open we continue the sell off to lows and the zone around 355-357. It will require a lot of selling pressure and volume to break down below this level. However with CPI numbers coming in this week, I believe the sell-off will continue, it's just a matter of when.
Trade Analysis:
- Trade 1 was a continuation downside trade. I was lookking for the rejection of VWAP and continuation down. I got in this a little early and was stopped out on a spike. However I respected my R/R pretty well.
- Trade 2 I got in again on my prior trade pretty much at the same level as my prior trade (got slippage trying to get back in). We had a big rejection off the 20 EMA/VWAP and moved down strong. I took my 50c profits on this and then closed my 2nd half on the first green candle to print. This was a pretty good trade.
- Trade 3 was a trend break long. We had broken the 5m trend
- NOTES: Gray Arrow 1 was a continuation downside trade that Iw as considering taking. The market has been moving down on a trend consistently and was consolidating with resistence at 362. I was worried that it was Monday and 10:00 a.m. approaching when we typically have a reversal so I was a little hesitant. This would have worked for 50c at least. Gray Arrow 2 (at around 10:35) was a continuation downtrend after a strong rejection of the trend break on super high volume. This was a clean trade however I hesitated because we recently had the big move green on high volume. This was immediately sold into though, must have been someone covering a short.
Lesson moving forward: Be careful on entering too early, respect R/R.