Today I had the PERFECT entry on the move higher where we had clear confirmation of my thesis. Sadly, I sold from pure panic because the Qs broke down below a prior bar low. Had I added and held this trade for the 9ema retest, I wouldve had a 20 point trade. I have been lacking confidence trading recently and felt like that very last day in the cycle of lacking confidence where I am ready to have it back. I had the perfect read on the market and I knew the big drop early on was sketchy and I had the perfect entry but sold out of panic. That is an easy fix though once I get back in the game.
TA/Fundamentals
- Today there was a key higher low made that helped us push back up close to yearly highs.
- Early on we had a big drop down below premarket low but not below the previous days low. After breaking below that we immediately recovered. I was looking for a reversal pattern all day because I thought the morning drop was a little sketchy.
- Very early on we were downtrending on ES but right at 10:00am the PMI numbers came out and we had already put in a pretty strong move off the low at that point. The VOLD ADD TICK all broke back to the upside around 10:00am as well. This is why the Trend on these indicators is much more important than the value of them.
- Sectors all showing risk on behavior as well. This is at EOD but in the morning they were quite red from the open price. Around the jobs numbers the Risk on nearly all turned green in an instant. The direction was clear. Get long.
Checklist: Y/N
1. Is the price action showing reversal patterns? (Y)
- 30m Higher low and higher high in premarket as well as intraday
- Intraday trend break with strong volume. We pullback to trendbreak retest zone and then once we start to move back up that is when we look for pullback entries.
2. Are the Sectors in the same direction as price action? (Risk on since we are moving up on ES) (Y)
3. Are internals (VOLD ADD TICK) trending with price action? (Y)
We have 3/3 parameters showing that this trade should work very nicely. How did we do trading this pattern?
Trade Review
I took this trade 3 times. (the second entry was in the sim account because I was trying to figure out how to use OCO orders)
Idea: I had the perfect idea to get long. In the morning the PA was all pointing downwards but I just had a feeling that today we would make a higher low on the 30m and start to rip back up. We did have NFP tomorrow so I was a little hesitant for continuation because I though maybe we consolidate in anticipation of that event but I really shouldnt think like that and instead should just look at the price action. Nonetheless, I was ready to get long once the ADD broke its trend,the VOLD was starting to reverse on both NQ and ES, as well as the risk on sectors starting to move higher. At 10:00am we had PMI come out and I got long in that area but chickened out of the trade. I shouldve just held because again I was basing my trade off of the PnL and not the structure. I cant believe the silly mistakes I make this deep into my trading career. I saw a huge drop after we broke the HOD then I told myself "on the way back up i will start to get entries" because these dips can be hard to time on the drops but easy to get in once it starts to go back up. I had the right idea and again my execution was terrible.
Execution: This was arguably the worst execution I have had trading for probably a month or more. Usually I excel in my execution and have struggles with my ideas but today that was flipped. I was spot on with direction and ideas on the market but execution was pretty much as bad as it possibly could be. During PMI I got long and my entry was tested only 1 time for a 1 point loss and instead of just holding it for the structure I panic sold it. In the last trade I saw the Qs break a prior bar low and I panicked again and sold the position when my entry was never tested 1 single time. I cant use other indicators to close out of the trade. When it comes to trend and general direction I use structure, sectors, internals...when it comes to entries and exits I use price action mostly with a small combination of internals. Today I was using execution based off of complete nonsense. If the trade you are in has not broken structure YOU DO NOT EXIT. It is not complicated.
How do I fix this problem?
NEVER exit a trade based on a panic scenario. If you get out because the Qs broke prior bar low, that makes zero sense. You are not trading the Qs you are trading the SPY. If you get out of a trade before it even retests your entry because you are scared to trade and lose more money, then leave the computer immediately because you are not in the right mindset to be trading. If you miss a huge trade keep watching the moves and be ready to attack again on pullbacks for continuation. Just becuase you missed the major move doesnt mean you cant scalp the slow grind back up.
