Ahh what the fuck was that??? The market retraced about 50% of the massive trending down day from wednesday. I am still in shock that we retraced that much and I was going short all day looking for that next lower high. If this is going to be how the market is gonna react in 2023 then holy hell buckle the fuck up cuz its gonna be a fucked up ride.
1d:2m (Futures) Trend Reversal Short
- Since we are in Macro Bear Micro Bear and Intraday Uptrend, I am looking for the next lower high for continuation to the downside. Since I am using the 30m chart to make the micro thesis I think that having it be a bear thesis makes 100% perfect sense. If I wouldve had these same ideas back in any and all of 2022 then I wouldve CRUSHED this trade back to back to back to back. It worked every single time without fail. Unfortunately, markets change and so do strategies so today I kept shorting into a massive uptrend and lost many times since of course, when I finally figure out how the market works it ends up changing. This was a clear trend reversal setup. Break the trend, get in on trendbreak area, risk the HOD, Target new lower low. Wouldve worked any day in micro bear intraday uptrend in 2022 but nope not in 2023. Lost on this trade about 17$ or 3.5 points.
1d:2m (Futures) Trend Reversal Short
(close up)
-So we made a new high after my last loss so I had to draw a new trendline and wait for us to break it. Once we broke I was looking to get in and risk the previous high which was a very flawed idea. I stopped out and immediately got back in because I we sure that we would break down considering 100/100 times we had this pattern last year it broke down. I got back in on the second trade and actually risked HOD but I placed my stop 1 tick below HOD. My stop was hit to the exact penny and then we flushed lower and I wouldve hit my target on that first big red candle on the right. This is a perfect example of STICK TO THE PLAN. If I wouldve just let me first entry hold for the risk of HOD and I wouldve placed my target at a new lower low then I wouldve made the money but since I stopped out way too early then reentered I lost about $35 instead of MAKING about $40-$50. This wouldve been the difference of a 10$ green day compared to a $50 red day. THAT IS A $60 SWING IN PNL. NOT GOOD. I need to stick to my plan no matter what and let it go. At least I found out how to place brackets in TS so I can kinda take more trades and let them ride longer.
How do I avoid going for trend reversals on days where it may not be worth it to fight the trend?
30d:30m
- See how we have the large trending day on the left? From that move we made consistent Lower highs and Lower Lows. If you look to the bottom right you see two oval areas that are labeled HL and HL. These are both higher lows that came back to back and then they pushed us into a new higher high. Perhaps you couldve noticed this and thought that we would potentially move higher today and Trend continuation long are the only trades that should be taken but that is still very difficult. These higher highs and higher lows seem to be one of the best indicators in the market recently. Knowing and understanding how they work is essential to becoming a profitable trader. 2 back to back higher lows within a backside move are very uncommon unless seen on an intraday basis. On the micro timeframe though its just super uncommon. I need to pay more attention to these moves.
How did I miss another trending day but to the upside?
-Firstly, like I said before. THIS WAS EXTREMELY RARE. If you traded this well by holding from open today you also are probably down multiple hundreds of % last year so holding this from lows to highs is simply a fools game to even conceptualize because it just makes zero sense to know this beforehand based on all the technical and fundamental indicators in the entire market. BUT I couldve noticed it later in the day and taken a long to hold for a push up into the large drop we had on wednesday. Let me explain.
- As I mentioned above you see how we made 2 higher lows back to back then made a new higher high on the intraday (to the left of the white arrow). Once we made that HL then brokeout to a new HH (arrow) then you can look to the left and see that this is where the consolidation breakdown occurred on the large downtrending day on wednesday (oval area Left). We already used that as resistance on the day when we made the first HH on the intraday timeframe. Once we brokeout and made a new HH then continuation should be expected. I couldve entered on the 2m bull flag and held for the breakout right there for a full 10 point move scalp. That is just a pure beautiful momentum trade but again its still super hard to take it although after this review I feel like next time I will be much better at understanding when its appropriate to take a long within a macro+micro backside move.
